Bogus Purchase: ITAT Kolkata restricts addition to 5% of Bogus Purchase

Sushama Industries Vs ITO (ITAT Kolkata) Introduction: The Income Tax Appellate Tribunal (ITAT) Kolkata recently addressed the issue of bogus purchases in the case of Sushama Industries vs. ITO for the Assessment Year (AY) 2011-12. The key contention in this case was the addition of Rs. 7,27,536/- by the Assessing Officer (AO) on account of bogus purchases. The ITAT’s decision primarily focuses on whether the entire amount should be added to the income of the assessee or if a more nuanced approach should be adopted. Detailed Analysis: 1. Background and Assessment: Sushama Industries, eng...