Bogus sales addition restricted to 4% where settlement order and supporting invoices confirmed trading activity.

Addition under section 68 read with section 115BBE, based on alleged bogus sales receipts from Shri Maa Bhagwati Enterprises, was restricted to 4% because the appellate authority accepted the trading activity in related group cases on the basis of the Interim Board of Settlement order. Supporting sales invoices and banking-channel payments were also relied on, and the Tribunal found no perversity in those factual conclusions. The Revenue's challenge to the 4% restriction therefore failed.

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Issues: Whether the addition made under section 68 read with section 115BBE of the Income-tax Act, 1961 in respect of sales receipts from Shri Maa Bhagwati Enterprises was liable to be restricted to 4% on the basis of the finding recorded by the Interim Board of Settlement.

Analysis: The assessment addition was founded on the allegation that the sales were bogus and represented the assessee's own unaccounted income. The appellate authority, however, relied on the order of the Interim Board of Settlement in the related group cases, which accepted the trading activity of the concern and adopted a net profit rate of 4%. The authority also noted supporting sales invoices and banking-channel payments. The Tribunal found that these factual conclusions, based on the settlement order and the material on record, had not been shown to be perverse or otherwise unsustainable.

Conclusion: The restriction of the addition to 4% was upheld and the Revenue's challenge failed.

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