Bogus Purchases – Only Profit Element Taxable @12.5% Where Sales Accepted

ACIT Vs Utkarsha Vivek Parkar (ITAT Mumbai) AO treated entire purchases ₹28.28L as bogus u/s 69C based on hawala info & made 100% addition. CIT(A) restricted to 12.5%. ITAT held: Sales not doubted → entire purchases cannot be disallowed: Once sales are accepted, corresponding purchases must exist At best grey market purchases – only profit element taxable 12.5% estimation upheld: Consistent with past years & avoids unrealistic GP/NP HC rulings (Kanak Impex / Drisha Impex) distinguished: Those were cases of complete failure / no evidence Result: Revenue appeal dismissed – ...