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2021 (2) TMI 356 - AT - Income TaxEstimation of income - Bogus purchases - AO instead of disallowing the entire purchases has restricted the disallowance to the profit element embedded therein by estimating it @ 12.5% - HELD THAT:- Before us assessee has submitted that the assessee has declared gross profit rate of 6.79% in assessment year 2010-11 and 9.68% in assessment year 2011-12. It is also a fact that as per industry norms the profit rate on the goods traded is normally between 2% to 4%. Considering the fact that the assessee was not able to prove the source of purchase and also keeping in view the gross profit declared by the assessee, disallowance @ 4% of the non-genuine purchases would be fair and reasonable. Accordingly, direct the Assessing Officer to restrict the disallowance to 4% of the non-genuine purchases in both the assessment years under dispute.
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