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| The Tax Publishers2020 TaxPub(DT) 1843 (Mum-Trib) INCOME TAX ACT, 1961
Section 69C
Clearly, AO solely relied upon report of sales-tax department without conducting any independent enquiry. He neither disputed the sales or consumption of assessee nor rejected assessee's books. It is an admitted position under business parlance that no sale is possible in the absence of any purchases. Accordingly, to meet the ends of justice, disallowances was restricted to 12.5% of impugned purchases i.e. profit element embedded therein.
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Income from undisclosed sources - Addition under section 69C - Bogus purchases - No dispute as regards corresponding sales
AO based on information emanated from sales tax department treate entire purchases claimed by assesse as bogus, however, without disputing corresponding sales. Held: Clearly, AO solely relied upon report of sales-tax department without conducting any independent enquiry. He neither disputed the sales or consumption of assessee nor rejected assessee's books. It is an admitted position under business parlance that no sale is possible in the absence of any purchases.Accordingly, to meet the ends of justice, disallowances was restricted to 12.5% of impugned purchases i.e. profit element embedded therein.
Relied: CIT v. Bholanath Poly Fab (P) Ltd. 40 taxmann.com 494 (Guj)
REFERRED :
FAVOUR : in assessee's favour
A.Y. :
IN THE ITAT, MUMBAI BENCH
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