Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (9) TMI 976 - AT - Income TaxAddition of circular trading purchases - AO disallowed 5% of such purchases - assessee has admitted that it was engaged in circular trading wherein the bills/invoices changed hands without movement of physical goods - CIT(A) in estimating the disallowance @ 0.30% - HELD THAT:- During the course of assessment and appellate proceedings the assessee explained the complete modus operandi of circular trading transaction which was carried out to show better turnover - it is undisputed fact that assessee would make payment to the entity from whom it made purchases, who in turn would make consequent payment and the funds would finally reach back to the assessee. In circular trading the payments were made through cheques and profit on circular trading was disclosed by the assessee in its return of income. In the earlier assessment year, the assessee has gone to Settlement Commission and furnished the circular trading/sample bills and chart which was discussed by the ld. CIT(A) in his findings as supra in this order. CIT(A) has also discussed in his finding that this was not a case of estimation of net profit on circular purchases but this was a case where the assessee had incurred expenses for circular purchases/transaction @ 0.28% and estimated the disallowance @ 0.30% of circular trading purchases - CIT(A) has also explained in his finding regarding analysis of the transaction made by the assessee that these transactions were carried out in order to show better turnover in financial accounts. Revenue could not controvert the facts reported by the ld. CIT(A) with any relevant material. Therefore, no infirmity in the decision of ld. CIT(A) in estimating the disallowance @ 0.30% of circular trading purchases - Appeal of the revenue is dismissed.
|