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2018 (2) TMI 1201 - AT - Income TaxBogus purchases - profit estimation - Held that:- The assessee has failed to discharge the primary onus of proving the purchases as it could not produce sufficient evidences to show actual delivery of material and also could not produce confirmatory letters from the alleged bogus suppliers and thus failed to substantiate the purchases. The assessee is a trader and there could be no sales without purchases. Addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize profit earned by assessee against purchase of material in the grey market and undue benefit of VAT against bogus purchases, which Ld. CIT(A) has rightly done. Therefore, addition of 12.5% of bogus purchases to be reasonable one and see no reason to interfere with the conclusion of the Ld. CIT(A). - Decided against revenue
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