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2017 (9) TMI 1345 - ITAT MUMBAIBogus purchases - computation of bogus amount - Held that:- Disallowance on account of bogus purchase is on higher side. In view of the fact that the AO has not disputed the sale/consumption of the material nor rejected the books of account. The addition was made on the basis of third party information. In our view, under the Income-tax Act only the real income can be taxed by the Revenue. Even if the transaction is not verifiable, the only taxable is the taxable income component and not the entire transaction. We are of the considered view that in order to fulfill the gap of revenue leakage, the disallowance of reasonable percentage of alleged bogus purchases would meet the end of justice. Considering the facts of the present case, we restrict the addition @ 12.5% of alleged bogus purchases (Rs. 69,60,124/-). The AO is directed accordingly.
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