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2022 (2) TMI 43 - AT - Income TaxEstimation of income - bogus purchases - HELD THAT:- The assessee has shown net profit @ 0.0051%, which is extremely on lower side. The submission of Ld. AR of the assessee on the basis of report of task force constituted by Department of Commerce, Ministry of Commerce & Industry, wherein the industries have requested for presume to tax for net profit @ 2% which will encourage traders that BAP introduce by Government would achieve success. We are not convinced the submission of Ld.AR as the dispute before us is about the genuinely of purchases, which has been shown only to inflate the expenses and reduce the profitability. As we have already noted that the assessee had shown extremely low net profit. Therefore, we are of the view that the disallowance restricted by Ld. CIT(A) in on the lower side. Hence, we modify the order of the ld CIT(A) and restrict the addition of the disputed purchases to the extent of 6% and direct the AO to re-compute the disallowances accordingly. In the result, the grounds of appeal raised by the revenue are partly allowed.
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