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2015 (10) TMI 88 - HC - Income TaxBogus purchases - ITAT deleted the addition - Held that:- ITAT has noted that there was one vital fact overlooked by the AO as well as the CIT (A) which was that “the above said entry has really no effect on the profits of the company as the assessee had not made any sales during the year and all the purchases including that of purchase of flat made during the year has been taken into closing stock which is apparent from the paper book page 7 and 43. When there is no effect on the profitability of the assessee, the confirmation of the addition by Ld. CIT(A) is not justified as there is no loss to the revenue as the effect of including the same amount in the purchases as well as in the closing stock nullifies each other's effect." Having heard the submissions of Mr. Sahni, learned Senior Standing counsel appearing for the Revenue, the Court is not satisfied that the ITAT has committed any legal error in coming to the aforementioned conclusion. - Decided against revenue.
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