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2018 (5) TMI 1319 - AT - Income TaxUnexplained expenditure - GP determination - identity of the suppliers - Held that:- We are not in agreement with the findings of the Ld. CIT(A) on this issue as the AO has made the addition only on the basis of replies received under section 133(6). Even if we consider these purchases as bogus/inflated purchases as has been observed by the authorities below even then the entire disallowance is unwarranted and uncalled for. In our opinion, a reasonable disallowance based upon the GP should be made to bring these purchases to tax. Accordingly, we direct the AO to apply a percentage of GP on the said difference in the purchases. Since the assessee has shown a GP rate of 3.75% during the year, we also direct the AO to apply a GP of 4% on these purchases of ₹ 66,09,022/-.
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