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2017 (6) TMI 1293 - AT - Income TaxBogus purchases - AO has received the information from the office of DIT(E), Mumbai and from the Sales Tax Department, Mumbai regarding suspicious parties who are only providing accommodation entries without doing actual business - profit estimation - HELD THAT:- In this case substantial investigation has been carried out and the appellant should have come forward with a more convincing and controverting argument supporting with evidence. In a long line of judgements, which are contrary to the assessee It has been held that in such cases, the profit element embedded in the bogus purchases should be brought to tax. One such case, in line is that of Simit P. Seth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) in which 12.5% of profit rate application on such like bogus purchases has been deemed to be correct. Following the same line of reasoning, It is held that in this instant case the addition has been correctly made by the appellant for failure on part of the appellant to duly produce The relevant third-party evidence and verification which was desired by the assessing officer. Accordingly the addition made is confirmed and the ground of assessee dismissed.
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