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2023 (1) TMI 363 - AT - Income TaxEstimation of income - bogus purchases @12% by CIT-A - HELD THAT:- Addition in the hands of the assessee is liable to be restricted only to the extent of the profit which the assesse would have made by procuring the goods at a discounted value from the open/grey market, as against the inflated value at which the same had been booked on the basis of the bogus bills in its books of account. Quantification of profit which the assessee would have made by procuring the goods in question from the open/grey market, we find that in the case of M/s. Mohhomad Haji Adam & Company 2019 (2) TMI 1632 - BOMBAY HIGH COURT while upholding the order of the Tribunal, had observed, that the addition in the hands of the assessee as regards the bogus/unproved purchases was to be made to the extent of bringing the G.P rate of such purchases at the same rate of other genuine purchases. We are of the considered view that on the same lines the profit made by the assessee in the case before us by procuring the goods at a discounted value from the open/grey market can safely be determined by bringing the G.P rate of such bogus purchases at the same rate as that of the other genuine purchases. We, thus, in terms of our aforesaid observations restore the matter to the file of the A.O, with a direction to restrict the addition in the hands of the assessee qua the impugned bogus/unverified purchased by bringing the GP rate of such bogus purchases at the same rate as that of the other genuine purchases. Accordingly, we set-aside the order of the CIT(Appeals) to the said extent and restore the matter to the file of the A.O to give effect to our aforesaid observations.Appeals of the assessee and revenue are allowed for statistical purposes
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