Bogus purchases: Addition should be limited to difference b/w GP on normal purchase & bogus purchases

Bogus purchases: Addition should be limited to difference b/w GP on normal purchase & bogus purchases

IN THE INCOME TAX APPELLATE TRIBUNAL

The Relevant Text of the Order as follows :

10. In the present case we find that the ratio of the decision of honourable Jurisdictional High Court in the case of M.Haji Adam & Co. (supra) is duly applicable. In the said case honourable jurisdictional High Court had expounded that in case of trading concerns the addition on account of bogus purchases should be limited to the difference between the gross profit that is shown by the assessee on normal purchase as against the gross profit shown on bogus purchases.

11. Accordingly, we remit the issue to the file of the Assessing Officer to make the disallowance in accordance with the ratio of the decision of Hon’ble Bombay High Court in the case of M.Haji Adam & Co. (supra).

Read Order

Tags:  Judgement, Appellant Tribunal, Income Tax

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