Entire Bogus Purchase Can’t Be Taxed – ITAT Restricts Addition to 5% Profit

Indian Ion Exchange & Chemicals Limited Vs ITO (ITAT Ahmedabad) Assessee is engaged in trading of water treatment plants. It filed return declaring income of ₹25,93,822. Later, reassessment was initiated u/s 147 based on information that Assessee had obtained accommodation entries of bogus purchases of ₹92,20,100 from M/s Siddh Syndicate, controlled by entry operator Shri Mahendra Shantilal Patel. AO treated the entire purchases as bogus & added ₹92,20,100 to income. CIT(A)/NFAC confirmed the addition. Before Tribunal, Assessee did not press the ground challenging reopening u/s 1...