HC restricts addition on Bogus Purchase to G.P. rate on genuine purchases

PCIT Vs Mohommad Haji Adam & Co. (Bombay High Court) Assessee  contended that Even if the purchases are found to be bogus, entire purchase amount cannot be added by way of assessee’s income. In the present case, as noted above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purc...