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2023 (12) TMI 95 - AT - Income TaxEstimation of income - bogus purchases - assessee has not proved the identity of the seller - AO observed that the seller of goods is not found in the address provided by the assessee, therefore, the identity is not proved - CIT (Appeals) restricted the disallowance by estimating the gross profit at 4.81% - HELD THAT:- In the case on hand before us, we observe that the Assessing Officer did not dispute the sales recorded from out of the purchases made by the assessee. The quantitative details of the stocks are not found to be incorrect. Since the AO has accepted the sales made out of the purchases and there is no discrepancy in stocks found there is no justification in treating the entire purchases as not proved simply because the seller was not produced or not found in the address given. Therefore, following the decisions of Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) the profit element is estimated at 12.5% as against 4.81% estimated by the ld. CIT (Appeals). The decision relied upon by the ld. DR is distinguishable on facts. Thus, we direct the Assessing Officer to restrict the disallowance to 12.5% of the purchases and re-compute the income accordingly.
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