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2014 (3) TMI 147 - HC - Income TaxRestriction of addition – Bogus purchases made - Applicability of Section 40A(3) of the Act - Whether the Tribunal has substantially erred in restricting the addition made by the Assessing Officer to 5% of the total bogus purchases made – Held that:- The entire issue is based on materials on record - The Tribunal did not accept the Revenue’s stand that the purchases were bogus, in the sense that no material was received - the Tribunal held that the material was actually received for which payments were made - The Tribunal has not committed any error so as to give rise to any question of law - The Tribunal looking to the material retained portion by giving cogent reasons - the assessee could produce before the authorities the precise rate at which the purchases were made from M/s. Vishal Traders and other suppliers to demonstrate that the purchases made on the same day carried the same price - This would substantially eliminate the angle of the purchase price being artificially inflated - the Tribunal also noted other parameters such as higher net and gross profit rates of the present year compared to the earlier years of the recent past – thus, no question of law arises – Decided against Revenue
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