Addition towards entire bogus purchases not justified only gross profit to be considered

A.M Enterprises Vs ITO (ITAT Bangalore) ITAT Bangalore held that entire bogus purchases cannot be considered for addition, however, only gross profit of such alleged bogus purchases needs to be considered. Accordingly, directed AO to consider gross profit when making any additions towards bogus purchases. Facts- The assessee is a partnership firm and among other parties showed purchases from the parties, namely, M/s Ratan Enterprises and Royal Enterprises, amounting to Rs. 7,59,48,920/- and Rs. 76,78,500/- respectively, aggregating to Rs. 8,36,27,420/- only. AO, based on the information, found...