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| The Tax Publishers2020 TaxPub(DT) 5096 (Mum-Trib) INCOME TAX ACT, 1961
Section 69C
Addition of alleged bogus purchased was based on third party information. No yardstick formula could be applied while assessing the amount of revenue leakage. Moreover, revenue had not disputed consumption of steel, whereas assessee had given sufficient evidences to substantiate its purchases. Accordingly, addition of 5% of value of purchases would meet the ends of justice.
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Income from undisclosed source - Addition under section 60C - Bogus purchases -
AO based on information emanated from investigation wing treated purchases as non-genuine holding that assessee had obtained only accommodation entries without there being any transportation of materials and assessee might have made purchases in the gray market. Accordingly, AO made addition under section 69C of 12.5% of the alleged bogus purchases. Held: Addition of alleged bogus purchased was based on third party information. No yardstick formula could be applied while assessing the amount of revenue leakage. Moreover, revenue had not disputed consumption of steel, whereas assessee had given sufficient evidences to substantiate its purchases. Accordingly, addition of 5% of value of purchases would meet the ends of justice.
Followed:Modern Road Makers (P) Ltd. v. Asstt. CIT ITA No. 4734/Mum/2016 vide Order, dated 24-10-2014.
REFERRED :
FAVOUR : Partly in assesse's favour.
A.Y. :
IN THE ITAT, MUMBAI BENCH
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