← All Phrases

“profit element”

DisallowancesSection 69CSection 69C5,654 judgments

The decision most relied on for profit element is CIT v. President Industries (258 ITR 654), cited in 471 judgments on BharatTax.

Leading authorities on profit element

CIT v. President Industries
258 ITR 654 · 2002 · High Court
471
citing judgments

When books of account are rejected and unaccounted sales or receipts are discovered, the income addition is restricted to the net profit element embedded in these undisclosed transactions, not the entire sale proceeds or receipts, especially if corresponding purchases are not proven to be outside the books.

Sanjay Oilcake Industries v. CIT
316 ITR 274 · 2009 · High Court
460
citing judgments

In cases of alleged bogus or unverifiable purchases, rather than disallowing the entire purchase value, a reasonable profit element or a proportionate percentage of the purchases should be added back to the assessee's income.

CIT v. Siemens Aktiongesellschaft
310 ITR 320 · 2009 · High Court
259
citing judgments

Reimbursements of actual expenses without any profit element are not taxable income. Additionally, mere amendments to the Income-tax Act do not override the provisions of Double Taxation Avoidance Agreements (DTAAs).

CIT v. Vijay M. Mistry Construction Ltd.
355 ITR 498 · 2013 · High Court
252
citing judgments

In cases of alleged bogus or hawala purchases where the existence of transactions is not entirely denied, only the profit element embedded in such purchases, and not the entire purchase price, can be added to the assessee's income. The focus is on determining a reasonable profit percentage for such additions.

CIT v. Balchand Ajit Kumar
263 ITR 610 · 2003 · High Court
212
citing judgments

When making an addition for unaccounted receipts, on-money, or non-genuine purchases/sales, the addition should be restricted to the estimated profit element embedded in such transactions, rather than the entire gross amount, particularly when evidence of corresponding expenditure is incomplete. This estimation often involves applying a net profit rate.

CIT v. Gurubachhan Singh J. Juneja
302 ITR 63 · 2008 · High Court
147
citing judgments

When unaccounted receipts or suppressed sales are detected and books of account are rejected under Section 145(3), additions to income must be restricted to the profit element embedded in such transactions, not the entire transaction value. This profit element is to be estimated by considering the assessee's regular profit ratio as per books of account.

Vijay Trading Co. v. ITO
388 ITR 377 · 2016 · High Court
119
citing judgments

When purchases are found bogus, only the profit element embedded therein, and not the entire purchase value, can be added to the assessee's income.

NK Proteins Ltd. v. DCIT
292 CTR 354 · 2017 · Supreme Court
115
citing judgments

When purchases are unverifiable or alleged to be bogus, only the profit element embedded in such transactions is taxable, not the entire purchase amount; the onus lies on the assessee to prove the genuineness of the transactions.

Judgments citing profit element

Shri Shakti G. Karnawat, Surat vs. The Income Tax Officer, Ward-3(1)(1), Surat

In the result, appeal of the Revenue is dismissed and that of the assessee is allowed

ITA 1381/AHD/2017[2007-08]Status: DisposedITAT Surat07 Dec 2018AY 2007-08

Bench: Shri Rajpal Yadav & Shri Amarjit Singh"नधा"रणवष"/Asstt. Year: 2007-08

For Appellant: Shri Suresh Anchaliya, ARFor Respondent: Smt.Smitha V. Nair, Sr.DR
Section 132Section 148

ld.AO has made addition of Rs.10,15,84,690/- on account of bogus purchase claimed by the assessee. On appeal, the ld.CIT(A) restricted profit element involved in its modus operandi at 12.50% of the alleged bogus purchases. Thus, Revenue is challenging deletion of addition by the ld.CIT(A) over

Maheshraj Chemicals Pvt.Ltd., Ahmedabad vs. The Dy.CIT., Circle-4, Ahmedabad

In the result the appeal of the assessee is partly allowed

ITA 791/AHD/2012[1999-00]Status: DisposedITAT Ahmedabad06 Dec 2018AY 1999-00

Bench: Shri Waseem Ahmed & Madhumita Royआयकर अपील सं./Ita No.791/Ahd/2012 िनधा"रण वष"/Asstt. Year: 1999-2000 Dcit, Mahesraj Chemicals Pvt. Ltd. Circle-4, Vs. 141, Phase Ii, Gidc, Vatva, Ahmedabad Ahmedabad-382330 Pan:Aabcm0424C

