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| The Tax Publishers2020 TaxPub(DT) 2988 (Mum-Trib) INCOME TAX ACT, 1961
Section 69C
Where AO made addition on account of bogus purchases in case of assessee-company engaged in publication of educational books, considering that AO did not examine contention of assessee that purchases were made in form of diary for distribution to customers, CIT(A) rightly restricted addition to 12.5% of alleged bogus purchases.
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Income from undisclosed sources - Additions on account of bogus purchases - Assessee engaged in publication of educational books - Purchases claimed to be made in form of diary for distribution to customers
Assessee-company was engaged in business of publication of educational books. On basis of information received that assessee was one of beneficiaries of accommodation entry, AO made addition of purchases from parties, whose name was listed as bogus entry provider. Held: Assessee categorically stated that purchases were made in form of diary for distribution to customers. At worst it may be a case of inflating expenses. AO did not verify and examine fact that diaries were distributed on not. CIT(A) after considering contention of assessee restricted addition to extent of 12.5% of alleged bogus purchases. CIT(A) brought element avoidance of VAT and other charges to tax, embedded in such bogus purchases. There was no infirmity in order of CIT(A).
Followed:CIT v. Simit P Sheth (2013) 356 ITR 451 (Guj) : 2013 TaxPub(DT) 2115 (Guj-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, MUMBAI BENCH
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