Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (9) TMI 692 - AT - Income TaxRevision u/s 263 - Estimation of additional profit at the rate of 11.27% towards bogus purchases by AO - HELD THAT:- The view taken by the AO in not taxing 100% but only profit element in such hawala purchases is fortified by the judgment in Pr.CIT Vs. Mohommad Haji Adam & Co.[2019 (2) TMI 1632 - BOMBAY HIGH COURT] wherein it has held that no ad hoc addition for bogus purchases can be made. Rather, the addition should be made to the extent of difference between the gross profit rate on genuine purchases and gross profit rate on hawala purchases. Since the AO in the instant case has made addition for the additional profit at the rate of 11.27% towards bogus purchases, we hold that the impugned order, treating such assessment order as erroneous and prejudicial to the interest of revenue, cannot be validated. The AO has taken a view, which cannot, by any standard, be categorized as a non-plausible view. We, therefore, set-aside the impugned order. - Decided in favour of assessee.
|