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2020 (12) TMI 610 - AT - Income TaxBogus purchases - CIT-A sustaining addition @ 12.5% disallowance - HELD THAT:- In the present case, the facts of the case indicate that assessee has made purchase from the grey market. Making purchases through the grey market gives the assessee savings on account of non-payment of tax and others at the expense of the exchequer. As regards the quantification of the profit element embedded in making of such bogus/unsubstantiated purchases by the assessee, we find that as held in M Haji Adam & Co We respectfully following the aforesaid judgement of the Hon’ble High Court set aside the matter to the file of the assessing officer with the direction to restrict the addition as regards the bogus purchases by bringing the gross profit rate on such bogus purchases at the same rate as that of the other genuine purchases.
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