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The Tax Publishers2020 TaxPub(DT) 4985 (Kol-Trib) INCOME TAX ACT, 1961
Section 68
Where AO, in assessment order added entire alleged bogus purchase made from S in the hands of the assessee, considering that sales were accepted by AO/Department and without purchases, there cannot be sales and further there was possibility of the assessee purchasing/trading of rice from other sources and procuring bills from the accommodation entry provider could not be ruled out, GP addition of 4% was held to be sufficient to meet the ends of justice.
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Income from undisclosed sources - Validity of action of AO adding entire alleged bogus purchase - Addition only towards gross profit element embedded in alleged bogus purchases -
Assessee was aggrieved by order of AO, wherein entire alleged bogus purchase made from S were added in the hands of the assessee. Held: It was significant to note that sales were accepted by AO/department. Without purchases, there cannot be sales. Possibility of the assessee purchasing/trading of rice from other sources and procuring bills from the accommodation entry provider could not be ruled out. Therefore, entire alleged bogus purchase made from S could not be added in the hands of the assessee. Estimation of profit from the sale of rice could be justified. In the rice trading G.P of 3 to 5 % was there during the assessment year under consideration. Therefore, GP addition of 4% would be sufficient to meet the ends of justice.
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2013-14
IN THE ITAT, KOLKATA BENCH
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