100% of Bogus Purchase cannot be disallowed as Sales are linked with Purchases

ACIT Vs Rashmikant V. Shah (ITAT Mumbai) The issue under consideration is whether the CIT is correct in restricting the disallowance u/s 69C against bogus purchase at rate of 12.5% of the bogus purchases? ITAT states that, in the facts and the circumstances of the case, the total purchases shown to be made from the parties cannot be held to be entirely bogus. It needs to be appreciated that in order to achieve the reported sales/turnover, there must be some corresponding purchases, whether effected from the alleged entry providers or from the grey market without bills. Thus, there ought to be ...