Bogus Purchases Not Fully Disallowable, Only Profit Taxable: ITAT Ranchi

Indra Trading Corporation Vs DCIT (ITAT Ranchi) Entire Bogus Purchase Can’t Be Disallowed Without Rejecting Books; Only Profit Element Taxable- ITAT Ranchi Facts Assessee filed return declaring income of ₹18.22 lakh. AO reopened assessment u/s 148 alleging escaped income. AO disallowed purchases of ₹16,28,109/- as bogus since purchase bills were not produced. CIT(A)-NFAC sustained the disallowance despite granting partial relief on other additions. Assessee’s Contention Disallowance of entire purchases is bad in law since: Books of accounts were not rejected. Sales were accepted a...