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2018 (11) TMI 1690 - AT - Income TaxBogus purchases u/s 69C - applying average gross profit rate at 5.64% - HELD THAT:- Assessee has duly reconciled quantitative purchases with sales and the assessee is engaged in the trading activities. The assessee could not prove movement of material nor verification from these parties could be conducted. These parties are undisputedly listed as hawala dealers by Maharashtra Sales Tax department and on enquiries conducted by Maharashtra Sales Tax department, it was proved that these parties are hawala dealers issuing bogus accommodation bills without supplying any material. The assessee is beneficiary of these accommodation entries. The sales are however not doubted by Revenue and the assessee being trader has reconciled quantitative sale and purchase of goods dealt within by the assessee. Under these circumstances, only profit element embedded in such bogus purchases need to be brought to tax as income of the assessee which definitely involved guess work. The ratio of decision of Hon‟ble Supreme Court in the case of Kachwala Gems v.JCIT [2006 (12) TMI 83 - SUPREME COURT] is applicable - we confirm additions to the tune of 12.5% of such bogus purchases
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