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2012 (8) TMI 737 - AT - Income TaxAddition made for bogus purchases – letters issued u/s 133(6) returned as unserved in the case of at least 22 parties - no reply received from at least another 11 parties – cheques encashed by third parties at places, which were not mentioned anywhere in the purchase bills - Held that:- It is observed that in the remand proceedings, creditors send confirmation letters, and confirmed the receipt of cheques on account. In view of aforesaid, we find that the assessee has partially discharged her onus to substantiate the purchases made by her. The purchases have been accounted in the books of account. The sales reported by the assessee have been accepted by the assessing authority. The sales have been made out of the opening stock and purchases made by the assessee. If the purchases omitted by the assessing authority are really excluded from the stock account, it would not have been possible for the assessee to arrive at the sale figures reported by her. It is to be seen that the income generates out of the sales. When all these facts are taken into consideration, it is not possible for us to endorse the view of the lower authorities that the entire such purchases objected to by them should be treated as bogus At the same time, it is also not possible to accept the entire contentions advanced by the assessee, since confirmations have been received only during remand proceedings. Hence, an addition on account of alleged bogus purchases is called for, however with moderation – Decided partly in favor of assessee
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