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2018 (5) TMI 2010 - AT - Income TaxBogus purchases - making additions @ 12.5% on the purchases by holding the said purchases bogus - HELD THAT:- When the payment to the concerned parties are through proper banking channel and there is no evidence before the Assessing Officer that the payments made were again routed back to the assessee, hence the additions were made by the AO on estimation @ 12.5% of the bogus purchases and the said order was also upheld by Ld. CIT(A). We further notice that AO made no efforts to check the bank accounts of the suspected parties to find the track of money paid, whether it was received back by the assessee. Even the statements recorded by the Sales Tax Department and the material collected by I.T. Department had not been made available to the assessee. AO did not appreciated the evidences adduced by the assessee to substantiate his purchases from the said parties, including details such as bills, ledger account, copy of invoices, bank statements, etc In order to check possible revenue leakage, certain additions may be sustained in the present case in the given facts and circumstances and that could be on the basis of estimation by adjusting the existing gross profit on the bogus purchases already declared by the assessee, which are amounting to 3,45,771/-. We also found that assessee has also paid to Sales Tax Department a sum of ₹ 5,22,266/- and after taking into consideration, both the above figures, the additions which are required to be upheld to the tune of ₹ 2,28,819/- as per the chart submitted by the assessee. Therefore, we are inclined to modify the orders passed by Ld. CIT(A) and to restrict the additions to the extent of 2,28,819/- of such purchases. Appeal filed by the assessee is partly allowed.
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