CIT(A) determined profit at 5.47% on total purchases. Assessee ...

Tribunal accepted purchases, GST payments, and expenses. CIT(A) erred in applying profit rate, defying logic. Assessee discharged onus with evidence.

Case Laws     Income Tax

July 24, 2024

CIT(A) determined profit at 5.47% on total purchases. Assessee produced sufficient evidence regarding purchases, movement of goods, GST payment on transportation, expenses accounted for. No evidence of routing back payments. CIT(A) endorsed assessee's contentions but erred in directing gross profit rate application, defying logic. Assessee discharged onus, furnished abundant evidence substantiating purchases' genuineness. CIT(A) erred in sustaining gross profit addition on alleged purchases over declared profit. Gross profit determined by CIT(A) directed to be deleted. Addition u/s 56(2)(x) for difference between purchase price and stamp duty value of property purchased, without referring valuation to DVO, is unsustainable and liable to be deleted. AO bound to refer valuation to DVO when assessee disputes stamp duty value. Addition by AO and confirmation by CIT(A), without DVO reference, unsustainable and deleted in assessee's favor.

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