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2022 (11) TMI 131 - AT - Income TaxEstimation of income - bogus purchases - As per CIT 5% disallowance is quite reasonable keeping in view the profit margin in the diamond industry is very low - HELD THAT:- It is a settled law that in case of disputed purchases shown from such hawala dealer’s only profit element embedded in such transaction is to be disallowed, to avoid the possibility of revenue leakage and not the substantial part of transaction. No doubt, the Assessing Officer identified the purchases shown from hawala dealers, the assessee may have shown other transaction with some other parties. However, the assessee has offered a meagre income for taxation, thus the assessee was shown an extremely low profit. This combination in other similar cases wherein the purchases are shown from Bhanwarlal Jain or Rajendra Jain or Gautam Jain group have restricted or enhanced the addition to the extent of 6% of such amount or disputed purchases. Therefore, taking a consistent view, the disallowance which was restricted to the extent of 5% by ld. CIT(A) are increased to 6% of the impugned purchases - In the result, the grounds of appeal raised by the Revenue is partly allowed resultantly,
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