Case Law Details
Diamond Tradex Co. Ltd Vs ACIT (ITAT Delhi)
The ITAT Delhi addressed an appeal filed by Diamond Tradex Co. Ltd. against the order of CIT(A) for the assessment year 2010-11. The case focused on the treatment of alleged bogus purchases and the addition of commission on accommodation entries.
The AO treated the purchases from certain entities as bogus but accepted the corresponding sales. The ITAT referred to previous judgments and held that if purchases are treated as bogus, only the profit element embedded in them should be added to the taxpayer’s income.
The ITAT directed the AO to restrict the addition to 7.50% of the alleged bogus purchases and delete the balance amount. Additionally, the AO was instructed to delete the addition of the alleged commission on accommodation entries. The appeal of Diamond Tradex Co. Ltd. was partly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
Please become a Premium member. If you are already a Premium member, login here to access the full content.
