Bogus Purchases Not Fully Disallowable, Only Profit Taxable: ITAT Ranchi

Indra Trading Corporation Vs DCIT (ITAT Ranchi)

Entire Bogus Purchase Can’t Be Disallowed Without Rejecting Books; Only Profit Element Taxable- ITAT Ranchi

Facts

• Assessee filed return declaring income of ₹18.22 lakh.
• AO reopened assessment u/s 148 alleging escaped income.
• AO disallowed purchases of ₹16,28,109/- as bogus since purchase bills were not produced.
• CIT(A)-NFAC sustained the disallowance despite granting partial relief on other additions.

Assessee’s Contention

• Disallowance of

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