TaxTMI 
TaxTMI 
Proportionality and Evidence in Tax Assessments: Accommodation entries, Bogus Purchase and Estimation of Gross Profit (Income)
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....om the Bombay High Court as detailed in the document 2019 (7) TMI 838. The case involved two primary issues under the scrutiny of the High Court: 1. Restriction of Addition under Section 68 of the Income Tax Act Issue Overview: The first issue centers around the Income Tax Appellate Tribunal's (ITAT) decision to reduce an addition from ₹23.16 Lakhs to ₹221600 under Section 68 of....
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....hus applied the principle of taxing the profit embedded in such purchases, rather than disallowing the entire expenditure. Legal Insight: This decision underscores the principle of proportionality in tax assessments, particularly when dealing with alleged bogus transactions. The court's reliance on the factual matrix - acceptance of sales arising out of the questioned purchases - is pivotal.....
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.... of incriminating material or evidence of the assessee's transactions outside the books, leading to the deletion of the addition made by the Commissioner (Appeals). The High Court concurred with this view, finding no legal error in the Tribunal's decision and thus no question of law arising from this issue. Legal Insight: This aspect of the judgment highlights the importance of evidence ....