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2020 (8) TMI 235 - AT - Income TaxEstimation of income - Bogus purchases - GP rate estimation - addition made by the AO by directing the AO to adopt the GP rate of 25% as against 30% taken by assessee - HELD THAT:- Payments have been made through banking channel and the assessee has substantiated the purchases by providing various documents such as purchase invoice, copy of ledger account, evidence for having made payment through banking channels, VAT return duly reflecting the said purchases, etc. Merely because some of the parties did not respond to the notice issued u/s 133(6) of the IT Act, the same cannot go against the assessee to make such huge addition especially when purchases from those parties were accepted in the preceding year and no reopening of assessment u/s 147 or 263 has taken place. We find, the Jaipur Bench of the Tribunal in the case of Kedia Exports Pvt. Ltd. [2020 (6) TMI 566 - ITAT JAIPUR] has held that once the past year results have attained finality and not in dispute, the same can form the basis for estimating the GP rate for the current year. The rejection of books of account by invoking the provisions of section 145(3) of the Act shall lead to the estimation of income of the assessee based on some reasonable and proper criteria. Adoption of GP rate of 4.5% on the turnover under the facts and circumstances of the case will meet the ends of justice. We hold and direct accordingly. The AO is directed to recomputed the addition accordingly. The grounds raised by the assessee are accordingly partly allowed.
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