Arm twisting stratergy

[Guest]

Dear Sir,

Please guide us what to do regarding issue of IT related to bogus purchase. We are told by IT that we should accept amount and pay as per the 12.5% profit ratio for eg: - if purchase of ₹ 1000000/- is bogus purchase as per them then we have to accept 12.5% profit and on that profit they will charge 30% income tax + interest + Penalty if we accept this way or if we dont then they will charge whole 12.5% (known as 100% addition) and they will issue order. Please guide us what a common person should do about this.

AI Summary

Taxation of bogus purchases: whether to accept a deemed profit concession or face full disallowance and assessment consequences. The taxpayer faces an assessing officer's demand to concede an alleged bogus purchase by accepting a deemed profit (stated as 12.5%) and paying tax, interest and penalty on that profit, or else risk a full disallowance via a 100% addition and assessment of the entire purchase value; the taxpayer requests guidance on whether to accept the deemed-profit adjustment or contest the addition.