100% addition on bogus purchases cannot be done without doubting sales

CA Prarthana Jalan Honble Mumbai ITAT in the case of Pravin Thanmal Shah Huf Vs. Asst. CIT in I.T.A. No. 4162/Mum/2017  has held that if sales are not doubted than 100% addition on bogus purchases cannot be done. In the case the AO had made  100% addition on account of bogus purchase amounting to Rs.9,61,350/- from two parties i.e Shubhlabh trading Co & Aayushi Enterprises as their names appeared in the list of hawala operators. The Honb’le Mumbai ITAT restricted the addition to 12.5% of the disallowance by observing as under- “5. I have heard both the counsel and perused the...