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2022 (6) TMI 460 - HC - Income TaxEstimation of income - bogus purchases - Addition based on relying on the rate of gross profit earned in the earlier year - disallowance on purchases restricted to the extent of 2.5% of the total turnover by CIT-A - HELD THAT:- Appellant / assessee did not furnish the relevant materials to substantiate their claim before the authorities below and they themselves admitted that they were unable to produce the supporting evidence for purchases, since the relevant records pertaining to the assessment year in question, were washed away in 2015 flood. The appellant / assessee filed the auditor's report, as per which, there was no adverse comment on books of accounts maintained by the appellant / assessee and the purchases debited into P&L account, which fact was not disputed by the assessing officer. In such circumstances, the CIT(A), taking note of the fact that there was a decline in gross profit declared by the assessee for the assessment year in question compared to earlier financial year, directed the assessing officer to restrict the disallowance on purchases to the extent of 2.5% of the total turnover. The said finding of the CIT(A) was also affirmed by the Tribunal, based on the evidence adduced before the same. Such well considered findings of the appellate authorities do not warrant any interference at the hands of this court. See ALPASSO INDUSTRIES PVT. LTD. VERSUS INCOME TAX OFFICER WARD-1 (3) [2018 (8) TMI 761 - DELHI HIGH COURT] - Decided against assessee.
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