Bogus Purchases Tax Limit: ITAT Restricts Addition to 3% Profit Element When Sales Are Accepted

DCIT Vs Amar Ghanasingh (ITAT Mumbai)

Entire Purchase Can’t Be Disallowed When Sales Are Accepted—Only 3% Profit Element to Be Taxed on Bogus Purchases—ITAT Mumbai Follows Consistency Rule

The Revenue filed appeal against the order of NFAC (CIT(A)) dated 13.06.2025 for AY 2013-14 where relief had been granted to M/s Amar Ghanasingh, a jewellery manufacturer & trader.

During scrutiny, AO alleged that the Assessee had made purchases of ₹ 9.40 crore from five entities linked with the Bhanwarlal Jain Group—identified as accommodation entry p

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