2021 (7) TMI 1465 - AT - Income Tax

Estimation of income - bogus purchases - CIT(A) confirmed Addition estimating G.P rate at 8% - HELD THAT - Profit margin estimated by the authorities below are on higher side. We deem it appropriate to restore this issue back to the file of AO to decided the same afresh in line with the decision of Mohommad Haji Adam Co. 2019 (2) TMI 1632 - BOMBAY HIGH COURT . Needless to say that the Assessing Officer shall grant reasonable opportunity of hearing to the assessee before re-adjudicating the issue in accordance with law. Appeal by the assessee is partly allowed for statistical purpose.

Summary

The appeal is against the addition of Rs. 1,90,247/- on purchases from M/s. Prime Star at 8% GP rate. The Assessing Officer estimated profit margin on bogus purchases. The CIT(A) upheld the addition. The Tribunal found the profit margin estimate to be high and remanded the issue back to the Assessing Officer for fresh consideration. The appeal by the assessee is partly allowed for statistical purpose.