Case Law Details
Surana Enterprises Vs ITO (ITAT Delhi)
The issue under consideration is whether the addition made by AO u/s 69C by considering the purchases as Bogus Purchase is justified in law?
ITAT states that, in present case, the assessee has shown sales of the goods, or otherwise the goods are lying in the closing stock. If the goods have been sold, the assessee in its trading operation has disclosed the resultant gross profit.Assessee submitted that goods purchased by the assessee has not entered in quantity terms in the books of accounts of the assessee and same has been sold during the year at market rate, thus gross profit on such sales have been embed in the trading account of the assessee. In the SIl Gold ( supra) ITAT have not confirmed the addition on account of investment in the purchase of goods outside it books to match the bogus purchase invoice, but at any time understanding of the situation and consequent results if not visualized properly earlier , can be corrected. In view of this, ITAT direct the assessing officer to confirm the addition to the extent of 2% of the purchase amount involved in the alleged accommodation entry obtained by the assessee and further addition of 5 % to the extent of investment in goods procured by the assessee which has been sold. Accordingly, AO is directed to delete the balance addition. In view of above facts, appeal filed by the assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
1. These are the three appeals involving the similar issue, those are heard together having common arguments from both the parties, and therefore, they are disposed of by this common order.
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