Shri Tribhuvan Prasad Chaudhary vs. CIT(A), Income Tax Department

Parties Involved

Facts Summary

The assessee, Shri Tribhuvan Prasad Chaudhary, alleged to have taken bogus purchase bills from three parties amounting to Rs.2,10,94,976/- during the assessment years 2010-11 and 2011-12. The Maharashtra State Sales Tax Authorities informed that the companies from whom the assessee transacted had only given bills but no actual transactions took place. Consequently, the case was reopened, and the Assessing Officer disallowed the expenditure and added it to the assessee's income. The assessee challenged this addition before the Commissioner of Income Tax (Appeals), who affirmed the addition to the extent of 12.5% of the alleged bogus purchases. The assessee further challenged this decision before the Income Tax Appellate Tribunal (ITAT), Mumbai.…

Legal Issues

• 1. Computation of gross profit rate on alleged bogus purchases.
• 2. Whether the addition should be restricted to 12.5% or 5% of the alleged bogus purchases.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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