This is premium content. Please become a Premium member. If you are already a member, login here to access the full content.
Bogus Purchases: Only Profit Element Taxable – ITAT Reworks Addition Based on Industry Margins
Case Law Details
- Case Name
- ITO Vs Sahen Enterprises (ITAT Mumbai)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Related Assessment Year
- 2012-2013
- Courts
- All ITAT, ITAT Mumbai
Upgrade to Basic or Premium to download.
Already Upgraded? Log in.
Advertisement
ITO Vs Sahen Enterprises (ITAT Mumbai)
Bogus Purchases: Only Profit Element Taxable – ITAT Reworks Addition Based on Industry Margins
The ITAT Mumbai held that in cases of alleged bogus purchases, entire purchases cannot be added as income when corresponding sales are accepted, and only the profit element embedded in such purchases is taxable.
In this case, the assessee (diamond trader/exporter) was alleged to have made bogus purchases of ₹84.48 lakh from entities linked to the Bhanwarlal Jain group. The AO added 100% of purchases, while CIT(A) restricted it to 6%.
The...
Author Info
