Addition of 12.5% out of bogus purchases meets the end of justice

Meru Imp ex Vs. ACIT (ITAT Mumbai) In this case the sales have not been doubted. It is settled law that when sales are not doubted, 100% dis allowance for bogus purchase cannot be done. The rationale being no sales is possible without actual purchases. This proposition is supported from Hon’ble jurisdictional High Court decision in the case of Nikunj Eximp Enterprises (supra). In this case, the Hon’ble High Court has upheld 100% allowance for the purchases said to be bogus when sales are not doubted. However the facts of the present case indicate that assessee has made purchase from the ...