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2015 (11) TMI 1671 - AT - Income TaxG.P. addition - bogus purchases - Held that:- Purchases made from three parties were added by the AO on the plea that assessee has just taken a purchase bill. The CIT(A) after verifying the records observed that as per the monthly quantitative details of purchase and sales, the assessee had sold goods so purchased, when the sale is not disputed, the addition on entire alleged purchase is also not justified. The CIT(A) also observed that as per elementary rule of accountancy as well as taxation loss/profit from business cannot be ascertained without deducting cost of purchase from the sales. Since the department has accepted the sales, the CIT(A) deleted the addition after sustaining the GP addition of 10% to plug the possible leakage of revenue. Hence, the addition was restricted to 10% of the alleged bogus purchases. Detailed finding recorded by CIT(A) had not been controverted by department and assessee by brining any positive material on record. Accordingly, we do not find any infirmity in the order of CIT(A) for sustaining addition of 10% of such purchases. - Decided against assessee.
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