Circular transaction cannot be treated as bogus purchases u/s. 68: ITAT Rajkot

Kamlesh Deoraj Jain Vs ITO (ITAT Rajkot) ITAT Rajkot held that transactions of sale and purchases cannot be treated as cash credit/bogus under section 68 of the Act, if they are circular in nature. Also held that profit margin of 12.50% can never be possible in case of circular trading activities. Facts- The assessee`s case was reopened under section 148 of the Act, on the issue that assessee could not explain, the purchase of salt of Rs. 43,75,64,479/- from M/s. Ankur Chemfood Ltd.  AO rejected the contention of the assessee and held that assessee is engaged in circular transaction. Accordi...