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Entire Bogus Purchases Can’t Be Added if Sales Are Undisputed: Bombay HC
Case Law Details
- Case Name
- PCIT Vs Mohommad Haji Adam & Co. (Bombay High Court)
- Appeal Number
- Only available for paid members
- Date of Judgement/Order
- Only available for paid members
- Courts
- All High Courts, Bombay High Court
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PCIT Vs Mohommad Haji Adam & Co. (Bombay High Court)
Mumbai: In a significant ruling, the Bombay High Court in the case of PCIT Vs Mohommad Haji Adam & Co. held that where sales are not in dispute, the entire amount of bogus purchases cannot be added back to a trader’s income. The court affirmed that in such cases, the addition should be limited to the estimated profit margin embedded in such transactions.
The case involved a fabric trader whose purchases from three specific entities were identified as bogus by the income tax department following survey operations on the supplier...
