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| The Tax Publishers2021 TaxPub(DT) 0938 (Mum-Trib) INCOME TAX ACT, 1961
Section 69C
Where there can be no sale without purchases, CIT(A) had rightly concluded that assessee had purchased the material from the parties other than the parties mentioned in its books of account and rightly restricted addition to 12.5%, keeping in view the profit element embedded in the transactions in question, therefore, there was no reason to interfere with the findings of CIT(A).
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Income from undisclosed sources - Addition under section 69C - Estimation of income - Bogus purchases
Assessment was reopened on the basis of information received from the office of DGIT (Inv.) to the effect that during the year relevant to the assessment year, assessee had obtained accommodation bills from four bogus dealers without actually purchasing goods from them. During reassessment proceedings, assessee failed to prove the genuineness of the transaction to the satisfaction of AO. Accordingly, AO made addition of the said amount to the income of the assessee under section 69C. CIT(A) restricted the addition to 12.5% of the total amount of bogus purchases shown by the assessee. Held: AO had not rejected the sales of assessee. Since there can be no sale without purchases, CIT(A) had rightly concluded that the assessee had purchases the material from the parties other than the parties mentioned in its books of account. CIT(A) had rightly restricted addition to 12.5%, keeping in view the profit element embedded in transactions in question. Findings of CIT(A) were well reasoned and based on the law laid down in SIMIT P SHETH [(2013) 356 ITR 451 (Guj) : 2013 TaxPub(DT) 2115 (Guj-HC)]. There was no reason to interfere with the findings of CIT(A).
Followed:CIT v. Simit P. Sheth (2013) 356 ITR 451 (Guj) : 2013 TaxPub(DT) 2115 (Guj-HC) N.K. Proteins Ltd. v. Dy. CIT 769 of 2017 : 2017 TaxPub(DT) 1860 (SC).
REFERRED :
FAVOUR : in assessee's favour
A.Y. : 2009-10
IN THE ITAT, MUMBAI BENCH
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