The AO made addition for bogus purchases u/s. 68 of the Act for A.Y. 2011-12. The CIT(A) restricted the addition to 25%. Hence, both Revenue and the assessee filed appeals before the Tribunal which was disposed by order dated 26.09.2019 wherein it held that entire addition cannot be made but it should be restricted to the difference between GP on genuine purchases and GP on bogus purchases. For want of details, Tribunal restored the matter to the AO. Both Revenue and the assessee filed further appeals before High Court on 31.02.2021. The assessee filed Form 1 under VVS showing tax liability of Rs.40,58,100 but certificate was issued for Rs. 1,62,32,404/-by relying on Q.no.7 of Circular 9 of 2020 dated 22.04.2020.(2020) 422 ITR 131(St) Hence, the assessee filed Writ which was disposed holding that the reliance placed by the Revenue on said Circular was unstainable. Accordingly, the Revenue was directed to compute disputed tax demand by giving effect to the order passed by Tribunal and issue Form 3 within 3 months from date of the order. Agarwal Industrial Corporations Ltd. v UOI [2023 455 ITR 404 (Bom)(HC) (AY. 2011-12)
Agarwal Industrial Corporations Ltd. v UOI (2024) 461 ITR 74 (Bom)(HC)
S. 2(1) :Disputed tax-Matter remanded by the Tribunal to the Assessing Officer-Bogus purchases-Tax to be computed on the element of Gross Profit in respect of addition made for bogus purchases and not entire purchases added by the AO in original assessment.[S. 2(1)(j)(B), 3, IT Act, S. 68. Art. 226]