For Appellant: Smt Urvashi Shodhan, ARFor Respondent: Shri Vinod Talwani, Sr.DR
Section 234BSection 271Section 28Section 36Section 80H

Court in the case of Avani exports reported in 58 Taxmann.com 100. 12. The learned counsel for the assessee alternatively submitted that only the profit element embedded in the DEPB income should be excluded while working out the deduction under section 80HHC of the Act. Asstt. Year

Sri Murniyappa Narayanappa, Bangalore vs. Assistant Commissioner of Income Tax Circle-6(2)(1), Bangalore

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 1377/BANG/2018[2014-15]Status: DisposedITAT Bangalore05 Dec 2018AY 2014-15

Bench: Shri N.V.Vasudevan & Shri Inturi Rama Raoshri Murniyappa Narayanappa, No.24/1, Srikanthapura, Dasanpura Hobli, Anchepallya, Tumkur Road, Bengaluru-560 079. … Appellant Pan:Aazpn 5651 M Vs. Assistant Commissioner Of Income-Tax, Circle 6(2)(1), Bengaluru. … Respondent Appellant By : Shri C.Ramesh, Ca. Respondent By : Dr. P.V.Pradeep Kumar, Addl.Cit(Dr) Date Of Hearing : 12/11/2018 Date Of Pronouncement : 05/12/2018 O R D E R Per Inturi Rama Rao, Am : This Is An Appeal Filed By The Assessee Directed Against The Order Of The Ld. Commissioner Of Income-Tax(Appeals), Bengaluru-6, Bengaluru, Dated 12/02/2018 For The Assessment Year 2014-15. 2. Briefly, The Facts Of The Case Are As Under: The Appellant Is An Individual & Engaged In The Business Of Trading Of Liquor. The Return Of Income For The Assessment Year 2014-15 Was Filed On 30/09/2014 Declaring Total Income Of Rs.35,43,470/-. Against The Said Return Of Income, The Assessment Was Completed By The Asst. Commissioner Of Income-Tax, Circle-6(2)(1), Bengaluru, [Hereinafter Referred To As ‘The Assessing Officer’], Vide Order Dated 19/12/2016 Passed U/S 143(3) Of The Income-Tax Act, 1961 [Hereinafter Referred To As 'The Act' For Short] At Total Income Of Rs.86,87,419/- While Doing So, The Assessing Officer Made Addition Of Rs.51,43,949/- On Account Of Alleged Difference In The Turnover Shown By The Assessee Page 2 Of 5 & The Purchases As Found In Form No.26 As With Karnataka State

For Appellant: Shri C.Ramesh, CAFor Respondent: Dr. P.V.Pradeep Kumar, Addl.CIT(DR)
Section 143(3)

account of the turnover. Without prejudice, learned AR of the assessee submitted that entire suppressed sales cannot be brought to tax and only profit element embedded in suppressed sales can only be brought to tax in the hands of the assessee. On the other hand, ld.Addl.CIT(DR) submitted that liquor ... wrong. Apparently, AO had not disturbed the sales turnover of Rs.5,11,22,000/- shown by the assessee. Obviously, sales figures are inclusive of profit element. Therefore, right course of action open to AO is to find out the corresponding purchase of this turnover by corresponding with Karnataka State Beverages

A.Mohamed Nazar, Coimbatore vs. ACIT Non Corporate Circle 2, Coimbatore

In the result, the appeal filed by the assessee stands allowed

ITA 2042/CHNY/2018[2008-09]Status: DisposedITAT Chennai03 Dec 2018AY 2008-09

Bench: Shri N.R.S. Ganesan

cannot be treated as income of the assessee during the year under consideration. Moreover, what was to be assessed as income is only the profit element embedded in it and not the entire sale consideration. In these facts and circumstances, assessing the entire amount of Rs.45,00,000/- as income

