Only Actual Income Earned from Bogus Sale & Purchase can be Taxed as Income

K.K. Spun India Limited Vs DCIT (ITAT Delhi)

In the case of K.K. Spun India Limited vs. DCIT, the ITAT Delhi addressed the issue of taxing income derived from bogus sales and purchases. The Assessing Officer (AO) initially identified irregularities during search and seizure operations, revealing bogus transactions aimed at inflating the assessee’s books of accounts. Despite these findings, the ITAT emphasized that only the actual income earned from these transactions could be taxed. The tribunal ruled that speculative additions to income, beyond what was genuinely ea

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