Only 3 Out of 26 Gold Transactions Found Bogus: ITAT Orders Re-computation Based on Gross Profit...

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) has provided partial relief to a taxpayer in a case involving alleged bogus gold transactions. The Assessing Officer had treated all 26 gold purchase transactions as bogus and made a large addition to the income. However, upon review, the ITAT found that the department could only definitively prove that 3 of the 26 transactions were bogus. For the remaining transactions, the department's evidence was insufficient. The tribunal, therefore, directed a re-computation of the income. Instead of confirming the entire addition, it ordered that the income should be estimated by applying a reasonable Gross Profit (GP) margin only on the value of the 3 transactions that were proven to be non-genuine. This ruling ensures that tax additions are based on concrete evidence rather than on general suspicion, leading to a more fair and proportionate assessment.