Delhi ITAT: Only Profit Element from Bogus Purchases can be Added

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 restr...