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2016 (3) TMI 1123 - AT - Income TaxBogus purchases - Held that:- Undisputedly, the books of accounts of the assessee are audited as per the provisions of the law. There is also no dispute that the auditors have not qualified, the purchases made by the assessee during the year under consideration. It is also an admitted fact that no adverse inference has been drawn in so far as sales are concerned. We find that in the audit report, the auditors have mentioned that they examined purchase and sales register. We also find that the trading accounts are quantified. There is no denying that the purchases of the assessee are made from small “raddiwallas” therefore, it is not practically possible to have purchases supported by bills. Secondly, it is equally not possible to furnish details of such small “raddiwallas”. Therefore in our considered opinion, treating 15% of the total purchases as bogus purchases is unjustifiable and the action of the A.O is totally erroneous on the peculiar facts of the case in hand.There may be some room for some inflation in the purchases and the estimation of the profit by the First Appellate Authority appears to be reasonable and pragmatic. We, therefore, decline to interfere with the findings of the ld. CIT(A), all the appeals of the revenue and the assessee are accordingly dismissed.
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