Bogus Purchases Can’t Be Added in Full When Sales Are Accepted: ITAT Restricts Addition to 3% GP

D.G. Exports Vs DCIT (ITAT Mumbai) The Mumbai Bench of the ITAT dealt with an appeal arising from a reassessment where the Assessing Officer had treated entire purchases of ₹4.06 crore from entities linked to the Bhanwarlal Jain Group as bogus and added the full amount to income under section 147 read with section 143(3). The CIT(A), NFAC upheld the addition in toto, relying on Investigation Wing inputs that the supplier entities were accommodation entry providers. Before the Tribunal, the assessee demonstrated that the corresponding sales were fully accepted, stock registers were maintained...