2023 (3) TMI 670 - AT - Income Tax

Estimation of income - Bogus purchases - HELD THAT:- Admittedly, the Assessing Officer in the instant case has accepted the sales and books of account have not been rejected. Further, the payments for the alleged bogus purchases have been made through proper banking channels and the Revenue is not in appeal against the order of the CIT (A) allowing 75% of such purchases as genuine and only 25% of the bogus purchase has been sustained by the CIT (A). In the case law compilation, the learned Counsel for the assessee has filed certain decisions, wherein in such type of cases, the additions have been sustained ranging from 3% to 5% of such purchases.

Considering the totality of the facts of the case and considering the fact that the profit shown by the assessee is more than the case law cited by the learned Counsel for the assessee, we are of the considered opinion that the disallowance of 15% of such bogus purchases in the instant case will meet the ends of justice. We, therefore, modify the order of the CIT (A) and direct the Assessing Officer to restrict the addition to 15% of such bogus purchase as against 25% restricted by the CIT (A) - Decided partly in favour of assessee.