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2016 (1) TMI 893 - AT - Income TaxAddition on account of inflated and bogus purchases - adoption of N.P. rate - CIT(A) deleted the addition - Held that:- It is absolutely clear that, firstly, without purchase of material the execution of work contract given by the MCGM is not possible and even if the supplier is not traceable and not coming forward to confirm the sales, then also the factum of purchase cannot be denied; and secondly, the net profit rate on the entire contract work and of the sub-contractor is not more than 8% and 5% respectively. Here in this case also, even if the particular supplier has not confirmed the purchases, this does not lead to any inference that assessee has not made any purchases and the net profit rate of 5.87% is not only unreasonable but is still on a higher side as per finding given by Settlement Commission. Accordingly, the finding of the fact as recorded by the CIT(A) in the impugned order is affirmed and we hold that the addition of ₹ 74,01,988/- made by the AO has rightly been deleted. - Decided in favour of assessee.
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