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2021 (9) TMI 629 - AT - Income TaxEstimation of income - bogus purchases - Purchases from grey market - assessee has obtained bogus purchase bills from suspicious dealer identified by the Sales Tax Department, Government of Maharashtra - HELD THAT:- The income declared by the assessee from contract work has not been disputed by the Revenue. The assessee is a work contractor. Without material the assessee could not have completed the contract job. Ostensibly, the assessee has procured the material for performing contract job either from grey market or any other sources. Thereafter, the assessee obtained bogus purchases bills from hawala operator. As in M/S. PARAMSHAKTI DISTRIBUTORS PVT. LTD. [2019 (7) TMI 838 - BOMBAY HIGH COURT] upheld the proposition that it is only the profit element embedded in the bogus purchases that has to be brought to tax. Estimation of disallowance at 30% by the CIT(A) is very much on the higher side. Considering entirety of facts, estimation of GP @12% of bogus purchases would meet the ends of justice - Appeal by assessee is partly allowed.
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