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2018 (2) TMI 1971 - ITAT MUMBAIBogus purchase - assessee as a beneficiary of the hawala transactions - purchases from the open/grey market - CIT-A upheld the disallowance made by the A.O @ 12.5% of the bogus purchases - HELD THAT:- As the profit element accounted for by the assessee in its regular books of accounts pertains to the profit which it would have made from selling the goods under consideration, therefore, the same would have no bearing on the quantification of the monetary benefit involved in making of purchases by the assessee at a lower price from the open/grey market, as in comparison to purchases made from a registered dealer. Addition/disallowance made by the lower authorities @ 12.5% is in respect of the monetary benefit which the assessee would have generated from making of the purchases from the open/grey market. We thus in terms of our aforesaid observations are of the considered view that the addition/disallowance @ 12.5% of the value of the bogus purchases so made by the A.O had rightly been upheld by the CIT(A). We thus in terms of our aforesaid observations uphold the order of the CIT(A). - Decided against assessee.
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