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2019 (2) TMI 784 - ITAT MUMBAIDisallowance of bogus purchases - CIT-A restricted addition to 8% by granting the benefit of gross profit (4.5%) already declared by the assessee - whether the assessee has not proved the genuineness of the transaction? - Held that:- AO got information that the purchases made by the parties, mentioned in the assessment order are suspected parties and are mentioned at the website of Maharashtra VAT Department. The assessee claim to have made purchases of ₹ 34,92,40,689/-, therefore, the assessee was asked to furnish the details of purchases made from these parties. The notices issued/served under section 133(6) of the Act, however, there was no reply from the concerned parties. The facts are that neither the parties were produced nor the transaction was substantiated with positive material therefore, the Ld. Assessing Officer made the addition at the rate of 12.5% of such bogus purchases. On appeal, before the Ld. Commissioner of Income Tax (Appeal), the GP was adopted at the rate of 8% by granting the benefit of gross profit (4.5%) already declared by the assessee. The Revenue is aggrieved and is in appeal before this Tribunal. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, admittedly, there cannot be any sale without purchases and only the profit element embedded in the bogus purchases can be added. Since, the assessee has already declared gross profit @ 4.5%, therefore, we find no infirmity in granting the benefit of the GP already declared by the assessee, because in the competitive world of trade, there may not be huge profit. - Decided against revenue
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