Bogus Purchases with Undisputed Sales: Addition Limited to Profit Margin – ITAT Mumbai

Vinesh Arvindkumar Shah Vs ITO (ITAT Mumbai) In a case addressing the treatment of alleged bogus purchases, the Income Tax Appellate Tribunal (ITAT), Mumbai Bench, has partly allowed an appeal filed by assessee Vinesh Arvindkumar Shah. The Tribunal directed the Assessing Officer (AO) to recompute the assessee’s income by adding only the estimated profit embedded in the bogus purchases, rather than the entire value of such purchases. The case pertained to the Assessment Year 2011-12. The assessee, engaged in the ferrous metal business, came under scrutiny based on information received fro...