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2017 (1) TMI 1809 - ITAT MUMBAIBogus purchases - HELD THAT:- It is noted in the assessment order that the notices sent to the parties were returned back by the Postal authorities with remark ‘left’ and the Inspector also reported that the parties did not exist at the addresses provided by the assessee. CIT(A) has also found it fit to treat the purchases from the 10 parties as bogus. Though assessee has reiterated the submissions made before the lower authorities, which has been reproduced by the CIT(A) yet we find that the same are merely generalised submissions and do not address the specific verification exercise carried out by the AO. Therefore, insofar as the stand of CIT(A) to treat the purchases from the 10 parties as bogus is concerned, the same is hereby affirmed. Estimation of income - CIT(A) sustaining the addition to the extent of 12.5% - CIT(A) who followed the judgments of Hon'ble Gujarat High Court in the case of Bholanath Poly Fab Pvt. Ltd [2013 (10) TMI 933 - GUJARAT HIGH COURT] and Simit P. Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] to hold that assessee had indeed made purchases though not from the named parties but from other parties in grey market. For this reason, the addition has been partly sustained to the extent of probable profit on the amount of such purchases. The approach adopted by the CIT(A) is expressly supported by the judgments of Hon'ble Gujarat High Court having regard to the factual situation in the instant case. Therefore, we affirm the ultimate decision of CIT(A) to sustain the addition to the extent of 12.5% of the amount of disputed purchases.
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