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2024 (3) TMI 1320 - ITAT MUMBAIEstimation of income - bogus purchases - HELD THAT:- As decided in Mohommad Haji Adam and Company [2019 (2) TMI 1632 - BOMBAY HIGH COURT] direction to restrict the addition as regards the bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchases. Following the decision of the Hon’ble Bombay High Court, we find merit in the submissions of the Ld. AR that the addition should be restricted only to the extent of bringing the gross profit rate on such purchases at the same rate as of other genuine purchases. Thus keeping in view the nature of business of the assessee i.e. manufacturing, trading in diamond, the Ld. CIT(A) should have sustained the addition to the extent of difference of gross profit declared in regular trading and non-genuine trading transactions. In this case assessee has declared 7.89% and in non-genuine it was declared at 7.64%. The difference is 0.25%. Accordingly, we direct the Assessing Officer to disallow only 0.25% of the disputed purchases under section 68 of the Act. Appeal filed by the assessee is allowed.
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