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2020 (4) TMI 541 - AT - Income TaxEstimation of income - Bogus purchases - assessee has obtained bogus bills from entities listed in Sales Tax website and declared as hawala dealers by the Sales Tax Department, Mumbai - HELD THAT:- Assessee is importing chemicals as one of the line of business and repacks them according to the requirement of customers. - assessee is regularly purchasing packaging materials for the business which is in and around 4 to 5% of sales. AO has disallowed 4.7 lakhs this year. Assessee has declared considerable profit over the years and there is no need for the assessee to suppress any taxable income. Since the onus of proof lies on the assessee to bring on record the respective suppliers but since the suppliers of packaging material is very small and assessee could not submit any documents in support of purchases made from the suppliers. Since Ld. AR submitted that the packaging materials are delivered at the place of business. We cannot reject the contention of the assessee. Since the assessee could not substantiate the documentation for the purchases, we are inclined to disallow certain percentage of the purchases on the ground that assessee may not have carried on with the operation of repacking the chemicals without packaging material - disallow 10% of the packaging material as reasonable - Grounds raised by the assessee are partly allowed.
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