Your Guideposts in the Murky Waters of Bogus Purchases: 15 ITAT and High Court Tax Verdicts You Need to Know

The ITAT dismissed the revenue's appeal and upheld the CIT(A)'s order deleting the addition made by the AO, as the AO violated the principles of natural justice by relying on statements without giving the assessee an opportunity to cross-examine those parties. (Please right click me to read more on it)

The ITAT upheld the CIT(A)'s findings, confirming the deletion of additions on account of bogus purchases, as the purchases were supported by documentary evidence, and the assessee's explanation was not rebutted by the Revenue Department. (Please right click me to read more on it)

The Tribunal found no incriminating material during the search for the impugned assessment year and deleted the addition made by the AO on account of alleged bogus purchases from a party, based on a statement. (Please right click me to read more on it)

The ITAT set aside the CIT(A)'s order and directed the AO to restrict additions to the extent of bringing the GP rate on disputed purchases at the same rate as other genuine purchases, following the Bombay High Court's decision. (Please right click me to read more on it)

The court relied heavily on the statements of the alleged suppliers, who admitted to issuing bills without supplying any goods, to establish that the assessee had indulged in obtaining accommodation entries of bogus purchase bills. (Please right click me to read more on it)

The Revenue's appeal was dismissed, as the Tribunal had directed the AO to make a further addition of 3% profit on the bogus purchases, and the High Court found no error in the Tribunal's view. (Please right click me to read more on it)

The CIT(A) deleted the additions made by the AO, stating that no corroborative material was found to substantiate the surrender made by the assessee during the survey proceedings, which was later retracted.(Please right click me to read more on it)

An admission is not conclusive and can be rebutted by the assessee. (Please right click me to read more on it)

The ITAT held that since the sales were accepted, books were not rejected, and payments were made to creditors in subsequent years, the addition of the entire outstanding amount was unjustified and estimated a reasonable profit rate on such purchases. (Please right click me to read more on it)

The Tribunal partly allowed the assessee's appeal and estimated the additions at 5% of the purchase value, considering the profit element embedded in such purchases from the grey/unorganized market. (Please right click me to read more on it)

The central legal issue was whether the penalty imposed under Section 271(1)(c) for concealment of income was justified, and the High Court remitted the proceedings to the AO to pass fresh orders, considering the order under the KVAT Act. (Please right click me to read more on it)

Whether a statement made on oath by an assessee (taxpayer) to the income tax authority during survey proceedings under Section 133A of the Income Tax Act, 1961 has any evidentiary value and can be used as the sole basis for making an assessment of tax.(Please right click me to read more on it)

The ITAT held that the AO cannot make additions solely based on a retracted statement recorded during a survey, without corroborative evidence or rejecting the books of accounts, allowing the assessee's appeals against additions towards bogus purchases. (Please right click me to read more on it)

The Tribunal found that the respondent had provided relevant documents to prove the genuineness of the transactions, and the statement recorded under Section 133A was not given any evidentiary value for making additions. (Please right click me to read more on it)

Tax Authorities should Limit Additions to Gross Profit Rate in Bogus Purchase Cases, Aligning with Rates on Genuine Purchases(Please right click me to read more on it)