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2018 (2) TMI 1542 - AT - Income TaxBogus purchases - addition to the extent of 15% of the unverifiable purchases - Held that:- AO has not disputed the sale of the assessee which is corresponding to the purchase the books of accounts were rejected because of the reasons that that assessee has made purchase from these three parties who were indulged for providing bogus bills without any actual delivery of goods. Once the books of accounts are rejected by the AO the income of the assessee is required to be computed on estimated basis and best decision of the AO. AO cannot make an addition to the book result on account of purchase which is part of the trading account and therefore, after rejection of books of accounts only the course of action left with the AO assessee is to estimate the income by applying proper GP or NP rate. We set aside the orders of the authorities below qua this issue and direct the AO to assessee the income of the assessee on the basis of the average gross profit, declared and admitted by the AO or attained finality. The AO to consider the past history of the GP of the assessee for arriving to the average rate of GP. - Decided in favour of assessee for statistical purpose.
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