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TMI Blog2024 (6) TMI 1368X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances, it is settled principle that only profit which is less than the profit shown on untained purchases should be compared and difference is required to be added to the total income of the assessee. Hon'ble Bombay High Court in M/s Mohd. Haji and Company [ 2019 (2) TMI 1632 - BOMBAY HIGH COURT] has also upheld the same principle. In the present case, the assessee has also shown one to one co-relation between the quantity of the alleged bogus purchases and consequent sales accounted there from. We direct the AO to work out the addition only to the extent of the difference in gross profit earned in such tainted purchases with gross profit earned in untainted purchases. The assessee is directed to furnish the requisite informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rocessed under Section 143(1) of the Income-tax Act, 1961 (the Act). 03. On the information received from DGIT (Investigation) on 26th December, 2013, it was communicated that assessee has made purchase of ₹ 42,32,703/- from 8 different parties, who are involved in providing bogus purchase bills. Notice under Section 148 of the Act was issued on 3rd March, 2014 and the reasons were communicated. On 13th March, 2014, the assessee responded that original return filed may be treated as return in response to notice under Section 148 of the Act. Notice under Section 143(2) of the Act was issued on 15th July, 2014. The assessee was asked to prove the genuineness of the purchases and also notices under Section 133(6) of the Act were issued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of PCIT vs. M/s Mohamed Haji and Co. in ITA 194 of 2016, dated 11th February, 2019 may at the most be applied. 06. We have carefully considered the rival contentions and perused the orders of the lower authorities. Undoubtedly, the assessee could not prove the genuineness of the purchases which are found in the information received from the DGIT Investigation. However, the purchase of ₹ 42,32,703, were shown by the assessee by a chart showing that the purchases from these parties have also gone into sales of the equal quantity. The assessee has also got his account tax audited where the quantitative details are available. In such circumstances, it is settled principle that only profit which is less than the profit shown on untain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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