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2017 (2) TMI 906 - AT - Income TaxBogus purchases - Held that:- CIT(A) was justified in holding that the assessing officer was not justified in disallowing the purchases made from the suspicious dealers treating them as bogus. After having held so, the Ld CIT(A) has proceeded to sustain the addition to the extent of 12.50% of the purchases on the ground that the profit element on the alleged unverifiable purchases should be added. Question of making any profit on purchases would arise only if there is a possibility for the assessee to purchase inferior quality material from the grey market and obtaine accommodation bills from the dealers. The work executed by the assessee has not been rejected by the Government authorities and he continues to get work from them on account of quality of work. We are of the view that there is merit in the contentions of the assessee that the Ld CIT(A) has sustained addition to the extent of 12.5% only on the basis of surmises. The addition of alleged bogus purchases made in all the three years cannot be sustained. Accordingly we direct the AO to delete the additions relating to purchases made in all the three years under consideration. - Decided in favour of assessee
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