Addition in case of bogus purchases restricted only to the extent of profit element

DCIT Vs Parth Developers (ITAT Ahmedabad) ITAT Ahmedabad held that addition in case of bogus purchases are restricted only to the extent of profit element involved on such purchases. Accordingly, CIT(A) correctly restricted addition to the extent of 10%. Facts- AO held that the claim of expenditure of Rs.4,17,13,702/- on account of creditors as bogus expenditure and added the same as the assessee’s total income and demanded tax thereon. Aggrieved against the Assessment Order, the assessee filed an appeal before CIT(A). CIT(A) restricted the disallowance by estimating at 10% on account of all...