M/S Sangita Construction Co., Kolkata vs. ITO, WD-26(1), Kolkata

Appeal is allowed in above terms

ITA 354/KOL/2016[2010-2011]Status: DisposedITAT Kolkata30 Nov 2018AY 2010-2011

Bench: Shri S.S.Godara & Dr. A.L. Sainiassessment Year :2010-11 M/S Sangita V/S. Income Tax Officer, Construction Co. Pujali Ward-26(1), Ayakar Budge Budge, Bhawan Dakshin 2, Kolkata-700138 Gariahat Road (South), [Pa No.Aavfs 7245 L] Kolkata-68 .. अपीलाथ" /Appellant ""यथ"/Respondent Shri A.K. Tibrwal, Fca अपीलाथ" क" ओर से/By Appellant Shri Sandeep Lakra, Addl. Cit-Sr-Dr ""यथ" क" ओर से/By Respondent 22-11-2018 सुनवाई क" तार"ख/Date Of Hearing 30-11-2018 घोषणा क" तार"ख/Date Of Pronouncement आदेश /O R D E R Per S.S.Godara:- This Assessee’S Appeal For Assessment Year 2010-11 Challenges Correctness Of Commissioner Of Income Tax (Appeals)-7 Kolkata’S Order Dated 14.12.2015, Passed In Case No.262Cita-7R/Range-26/14-15, In Proceedings U/S. 143(3)/144 Of The Income Tax Act, 1961; In Short ‘The Act’. Heard Both The Parties. Case File Perused. 2. The Assessee’S First Substantive Ground Seeks To Challenge Correctness Of Both The Lower Authorities’ Action Disallowing / Adding Its Transport Charges Of ₹28,12,459/- On Account Of Non-Deduction Of Tds. The Cit(A)’S Appeal Discussion Qua The Instant Issue Reads As Under:- “2.0 Ground No.2 Is Related To The Addition Of Rs.28,12,459/-. During The Course Of Assessment Proceedings The Assessing Officer Found That The Appellant Made Purchases Of Rs.16,60,901/- From Mr. Dinesh Gupta & Rs.11,51,558/- From M/S S. P Enterprise. The Enquiries Conducted By The A.O Revealed That The M/S S.P Enterprise Was Found To Be Non-Existent. Summons

Section 131Section 143(3)Section 40

oral and supportive documentary evidence. The question that arise for our apt adjudication is as to whether the entire expenses on only profit element deserves to be disallowed in these facts and circumstances. Hon'ble jurisdictional high court’s latest decision in (2018) 96 taxmann.com 286 (Cal) PCIT vs. Subarna ... Rice Mill holds that it’s only the profit element which needs to be disallowed / credit in such facts. We therefore direct the Assessing Officer to disallow only the profit percentage of the assessee’s impugned expenditure claim than the gross sum in issue. Necessary computation to follow

Multicon Developers Pvt. Ltd., Pune vs. Assistant Commissioner of Income-Tax

In the result, the appeal is partly allowed

ITA 2154/PUN/2016[2010-11]Status: DisposedITAT Pune29 Nov 2018AY 2010-11

Bench: Shri R.S. Syal & Shri Vikas Awasthy

Section 133A

first ground is against the confirmation of addition to the tune of Rs.79,25,442/- on the basis of 12% profit element in the closing work in progress. 2 Multicon Developers Pvt. Ltd., 3. Briefly stated, the facts of the case, are that the assessee is a Builder, Promoter

Deputy Commissioner of Income Tax (International Taxation) Circle-1(2), Bangalore vs. M/S Ibm India Pvt Ltd, Bangalore

In the result, the appeals by the revenue are dismissed

ITA 1306/BANG/2017[2015-16]Status: DisposedITAT Bangalore16 Nov 2018AY 2015-16

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri P.C. Khincha, CAFor Respondent: Smt. Vandana Sagar, CIT(DR)(ITAT), Bengaluru

salary IT(IT)A Nos.1288, 1291, 1294, 1297, 1300, 1303 & 1306/Bang/2017 Page 11 of 20 payable to expatriate employees and that there is no profit element involved in such payments that accrues to IBM oversees entity was not an essential ingredient of a receipt to be taxable as an income

Deputy Commissioner of Income Tax (International Taxation) Circle-1(2), Bangalore vs. M/S Ibm India Pvt Ltd, Bangalore

