Case Law Details
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 this, we direct the Ld. Assessing Officer to retain the addition @9.25% of Rs. 2.44 crores of Rs. 22,57,000/- deserve to be retained and the balance addition of Rs. 2,21,43,000/- deserve to be deleted. The reasons being that once the bogus purchases have gone into the profit and loss account, and necessary sales have not been doubted, only option left with the revenue is to make the addition of the gross profit embedded in the bogus purchases. Accordingly, the ground no. 1 of the appeal is partly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the Assessee against the Order of Ld. CIT(A)-24, New Delhi for Assessment Year 2012-13 dated 25.7.2016 wherein, the addition of Rs. 2,44,00,000/- made by the AO with respect to the closing stock was upheld.
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