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2021 (1) TMI 41 - AT - Income TaxEstimation of income - Bogus purchases - CIT-A restricted addition to 12.5% as against 100% addition made by the Assessing Officer - HELD THAT:- As decided in SIMIT P SHETH [2013 (10) TMI 1028 - GUJARAT HIGH COURT] when the total sale is accepted by the Assessing Officer then entire purchases cannot be added to the income of the assessee. Therefore, only the profit element embedded in such purchases could be added to the income of the assessee. Since, the Ld. CIT (A) has restricted the addition to 12.5% by following the ratio laid down by the Hon’ble Gujarat High Court discussed above, we do not find any reason to interfere with the findings of the Ld. CIT (A). In our considered view, the addition of 12.5% is reasonable to meet the ends of justice. Penalty u/s 271 (1) (c) - HELD THAT:- CIT (A) has correctly deleted the penalty levied u/s 271 (1) (c) of the Act, by following the ratio laid down by the Hon’ble Allahabad High Court in the case of Nareshchand Agarwal [2013 (6) TMI 68 - ALLAHABAD HIGH COURT] wherein the Hon’ble Court has held that where the addition is made on estimate basis, penalty u/s 271 (1) (c) cannot be imposed. - Decided in favour of assessee.
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