In the result, the appeals by the revenue are dismissed

ITA 1303/BANG/2017[2014-15]Status: DisposedITAT Bangalore16 Nov 2018AY 2014-15

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri P.C. Khincha, CAFor Respondent: Smt. Vandana Sagar, CIT(DR)(ITAT), Bengaluru

salary IT(IT)A Nos.1288, 1291, 1294, 1297, 1300, 1303 & 1306/Bang/2017 Page 11 of 20 payable to expatriate employees and that there is no profit element involved in such payments that accrues to IBM oversees entity was not an essential ingredient of a receipt to be taxable as an income

Deputy Commissioner of Income Tax (International Taxation) Circle-1(2), Bangalore vs. M/S Ibm India Pvt Ltd, Bangalore

In the result, the appeals by the revenue are dismissed

ITA 1300/BANG/2017[2013-14]Status: DisposedITAT Bangalore16 Nov 2018AY 2013-14

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri P.C. Khincha, CAFor Respondent: Smt. Vandana Sagar, CIT(DR)(ITAT), Bengaluru

salary IT(IT)A Nos.1288, 1291, 1294, 1297, 1300, 1303 & 1306/Bang/2017 Page 11 of 20 payable to expatriate employees and that there is no profit element involved in such payments that accrues to IBM oversees entity was not an essential ingredient of a receipt to be taxable as an income

Deputy Commissioner of Income Tax International Taxation Circle-1(2), Bangalore vs. M/S Ibm India Private Limited, Bangalore

In the result, the appeals by the revenue are dismissed

ITA 1297/BANG/2017[2012-13]Status: DisposedITAT Bangalore16 Nov 2018AY 2012-13

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri P.C. Khincha, CAFor Respondent: Smt. Vandana Sagar, CIT(DR)(ITAT), Bengaluru

salary IT(IT)A Nos.1288, 1291, 1294, 1297, 1300, 1303 & 1306/Bang/2017 Page 11 of 20 payable to expatriate employees and that there is no profit element involved in such payments that accrues to IBM oversees entity was not an essential ingredient of a receipt to be taxable as an income

Deputy Commissioner of Income Tax (International Taxation) Circle-1(2), Bangalore vs. M/S Ibm India Pvt Ltd, Bangalore

In the result, the appeals by the revenue are dismissed

ITA 1294/BANG/2017[2011-12]Status: DisposedITAT Bangalore16 Nov 2018AY 2011-12

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri P.C. Khincha, CAFor Respondent: Smt. Vandana Sagar, CIT(DR)(ITAT), Bengaluru

salary IT(IT)A Nos.1288, 1291, 1294, 1297, 1300, 1303 & 1306/Bang/2017 Page 11 of 20 payable to expatriate employees and that there is no profit element involved in such payments that accrues to IBM oversees entity was not an essential ingredient of a receipt to be taxable as an income

Deputy Commissioner of Income Tax International Taxation Circle-1(2), Bangalore vs. M/S Ibm India Pvt Ltd, Bangalore

In the result, the appeals by the revenue are dismissed

ITA 1291/BANG/2017[2010-11]Status: DisposedITAT Bangalore16 Nov 2018AY 2010-11

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri P.C. Khincha, CAFor Respondent: Smt. Vandana Sagar, CIT(DR)(ITAT), Bengaluru

salary IT(IT)A Nos.1288, 1291, 1294, 1297, 1300, 1303 & 1306/Bang/2017 Page 11 of 20 payable to expatriate employees and that there is no profit element involved in such payments that accrues to IBM oversees entity was not an essential ingredient of a receipt to be taxable as an income

Deputy Commissioner of Income Tax (International Taxation) Circle-1(1), Bangalore vs. M/S Ibm India Private Limited, Bangalore

In the result, the appeals by the revenue are dismissed

ITA 1288/BANG/2017[2009-10]Status: DisposedITAT Bangalore16 Nov 2018AY 2009-10

Bench: Shri N.V. Vasudevan & Shri Jason P. Boaz

For Appellant: Shri P.C. Khincha, CAFor Respondent: Smt. Vandana Sagar, CIT(DR)(ITAT), Bengaluru

salary IT(IT)A Nos.1288, 1291, 1294, 1297, 1300, 1303 & 1306/Bang/2017 Page 11 of 20 payable to expatriate employees and that there is no profit element involved in such payments that accrues to IBM oversees entity was not an essential ingredient of a receipt to be taxable as an income

