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| The Tax Publishers2020 TaxPub(DT) 4459 (Ahd-Trib) INCOME TAX ACT, 1961
Section 69C
As there was no dispute as regards corresponding sales, entire purchases as claimed by assessee could not be treated as bogus and as assessee had already offered gross profit at the rate of 8.16% on sales in its books of accounts further addition @ 5% on bogus purchases would meet the ends of justice.
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Income from undisclosed sources - Addition under section 69C - Bogus purchases - No dispute as regards corresponding sales
Assessee engaged in building construction was found to be beneficiary of providers of bogus invoices. Accordingly, AO treated entire purchases as claimed by assessee as bogus and made addition under section 69C, however, without disputing corresponding sales.Held: There could be no sales without purchases. In construction activity, it is prevailing practice that assessee makes purchases of raw materials from grey market and further made bogus purchases to record the same in books of accounts. Accordingly, addition of entire purchases as bogus was not justified. As assessee had already offered gross profit at the rate of 8.16% on sales in its books of accounts further addition @ 5% on bogus purchases would meet the ends of justice.
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2010-11
INCOME TAX ACT, 1961
Section 69C
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