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Issues Involved:
The judgment involves two tax appeal cases (No. 801 of 2013 and No. 803 of 2013) arising from a common order passed by the Income Tax Appellate Tribunal (ITAT) concerning assessment years 2005-06 and 2006-07. Tax Appeal No. 801 of 2013: The appellant filed a return of income for the assessment year 2005-06, declaring total income. The Assessing Officer found discrepancies in the purchases made by the appellant from M/s. R.R. Patel Trading Corporation, treating a portion as bogus purchases. The CIT(A) partly allowed the appeal, reducing the addition made by the Assessing Officer. Both the appellant and the revenue appealed against the CIT(A)'s decision. The ITAT partly allowed the appeal of the appellant and dismissed the revenue's appeal, leading to the revenue questioning the decision on the basis of the percentage of bogus purchases added. Tax Appeal No. 803 of 2013: In this case, the appellant filed a return of income for the assessment year 2006-07. Similar to the previous case, discrepancies were found in the purchases from M/s. R.R. Patel Trading Corporation. The CIT(A) partly allowed the appeal, reducing the addition made by the Assessing Officer. Both the revenue and the appellant appealed against the CIT(A)'s decision. The ITAT partly allowed the appellant's appeal and dismissed the revenue's appeal, leading to the revenue questioning the decision on the basis of the percentage of bogus purchases added. In both cases, the revenue challenged the ITAT's decision to restrict the addition for proven bogus purchases to 20% without providing a basis for this reduction. The Court noted that the Assessing Officer had initially added the entire amount of the purchases as income, which was reduced by the CIT(A) to 30%. The ITAT further reduced this to 20%, considering the evidence and circumstances of the case. The Court found no substantial question of law in the appeals and dismissed them accordingly.
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