V2 Retail Ltd., Kolkata vs. DCIT, Circle - 10(2), Kolkata

In the result, the appeal of the assessee is partly allowed

ITA 612/KOL/2018[2009-10]Status: DisposedITAT Kolkata14 Nov 2018AY 2009-10

Bench: Shri P.M. Jagtap, Vice-(Kz) & Shri S.S. Viswanethra Ravi

Section 143(3)Section 147Section 148

Appeals) held that the entire amount of bogus purchases could not be treated as the income of the assessee and only profit element involved therein as estimated at the rate of 2% could be treated as the income of the assessee. He accordingly sustained the addition made by the Assessing

Tejraj Manroop Chand Tak, Mumbai vs. Income Tax Officer 18(3)(4), Mumbai

In the result, the appeal of assessee is partly allowed

ITA 2113/MUM/2018[2010-11]Status: DisposedITAT Mumbai01 Nov 2018AY 2010-11

Bench: Sri Mahavir Singh

For Appellant: Shri Bharat Kumar, ARFor Respondent: Shri BS Bist, DR
Section 133(6)Section 143(3)Section 147Section 234A

accepted by the AD, the very basis of purchases could not be questioned. Not the entire purchase price could be disallowed but only the profit element embedded in such purchases could he added to the income of the assessee. The estimation varies with the nature of business and no uniform

Ranjan Ramesh Doshi, Mumbai vs. Income Tax Officer Ward-27(3)(1), Mumbai

In the result, the appeal of assessee is partly allowed

ITA 1071/MUM/2018[2009-10]Status: DisposedITAT Mumbai01 Nov 2018AY 2009-10

Bench: Sri Mahavir Singh

For Appellant: Shri KL Vajani, ARFor Respondent: Shri SK Bepari, DR
Section 133(6)Section 143(3)Section 147

circumstances of the case and the judicial pronouncements cited above, what can’t be disallowed or taxed in the instant case, is the excess profit element embedded in such purchases shown to have been made from aforesaid parties. As narrated earlier, the AO in this case has held that ... below: ……………………………………………………… ……………………………………………………… …………… In view of the above discussed factual matric and precedence, I am of the view that the AO is justified in estimating the profit element calculated 12.5% embedded in impugned purchase of ₹ 1,41,04,309 shown from the alleged hawala parties and adding the same to the total

Rajal Enterprises, Mumbai vs. Pr.CIT -29, Mumbai

In the result, assessee’s appeal is allowed

ITA 2273/MUM/2018[2011-12]Status: DisposedITAT Mumbai31 Oct 2018AY 2011-12

Bench: Shri Saktijit Dey, Jm & Shri N.K.Pradhan, Am आमकय अऩीर सं./I.T.A. No.2273/Mum/2018 (नििाारण वषा / Assessment Years: 2011-12) Rajal Enterprises Pr. Commissioner Of Income Tax – 201, Rushabh, B. R. Road, 29 Room No.C–10, 3Rd Floor, Kalp Nagari, Mulund West, बिाम/ Mumbai – 400080 Pratyakshakar Bhavan, Vs. Bandra Kurla Complex, Bandra (East) Mumbai – 400051 स्थामी रेखा सं./जीआइआय सं ./Pan/Gir No. Aajfr5374H (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : अऩीराथी की ओय से / Appellant By : Shri Hitesh Shah प्रत्मथी की ओय से/Respondent By : Shri Manish K. Singh

For Appellant: Shri Hitesh ShahFor Respondent: Shri Manish K. Singh
Section 133(6)Section 143(1)Section 147Section 263

purchases made in the books of account but has also recorded the corresponding sales effected. Thus, he proceeded to make addition of the profit element embedded in the bogus purchases by estimating the same at 10%. Thus, a reading of the assessment order makes it clear, the Assessing Officer ... arrived at is, the assessee might not have purchased goods from the declared source but from some other parties. In that event, only the profit element embedded in the bogus purchases can be considered for addition. Therefore, the decision of the Assessing Officer to restrict the addition

Kamal Prakash Agarwal, Mumbai vs. Income Tax Officer-30(2)(1), Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 4415/MUM/2017[2012-13]Status: DisposedITAT Mumbai31 Oct 2018AY 2012-13

