2018 (11) TMI 1909

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.... appeal by the assessee wherein the assessee is aggrieved that the Ld. CIT-A has erred in sustaining 12.5% disallowance on account of bogus purchases. 2. The Assessing Officer in this case has made 12.5% addition on account of bogus purchase amounting to Rs.10,85,600/-. Upon assessee appeal Ld. CIT(A) confirmed the same. 3. Against above order assessee is in appeal before the ITAT. I have he....

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....liers. I find that in this case the sales have not been doubted. It is settled law that when sales are not doubted, hundred percent disallowance for bogus purchase cannot be done. The rational being no sales is possible without actual purchases. This proposition is supported from Hon'ble Jurisdictional High Court decision in the case of Nikunj eximp enterprises (in writ petition no. 2860, order dt....

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....profit already shown by the assessee and offered to tax should be reduced from the standard 12.5% being directed to be disallowed on account of bogus purchase. 8. Up on careful consideration, I find considerable cogency in the submission of the Ld. counsel of the assessee. Accordingly, I modify the order of Ld. CIT-A and direct that the disallowance in this case be restricted to 12.5% of the bo....