https://www.taxtmi.com/caselaws?id=449739 Where sales were accepted but purchases were held to be bogus, the HC held that the assessee could not be taxed on the entire sales value because corresponding cost must be deducted; only the embedded profit element could be brought to tax. Applying a gross profit approach, the Court computed the effective profit at 5.66% on the relevant turnover and directed addition only of that amount as gross profit, with consequential deductions. The Court declined to undertake further fact-finding on product and profit margin in appellate jurisdiction and did not disturb the factual assessment of the lower authorities fixing a reasonable margin, holding that precedent relied upon by the revenue was inapplicable. The appeal was partly allowed. en-us Wed, 07 Feb 2024 00:00:00 +0530 Wed, 07 Jan 2026 18:18:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=449739 Where sales were accepted but purchases were held to be bogus, the HC held that the assessee could not be taxed on the entire sales value because corresponding cost must be deducted; only the embedded profit element could be brought to tax. Applying a gross profit approach, the Court computed the effective profit at 5.66% on the relevant turnover and directed addition only of that amount as gross profit, with consequential deductions. The Court declined to undertake further fact-finding on product and profit margin in appellate jurisdiction and did not disturb the factual assessment of the lower authorities fixing a reasonable margin, holding that precedent relied upon by the revenue was inapplicable. The appeal was partly allowed. Case-Laws Income Tax Wed, 07 Feb 2024 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=449739