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2022 (8) TMI 1289 - ITAT SURATBogus purchases of material - HELD THAT:- We are conscious of the fact that the additions made in the assessment of related party (Prajeshsinh I Parmar) are subject matter of appeal before ld CIT(A). Thus, we are restraining ourselves on making any observation on such transaction conducted through the impugned bank accounts. Estimation of income - assessee has shown gross profit @ 27.8% and net profit @ 3.98% on the turnover - We find that the assessing officer neither doubted the sale of the assessee nor rejected the books results. It is settled position under income tax proceedings that when the transaction of sale or purchases, if not fully verifiable or the mode of payment or physical delivery is doubted, only profit element of such transaction may be disallowed to avoid the possibility of revenue leakage of such transaction. As we have already taken a view that transaction through undisclosed bank accounts is the subject matter of appeal which is still to be adjudicated Facts remained the same that the time and manner of certain payment against the purchases of material is not far from doubt. Therefore, we deem it appropriate to disturb the book result of the assessee and to avoid the possibility of revenue leakage the net profit (NP) ratio of assessee is estimated @ 6 % of turnover in place of 3.98% as declared by assessee. In the result, the grounds of appeal raised by the assessee is partly allowed.
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