2019 (10) TMI 210

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..... n respect of bogus purchases should be restricted to difference between the gross profit shown by the assessee in respect of bogus purchases vis a vis normal purchases. Meaning thereby the addition should be confined to gross profit shown on the bogus purchases which is found to be lower than the gross profit on normal purchases We direct the A.O. to recompute the addition in respect of bogus p .....

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..... y the CIT(A) is less than ₹ 50,00,000/-, however, the case comes under an exception, in so far as assessment was reopened on the basis of information from Sales Tax Department which is an outside authority. 3. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that the addition was made by the A.O. on ac .....

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..... gross profit shown on the bogus purchases which is found to be lower than the gross profit on normal purchases. The precise observation of the Hon ble Bombay High Court was as under: 8 In the present case, as noted above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee .....

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..... nt of bringing the G.P. rate on purchases at the same rate of other genuine purchases. The decision of the Gujarat High Court in the case of N.K. Industries Ltd. (supra) cannot be applied without reference to the facts. In fact in paragraph 8 of the same Judgment the Court held and observed as under- So far as the question regarding addition of ₹ 3,70,78,125/- as gross profit on .....

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..... d partially in favour of the assessee and partially in favour of the revenue. 9 In these circumstances, no question of law, therefore, arises. All Income Tax Appeals are dismissed, accordingly. No order as to costs. 5. In view of the above facts and circumstances, we direct the A.O. to recompute the addition in respect of bogus purchases in terms of the proposition laid down .....

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