The Tax Publishers2020 TaxPub(DT) 4729 (Mum-Trib)

INCOME TAX ACT, 1961

Section 69B

Where truly, there could not be any sale without actual purchase of material, therefore, a presumption could be drawn that the material was purchased from the open market while invoices were procured from tainted suppliers. Therefore, estimating the additions @12.5% was quite fair and reasonable against addition of total bogus purchases.

Income from undisclosed sources - Addition under section 69B - Bogus purchases - Corresponding sale not disputed

Revenue filed appeal against the order of CIT(A) restricting certain addition on account of alleged bogus purchases to 12.5% of total bogus purchases. Held: There was no reason found to interfere with the order of CIT(A). Evidently, the assessee was in possession of primary purchase documents and corresponding sales formed part of books of account. At the same time, notices issued under section 133(6) remained unserved and assessee failed to produce even a single party. Truly, there could not be any sale without actual purchase of material and therefore a presumption could be drawn that the material was purchased from the open market while invoices were procured from tainted suppliers. Therefore, estimating the additions @12.5% was quite fair and reasonable.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10



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