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2021 (10) TMI 726 - AT - Income TaxEstimation of income of bogus purchases - purchases from grey market - information received by the A.O from the office of the DGIT(Inv.), Mumbai, that the assessee during the year under consideration as a beneficiary had obtained accommodation purchase bills from 15 parties - HELD THAT:- We are of a strong conviction that in case the impugned purchases formed part of the sales and/or closing stock of the assessee for the year under consideration, then, the addition in the hands of the assessee would be liable to be restricted only to the extent of the profit which the assessee would had made by procuring the goods at a discounted value from the open/grey market. Insofar the quantification of the aforesaid profit element is concerned, the same in our considered view in all fairness can safely be taken @ 12.5% of the value of the impugned purchases. Our aforesaid view qua the quantification of the profit element embedded in bogus/unverified purchases made by an assessee at 12.5% of the value of such purchases is fortified by the judgment of Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT]. Accordingly, in all fairness, we herein set-aside the order of the CIT(A) and restore the matter to the file of the A.O. In the course of the set-aside proceedings, if the assessee is able to demonstrate before the A.O that the impugned bogus/unverified purchases in question formed part of its sales and/or closing stock for the year under consideration, then, the A.O shall restrict the addition in the hands of the assessee to the extent of 12.5% of the aggregate value of the impugned purchases - Appeal of the assessee is partly allowed for statistical purposes
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