Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (2) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (2) TMI 864 - AT - Income TaxEstimation of profit on the bogus purchases - CIT(A) restricted the addition to the extent of 25% of purchase - HELD THAT:- We find that neither the Assessing Officer nor the CIT(A) tried to find out the profit element embedded in such transactions. Therefore, in absence of any material the conclusion to arrive that profit margin in the impugned transaction is 25%, the addition of 25% is not justified. The assessee has shown its profit @ 6.67%. It is settled law that even if the transaction of disputed purchases is not fully verified, the revenue authority are not entitled to tax the entire transaction, rather the profit element embedded in such transaction is to be tax. In our view, when the assessee himself has shown profit at 6.67%, the disallowance @ 8% of such disputed purchases would meet the possibility of revenue leakage. Therefore, we direct the Assessing Officer to restrict the purchase @ 8% on both the disallowances - Appeal of the assessee is partly allowed.
|