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2018 (7) TMI 1085 - AT - Income TaxBogus purchases - profit earned by assessee against possible purchase of material in the grey market - Held that:- Addition, which could be made, was to account for profit element embedded in these purchase transactions to factorize for profit earned by assessee against possible purchase of material in the grey market and undue benefit of VAT against such bogus purchases, which Ld. CIT(A) has rightly done. However, keeping in view the factual matrix, conduct of assessee and the products being dealt by the assessee, the rate of 1.77% as estimated by Ld. CIT(A), in our opinion, is quite low. Therefore, we enhance the same to 4% of alleged bogus purchases as well as purchases made by the assessee from Amee Enterprises. Accordingly, we estimate the additions @4% of aggregate purchases of ₹ 3,86,98,368/- made by the assessee from these entities including purchases made from Amee Enterprises. The same comes to ₹ 15,47,935/-. Appeal of revenue stand partly allowed.
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