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2021 (12) TMI 497 - AT - Income TaxEstimation of income - bogus purchases - detailed verification of the parties were considered as bogus based on the statement of Shri Dilip S. Doshi based on the information from Investigation Wing, Mumbai - AO found that four parties who were supplied the material to the assessee are bogus and accordingly he disallowed 100% of the purchases from these parties and assessee has partly claimed the expenditure in the profit and loss account and partly charge to work-in-progress - HELD THAT:- CIT(A) analysed the findings of the Assessing Officer and submissions of the assessee in detail and he came to conclusion that the Assessing Officer has taken note of the transactions as bogus. However, AO failed to acknowledge that the assessee has declared corresponding sales. CIT(A) came to the proper conclusion that only profit element embedded in the purchases alone should be disallowed not the whole purchases, since the assessee has already declared corresponding income in its financial statement - CIT(A) has disallowed the suppressed profit on the purchases claimed by the assessee to the extent of 12.5%. The decision of the Ld. CIT(A) is supported by the decision in the case of CIT Vs. Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] proposed that only profit element embedded in such purchased could be added to the assessee’s income. Therefore, we do not see any reason to interfere with the findings of the Ld. CIT(A). Accordingly, the grounds raised by the Revenue is dismissed.
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