Vora Brothers vs. Asst. Commissioner of Income Tax

Parties Involved

Facts Summary

The assessee, Vora Brothers, a partnership firm engaged in the business of trading in diamonds, had shown a purchase of 466.74 carats of diamonds amounting to Rs.66,74,382/- from M/s NazarImpex Pvt. Ltd. The Assessing Officer treated the said purchase as a non-genuine/accommodation-bill purchase and rejected the books of account of the assessee. The Assessing Officer estimated the addition at 12.5% of the disputed purchases, resulting in an addition of Rs.8,34,298/-. The assessee appealed to the Commissioner of Income Tax (Appeals) who enhanced the addition to Rs.66,74,382/-, being 100% of the disputed purchase value. The assessee then appealed to the Tribunal.…

Legal Issues

• 1. Whether the entire purchase value should be brought to tax as unexplained income or restricted to the profit element embedded in the disputed purchases?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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