Only Profit Element in Bogus Purchases can be Added to Income: Bombay HC

CIT Vs Simit P Sheth (Gujarat High Court) The case of CIT Vs Simit P Sheth revolves around the estimation of profit in a steel trading business. The Gujarat High Court validates the ITAT’s order, emphasizing the inclusion of only the profit element in specific purchases. The dispute arises from certain purchases made by the assessee for which TDS was deducted by the payer departments. The Assessing Officer treated these purchases as bogus and added the entire amount to the gross profit. The Commissioner (Appeals) retained 30% of the purchase cost as probable profit. The ITAT scaled it do...