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2023 (5) TMI 779 - AT - Income TaxEstimation of profit - Bogus purchases - HELD THAT:- We agree with the view of the lower authorities that there should be an estimation of profit element from these purchases and should be estimated reasonably as the assessee could not conclusively prove that the purchases made are from the parties as claimed, especially in the absence of any confirmations from them. Keeping in view the nature of business of the assessee i.e. trader in Iron and Steel Metals, it would be justified if the profit element embedded in those purchases are estimated at 5%. We direct the Assessing Officer to estimate the profit element from the non-genuine purchases at 5% for both the Assessment Years i.e., A.Y. 2009-10 and A.Y. 2011-12 and restrict the disallowance of purchases to 5% and compute the income accordingly. Appeals filed by the assessee are partly allowed.
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