Re: Bogus Purchase addition
Can order by the Hon’ble ITAT be considered as FAVOURABLE order as addition @ 8%/100% is reduced to 3 % which is less than 5% (for which VSV is being opted).
Will answer be different if parties for which addition is made differs, but the addition is under purchases from Bhanwarlal Jain Group
As we understand, in a case if CIT adds 100 rupees, and subsequently the ITAT reduces it by 50 percent i.e. 50 rupees. It is a favourable order to the extent of 50 percent. Therefore, the assessee should be allowed to avail the scheme by settling the dispute at tax payable on 25 percent addition along with the upheld addition of 50 percent i.e. 75 percent.
Applying the same principle, if 8 percent addition is reduced to 3 percent i.e. 5 percent relief is granted. The disputed tax amount should be computed at 5.5 percent. [3 percent + 50% of (5 percent)].
As per 2nd proviso to section 3 of VSVA, the favourable order should be of the assessee only and cannot be in case of any other assessee with similar/identical facts. Whether the purchases from Bhanwarlal Jain Group or other group it may not be any difference . We have to refer section 9 which deals with certain exceptions referred therein only .Facts of the querist is not covered under the exception.
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