| Question And Answer | |
|---|---|
| Subject: | circular trading |
| Category: | Income-Tax |
| Querist: | bks |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | cash credits, circular trading |
| Date: | January 29, 2023 |
what can AO add in such a case where circular trading is detected by search wing ? percentage of notional profit ? or disallow only loss ?
The facts of the case will have to be analysed further to provide a comment on the issue. Refer K. P. Abdul Majeed. v. ACIT (2019) 267 taxman 151 / 414 ITR 531 / 180 DTR 249 / 310 CTR 261 (Ker.)(HC), the theory of peak credit can be applied . The burden is on the assessee to prove circular trading and how it is shown in GST return .
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