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2018 (10) TMI 1741 - AT - Income TaxBogus purchases - addition u/s 69C - additional profit in excess of 5% - HELD THAT:- It is not disputed that assessees had produced invoices from the concerned vendors and said invoices carried TIN as well as GST details of the vendors - the receipt of the material were properly recorded by the assessees in their stock registers. The sales effected by the assessees was never disbelieved. When the sales are accepted, we cannot say that there were no corresponding purchases. Nevertheless, it is true that assessee despite claiming the purchases to have been effected through some intermediaries, were unable to produce the intermediaries or file confirmations from them. Hence, we cannot say that assessee had made all necessary efforts for proving the purchases claimed to have been made from the parties mentioned in the table above, beyond preponderance of probability Assessees have also submitted that its gross profit including that of purchases considered by the lower authorities as bogus, came to 8.91% to 20.88% for the impugned assessment years. Even if we accept the contention of the Revenue that 25% mark up was justified based on the judgment of Gujarat High Court in the case of Sanjay Oil Cake Industries [2008 (3) TMI 323 - GUJARAT HIGH COURT] , what could at the best be added is only the shortfall between declared gross profit and the estimated gross profit of 25%, and such shortfall fell within the range of 5 to 6%. In such circumstances, in order to give a quietus to the matter, we are inclined to follow the decision of M/s. Ralf Jems Pvt. Ltd [ 2017 (12) TMI 746 - ITAT MUMBAI] Addition that are to be made is fixed at 6%, of what is considered as value of the alleged bogus purchases and nothing more. We direct the ld. Assessing Officer to recalculate the addition accordingly. Alleged commission, in the first place, assessees had not claimed any commission payment. Estimate of ₹ 5,000/- per bill was based on pure surmises. Such additions are therefore deleted.
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