If the gross profit already shown is more than 12.5%, no disallowance is required on account of Bogus purchases

Last updated: 22 January 2021
Quick Summary
This Income Tax Appellate Tribunal ruling states that if a company's gross profit already exceeds 12.5%, no disallowance for bogus purchases is necessary. The case involved an assessee who was accused of making bogus purchases, leading to an addition by the Assessing Officer and confirmation by the CIT(A). However, the tribunal's decision hinges on the profit margin.

Court :
ITAT Mumbai

Brief :
This appeal by the assessee wherein the assessee is aggrieved that the learned Commissioner of Income Tax (Appeals)-3, Mumbai (‘ld.CIT(A) for short) dated01.11.2018 has erred in sustaining 25% disallowance on account of bogus purchase for the assessment year (A.Y.) 2010-11.

Citation :
ITA No. 736/Mum/2019

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