Case Law Details
Capacite Infra Projects Ltd Vs DCIT (ITAT Mumbai)
Introduction: The recent ruling by the Mumbai Income Tax Appellate Tribunal (ITAT) in the case of Capacite Infra Projects Ltd Vs DCIT has significant implications for tax assessments concerning non-genuine/Bogus purchases. Let’s delve into the details of the case and its outcome.
Detailed Analysis:
1. Disallowed Purchases: The Assessing Officer disallowed purchases worth Rs. 30,92,800/- by Capacite Infra Projects Ltd under section 37(1) of the Income Tax Act, 1961, citing them as unverified. The company contested this disallowance, arguing that the purchases were genuine and backed by documentation.
2. Anti-Evasion Wing Findings: The basis for the disallowance stemmed from findings by the anti-evasion wing of CGST Commissionerate, Kutch, alleging involvement of certain entities in issuing invoices without actual supply of goods or services. However, Capacite Infra Projects Ltd maintained that the transactions were legitimate, supported by banking records and GST filings of the vendor.
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Author Bio
with due respect ITAT Bombay Order is somewhat different. when it is found that Purchase of X rupees
is totally bogus then entire such amount of such bogus purchase should have been disallowed as
it is not a real expense at all so the question of application of Net Profit ratio does not arise.