| The Tax Publishers2021 TaxPub(DT) 5574 (Mum-Trib) INCOME TAX ACT, 1961
Section 69C
Although, assessee had failed to substantiate authenticity of impugned purchases to the satisfaction of AO, however, the fact that impugned purchases formed part of the sales/contract receipts of assessee was not dislodged by AO. Therefore, it could safely be gathered that assessee had procured impugned material from the open/grey market. Accordingly, entire purchases could not be held as bogus and addition was, therefore, restricted to 15% profit element embedded in the impugned bogus purchases.
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Income from undisclosed sources - Addition under section 69C - Bogus purchases - No dispute as regards corresponding sales
Assessee engaged in the business of trading of Air handling units, dust collectors and other ancillary labour jobs was found to be provider of bogus purchase bills. Accordingly, AO invoked section 69C and made addition treating entire purchases as claimed by the assessee as bogus, however, without disputing corresponding sales. Held: Although, assessee had failed to substantiate authenticity of impugned purchases to the satisfaction of AO, however, the fact that impugned purchases formed part of the sales/contract receipts of assessee was not dislodged by AO. Therefore, it could safely be gathered that assessee had procured impugned material from the open/grey market. Accordingly, entire purchases could not be held as bogus and addition was, therefore, restricted to 15% profit element embedded in the impugned bogus purchases.
Relied:Pr. CIT v. Mohommad Haji Adam & Co. ITA No. 1004 of 2016 vide its order dt. 11-2-2019 and CIT v. Simit P. Sheth (2013) 356 ITR 451 (Guj) : 2013 TaxPub(DT) 2115 (Guj-HC).
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2010-11
IN THE ITAT, MUMBAI BENCH
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