Bogus purchases- ITAT allows addition only for gross profit not for full Purchase

Becon Constructions Pvt. Ltd. Vs ACIT (ITAT Delhi) In the case of bogus purchases, if they are not written off or reduced from the closing stock then, necessarily in the sale price the same is included and therefore, only gross profit on the same can be added. We find that the above arguments also supported by relying on 356 ITR 451 in the case of CIT vs. Simit P. Sheth of the Hon’ble Gujarat High Court as well as the several judicial precedents of the Coordinate Benches. The assessee has shown that in the year ending March, 2012, the gross profit ratio of the assessee is 9.25%. In view of t...