Section 271AAD

What section 271AAD does, and where it sits. This library holds no authority that turns on it.

No authority in this library turns on Section 271AAD. That is a statement about this library and not about the law: it means no judgment, circular or instruction held here decides a point under it. What the provision does is explained below. If you are looking for a decision on it, say so through the search box — a provision people search for and we hold nothing on is the most useful thing we can be told.

Explained in this library

What section 271aad does, in plain English, before you read what the courts made of it.

Bogus purchases: when it is the profit element and when it is the whole invoice

My purchases have been called bogus. Is the addition the whole amount or only the profit in it, and how is the percentage fixed?

s.271AAD: a penalty equal to the entry itself

The show-cause says I may be penalised under s.271AAD for a false entry. What is that, and is it really 100 per cent?

The false-entry penalty is measured by the invoice, so cutting the addition does not cut it

The addition has been reduced to a profit element on appeal. Does the s.271AAD penalty come down with it?

The input-credit file and the assessment: neither binds the other, and both are evidence in the other

The same purchases are under an input-credit reversal in GST and a s.69C addition in income tax. Does a finding in one settle the other?

Worked examples

Notice situations in which section 271AAD does the work, taken from the first line to the last. Each step carries the authority that licenses it.

The purchases are called accommodation entries, the whole invoice value is proposed, and a penalty of the same amount alongside The notice wants to add my entire Rs 3.42 crore of purchases, not the profit in them, and there is a separate penalty show-cause for the same figure. The supplier's statement has not been given to me and the goods are in my stock register. Where do I start? 7 steps · 19 authorities · s.69C, s.37(1), s.115BBE, s.271AAD