Case Law Details
AO has made addition in respect of purchases found to be bogus as per the information from sales tax department. In the appellate proceedings, the CIT(A) recorded a finding to the fact that AO has not disputed the quantitative details and also day to day stock register maintained by the assessee. Assessee company being a trader of goods, AO not having doubted the genuineness of sales, could not have gone ahead and made addition in respect of peak balance on such purchases. Accordingly, CIT(A) concluded that issue boil down to find out the element of profit embedded in bogus purchases which the assessee would have made. When the corresponding sales have not been doubted and the quantitative details of purchases and sales vis-a-vis stock was available, we deem it appropriate considering the entirety of facts and circumstances of the case to restrict the addition to the extent of 2% of such bogus purchase. Accordingly, the order of both the lower authorities are modified and AO is directed to restrict the addition to the extent of 2% on such purchases.
Full Text of the ITAT Order is as follows:-
These are the appeals filed by the revenue and assessee against the order of CIT(A)-30, Mumbai 04/12/2015 for the A.Y.2009-10, 2010-11 and 2011-12 in the matter of order passed u/s. 143(3) of the IT Act.
2. The following grounds have been taken by the assessee:-
For A.Y. 2009-10 & 2011-12
Please become a Premium member. If you are already a Premium member, login here to access the full content.
