Entire Bogus Purchases Not Taxable If Sales Accepted; Only Profit Taxable: ITAT Bangalore

Krishnasamy Sendilkumar Vs ITO (ITAT Bangalore) Bangalore ITAT: Entire Bogus Purchases Cannot Be Added When Sales Are Accepted; Only Profit Element Taxable The Bangalore ITAT held that the entire value of alleged bogus purchases cannot be treated as income where the corresponding sales have been accepted, and only the embedded profit element can be brought to tax. The assessee, engaged in the wholesale trading of scrap batteries, was subjected to an addition after the Verification Unit found that three alleged suppliers had denied the transactions and were either not carrying on business or we...