India's ITAT trims bogus purchase penalty to 10% and upholds ₹23 Lakh tax addition in Bengaluru case

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) reduced the bogus purchase addition for civil‑construction partnership Anubhav Engineering Co. from 12.5% to 10%, recognising that profit margins in civil construction are typically 2‑3% and that the higher rate was excessive.

In a separate ruling, the Bengaluru ITAT upheld a ₹23 lakh addition under section 69A after cash was seized from the assessee’s vehicle during the 2018 Karnataka Assembly elections. The tribunal rejected the claimant’s explanation that the money belonged to unnamed farmers, finding the argument implausible and applying the statutory presumption under section 132(4A).