ITAT limits Bogus Purchase Addition to 5%; No Section 271(1)(c) Penalty on Estimated Additions

Advertisement ITO Vs Borda Brothers (ITAT Surat) Conclusion: Since the business sales were accepted as genuine and only the purchases were routed through accommodation entries, only a part of the purchases needed adjustment to reflect possible inflation of expenses confirming the restriction of bogus purchase addition to 5% and when additions were made on an estimated basis, penalty for concealment under Section 271(1)(c) could not be imposed. Held: Assessee-Borda Brothers, a firm engaged in the diamond trade, had filed its return of income for Assessment Year 2007-08 declaring total income...