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2023 (6) TMI 1272 - ITAT DELHIEstimation of income - Bogus purchases - commission expenditure u/s 69C of the Act @ 3% - HELD THAT:- As it is not in dispute that the assessee had made bogus purchases from Giriraj Global Limited and bogus sales to Barsana Fabtex Pvt. Ltd. Hence, to that extent two accommodation entries had indeed been obtained by the assessee, i.e., one for purchase and one for sales. It is not in dispute before us that the average rate of commission for obtaining accommodation entry is 1.5% per transaction. Hence, we hold that the ld.CIT(A) was justified in upholding the addition made on account of commission expenditure u/s 69C of the Act @ 3% - We do not deem it fit to interfere in the said order of the ld.CIT(A) in this regard. We are in agreement with the observation of the ld.CIT(A) that out of bogus purchase made from Giriraj Global Limited, the assessee had made bogus sales to Barsana Fabtex Pvt. Ltd., i.e., bogus sales has been made out of bogus purchases. When both the transactions are bogus, only the profit element embedded thereon could be brought to tax. This has been rightly done by the ld.CIT(A). Determination of gross profit @ 11.69% on the corresponding purchases of Rs. 27,22,028/- attributable to genuine sales made to Anirudh & Raj Builders Pvt. Ltd. - We find that though the purchases made from Giriraj Global Limited is bogus, the sale made to Anirudh & Raj Builders Pvt. Ltd. is genuine and this fact is not doubted by the Revenue. Hence, it would be just and fair to bring to tax only the profit embedded in the value of such disputed purchases. This profit has been consistently estimated by this Tribunal @ 12.5% on the value of disputed purchases which has been approved by the Hon’ble Bombay High Court and the Hon’ble Gujarat High Court. Hence, we deem it fit and appropriate, in the facts and circumstances of the instant case, to estimate the profit element embedded in the value of disputed purchases at 12.5% instead of 11.69% made by the ld.CIT(A). Accordingly, the grounds raised by the assessee as well as the Revenue on merits are disposed of in the aforesaid manner.
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