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2022 (11) TMI 1410 - AT - Income TaxBogus purchases - Estimation of income - CIT(Appeals) erred in restricting the disallowance to 17.96% of the alleged hawala purchases over & above the profit shown by the assessee even through the assessee could not produce primary evidences like octroi receipt, lorry receipt, delivery challans, stock register, weighing slips etc., to prove the genuineness of purchases - HELD THAT:- When it has been categorically established that, the amount of bogus purchases is debited to P&L by fictitious tax invoices and the respondent assessee failed to establish the consumption of such goods in the execution of civil contract by adducing such stock movement records to the satisfaction of AO., then taxing such bogus purchases GP rate of goes against the principles of taxation embedded in chapter VI of the Act and against the ratio laid down in“N K Proteins Ltd” [2017 (1) TMI 1090 - SC ORDER] and “PCIT Vs Pinaki D Pinani” [2020 (1) TMI 700 - BOMBAY HIGH COURT] for the reason, we are of the considered view that, the Ld. AO was right in making 100% disallowance towards bogus / hawala purchases, and thus we are inclined to uphold the order of assessment and reverse the order the Ld. FAA. Appeal of the appellant revenue is allowed.
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