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2015 (12) TMI 620 - AT - Income TaxUnexplained purchases - estimation of income - Held that:- It is not in dispute that the assessee made sales out of the purchases made from grey market and even if some benefit is accrued it has to be in tune with the normal profit earned in this line of business. We are concerned with A.Ys. 2009-10 and 2011-12 wherein the assessee has declared gross profit of 19.49% and 18.85%. For A.Y. 2008-09 she declared 22.34% GP and for 2013-14 it was 22.46%. Thus by taking into consideration the additional benefit, if any, availed by the assessee by making purchases in the grey market, I am of the view that an estimate of income at 22.5% of the gross purchases would meet the ends of justice and I direct the AO accordingly. In other words, addition reference to 22.5% of purchases made in grey market is hereby directed to be added to the total income. As regards interest charged under section 234A, 234B and 234C of the Act, as rightly observed by the learned CIT(A), the AO has no discretion in this regard. However, the assessee would get substantial relief, if any, in the light of the fact that the disallowance is scaled down further. - Decided partly in favour of assessee.
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