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2020 (7) TMI 492 - AT - Income TaxBogus purchases - Addition @3% - estimation of profit from alleged bogus purchases - HELD THAT:- As in the case of CIT vs Simith P.Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] had considered a similar issue and held that at the time of estimation of profit from alleged bogus purchases no uniform yardsticks could be adopted, but it depends upon facts of each case. The ITAT, Mumbai, in number of cases had considered an identical issue and depending upon facts of each case, directed the Ld.AO to estimate gross profit of 10% to 15% on total alleged bogus purchases. In this case, considering the nature of business of the assessee the Ld. AO has made 100% additions, whereas the Ld.CIT(A) has scaled down addition to 3% gross profit on total alleged bogus purchase. Although, both authorities have taken different rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. CIT(A) has taken a fair view and estimated 3% gross profit on alleged bogus purchases to settle dispute between the parties in respect of purchases from all parties.
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