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2023 (7) TMI 515 - HC - Income TaxEstimation of income on Bogus purchases - scam was unearthed by the Sales Tax Department in respect of bogus parties who provided accommodation entries - ITAT confirmed the order of CIT(A) restricting the addition to 12.5% of the purchases - HELD THAT:- CIT(A) and the ITAT were correct in coming to the conclusion that the purchase cannot be rejected and the additions could be restricted to the extent of profit element, which they determined could be 12.5%. This is because when material has been actually purchased and consumed in executing the contract, the cost price is required to be deducted and taxes cannot be levied on the same. There is nothing to indicate whether the profit element should be more than 12.5%. No substantial question of law arises.
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