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2018 (8) TMI 1626 - AT - Income TaxEstimation of gross profit on alleged bogus purchases - CIT-A estimated profit at 12.50% relying on the decision of Simit P Seth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] - Held that:- Facts in the case of Simit P Seth were entirely different, therefore, reliance placed by CIT(A) on the decision of Simit P Seth for making addition by computing profit at 12.5% is not justified. As genuine purchases are concerned, there is no justification at all for making any addition by estimating extra profit there on to the extent of purchase of ₹ 48.39 Crores. As per the record, the assessee has made purchase of ₹ 48.39 Crores from other than hawala dealers, no further addition is warranted on such purchases. However, purchases to the extent of ₹ 55.09 Crores were made from suppliers who did not pay sales tax. Even though the profit declared by the assessee on such purchases was much more than the profit shown on the genuine purchases, but keeping in view the totality of facts and circumstances of the case and the fact that quantitative statement of purchases and sales so filed by the assessee was not disputed by any of the lower authorities, we deem it fit to restrict the addition to the extent of 2% of alleged bogus purchases amounting to ₹ 55.09 Crores. Thus, we restrict the addition to the extent of ₹ 11.01 lakhs. - Decided partly in favour of assessee.
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