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2017 (5) TMI 1811 - AT - Income TaxEstimation of income - bogus purchases - CIT(A) estimated @ 12.5% - HELD THAT:- The assessee has, admittedly, made bogus purchases from the stated parties but has made payment by account payee cheques and obtained tax invoices. Assessee has maintained inventory of stock and also consumed the material purchase in executing contract work. It means that the assessee has obtained bogus bills from the above stated hawala entry operators who provides only bills and not actual goods. Actually, the assessee admitted that he has made purchases from grey market from where he has avoided payment of VAT and also at lower rate than the market price. Once, the stock tally is there and no defect is pointed out only option left with the Revenue authorities is to apply profit rate and CIT(A) has rightly applied profit rate at the rate of 12.5% of the bogus purchases. Decided against revenue.
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