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The Tax Publishers2021 TaxPub(DT) 1008 (Mum-Trib) INCOME TAX ACT, 1961
Section 69C
AO had accepted sales/works made by assessee and since there could not be sales without corresponding purchases, so entire purchases could not be rejected and considering nature of business and gross profit shown by CIT(A) assessee restricted the addition to 13.71% of alleged bogus purchases.
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Income from undisclosed sources - Addition under section 69C - Bogus purchases -
AO received information from DGIT (Inv.) that assessee availed of accommodation entries from various dealers alleged to be providing accommodation entries without there being transportation of any goods. Accordingly, AO treated entire purchases claimed by assessee as bogus and made addition under section 69C. CIT(A) restricted addition to 13.7% of the alleged bogus purchases. Revenue challenged this. Held: AO had accepted sales/works made by assessee and since there could not be sales without corresponding purchases, so entire purchases could not be rejected and considering nature of business and gross profit shown by CIT(A) assessee restricted the addition to 13.71% of alleged bogus purchases. Therefore, order passed by CIT(A) was reasonable.
Followed:CIT v. Simit P. Seth (2013) 38 Taxman.com 385 (Guj) : 2013 TaxPub(DT) 2115 (Guj-HC)
REFERRED :
FAVOUR : Partly in assessee's favour.
A.Y. : 2009-10
IN THE ITAT, MUMBAI BENCH
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