2013 (10) TMI 933 - HC - Income Tax

Bogus purchases - whether the parties from whom such purchases were allegedly made were bogus – Held that:- Whether the purchases themselves were bogus or whether the parties from whom such purchases were allegedly made were bogus is essentially a question of fact. The Tribunal having examined the evidence on record came to the conclusion that the assessee did purchase the cloth and sell the finished goods. In that view of the matter, as natural corollary, not the entire amount covered under such purchase, but the profit element embedded therein would be subject to tax. This was the view of this court in the case of Sanjay Oilcake Industries v. CIT [2008 (3) TMI 323 - GUJARAT HIGH COURT] – Decided against the Revenue.