Bench: S/Shri B.R. Baskaran (Am) & Sandeep Gosain (Jm)

Section 133(6)

purchases. 9. Since the assessee has furnished stock register showing receipts and sale of materials, the Ld CIT(A) has rightly observed that the profit element embedded therein alone should have been taxed by the AO. However, the 4 Mr. Kamal Prakash Agarwal profit percentage of 30% adopted

Eagle Construction Co., Ulhasnagar vs. DCIT, CC-1, Thane

In the result, appeal filed by the assessee is partly allowed and the revenue’s appeal is dismissed

ITA 4099/MUM/2017[2011-12]Status: DisposedITAT Mumbai31 Oct 2018AY 2011-12

Bench: Shri Shamim Yahya (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2011-2012 M/S Eagle Construction Co., The Acit, Circle-1, Eagle Nest, Block- 758, 1St Floor, Mohan Plaza, Behind : Chopra Court, Khadakpada, Wayle Nagar, Ulhasnagar - 421003 Vs. Kalyan (W) - 421301 Pan: Aaafe3571A (Appellant) (Respondent) & Assessment Year: 2011-2012 The Acit, Circle-1, M/S Eagle Construction Co., 1St Floor, Mohan Plaza, Eagle Nest, Block- 758, Khadakpada, Wayle Nagar, Behind : Chopra Court, Kalyan (W) - 421301 Vs. Ulhasnagar - 421003 Pan: Aaafe3571A (Appellant) (Respondent) Assessee By : Shri M. Subramanian (Ar) Revenue By : Shri R. Manjunatha Swamy (Dr) Date Of Hearing: 11/10/2018 Date Of Pronouncement: 31/10/2018

For Appellant: Shri M. Subramanian (AR)For Respondent: Shri R. Manjunatha Swamy (DR)
Section 133Section 143

Seth 356 ITR 451(Guj) upheld the decision of the Tribunal and sustained the addition 12.5% of the total bogus purchases holding that only profit element embedded in such purchases can be added to income of the assessee. Hence, in the light of the judgment of the Hon’ble Gujarat ... High Court, only profit element is required to be added. Therefore, addition sustained by the Ld. CIT(A) is, in our opinion not reasonable and hence, the impugned order is not in accordance with the principles of law down by the Hon’ble Gujarat High Court. We accordingly, following

Asst CIT Cir 1, Kalyan vs. Eagle Construction Co, Ulhasnagar

In the result, appeal filed by the assessee is partly allowed and the revenue’s appeal is dismissed

ITA 3937/MUM/2017[2011-12]Status: DisposedITAT Mumbai31 Oct 2018AY 2011-12

Bench: Shri Shamim Yahya (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2011-2012 M/S Eagle Construction Co., The Acit, Circle-1, Eagle Nest, Block- 758, 1St Floor, Mohan Plaza, Behind : Chopra Court, Khadakpada, Wayle Nagar, Ulhasnagar - 421003 Vs. Kalyan (W) - 421301 Pan: Aaafe3571A (Appellant) (Respondent) & Assessment Year: 2011-2012 The Acit, Circle-1, M/S Eagle Construction Co., 1St Floor, Mohan Plaza, Eagle Nest, Block- 758, Khadakpada, Wayle Nagar, Behind : Chopra Court, Kalyan (W) - 421301 Vs. Ulhasnagar - 421003 Pan: Aaafe3571A (Appellant) (Respondent) Assessee By : Shri M. Subramanian (Ar) Revenue By : Shri R. Manjunatha Swamy (Dr) Date Of Hearing: 11/10/2018 Date Of Pronouncement: 31/10/2018

For Appellant: Shri M. Subramanian (AR)For Respondent: Shri R. Manjunatha Swamy (DR)
Section 133Section 143

Seth 356 ITR 451(Guj) upheld the decision of the Tribunal and sustained the addition 12.5% of the total bogus purchases holding that only profit element embedded in such purchases can be added to income of the assessee. Hence, in the light of the judgment of the Hon’ble Gujarat ... High Court, only profit element is required to be added. Therefore, addition sustained by the Ld. CIT(A) is, in our opinion not reasonable and hence, the impugned order is not in accordance with the principles of law down by the Hon’ble Gujarat High Court. We accordingly, following