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| The Tax Publishers2020 TaxPub(DT) 2885 (Mum-Trib) INCOME TAX ACT, 1961
Section 69C
Since AO had not disputed corresponding sales, it could be said that assessee might have made impugned purchases from grey market so as to evade duty taxes, etc., and, therefore, entire purchase could not be held as bogus. Considering the line of assessee's business, i.e. import and export of diamonds, addition was scaled down to 3% gross profit on total alleged bogus purchase.
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Income from undisclosed sources - Addition under section 69C - Bogus purchases - No dispute as regards corresponding sales
Assessee engaged in import and export of diamonds was found to be beneficiary of accommodation entries of bogus purchase bills issued by Hawala dealers. Accordingly, AO treated entire purchases claimed by assessee as bogus and made addition, however, without disputing corresponding sales. Held: As AO had not disputed corresponding sales, it could be said that assessee might have made purchases from grey market so as to evade duty taxes, etc., and, therefore, entire purchase could not be held as bogus. Considering the line of assessee's business, addition was scaled down to 3% gross profit on total alleged bogus purchase.
Supported by:Pr.CIT v. Simith (P Sheth (2013) 356 ITR 451 (Guj) : 2013 TaxPub(DT) 2115 (Guj-HC)
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2010-11
IN THE ITAT, MUMBAI BENCH
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