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2017 (10) TMI 1509 - AT - Income TaxBogus purchases - quantification of the profit involved in making of the purchases by the assessee of the goods under consideration from the open/grey market - HELD THAT:- In view the VAT benefit of (1%) and Custom duty (2%), the profit element from making of such purchases, in the backdrop of certain other benefits that the assessee would had derived from making of the same from the open/grey market, coupled with the fact that the unidentified seller operating in the open/grey market would not be transferring the entire set of benefits to the buyers, thus, can fairly be taken at 4%. We thus, in light of our aforesaid observations direct the A.O to restrict the addition in the hands of the assessee to 4% of the aggregate value of purchases of ₹ 2,49,99,469/- claimed by the assessee to have been made from the aforementioned party, viz. M/s Olive Overseas Pvt. Ltd. The addition sustained by the CIT(A) is modified in terms of our aforesaid observations.
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