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2016 (4) TMI 948 - AT - Income TaxBogus purchases - Held that:- After going through the factual matrix and understanding them in the right perspective, in our considered opinion, the assessee has made purchases directly from the producers/agriculturists who are termed as unregistered dealers (URD) which means that the materials have actually been purchased by the assessee but without any supporting document. The statement of the assessee is also correct because there are no bogus purchases of goods but only supporting accommodation bills are bogus. There is no denying that there is a physical movement of goods- purchases as well as sales. In fact, there is not even a whisper of any bogus sales, neither by the Assessing Officer nor by the First Appellate Authority. This may be a case of purchases supported by bogus accommodation bills but at the same time, we cannot say that there were no purchases. This was also brought to the notice of the A.O by the assessee in his submission dated 12.11.2010 qua para 6 b which can be found at page 11 of the assessment order wherein the assessee had categorically stated that he has made purchase of goods from direct producer and only invoices of these three party were taken to regularize the same and by doing so, the assessee was getting the benefit in purchase price of ₹ 4 to 5 per 20 kgs. It was further made very clear that it is not a case where materials were not actually purchased. Thus, it can be seen that even the admission of the assessee related to the procurement of alleged bogus bills at no stage, the assessee admitted that there were no purchases.However, at the same time, in our considered opinion and in our understanding of the facts the possibility of inflated purchases cannot be ruled out. As the assessee himself as admitted in his submission that he is getting the benefit of ₹ 4 to 5 per 20 kgs., an addition of 8% should meet the ends of justice. - Decided partly in favour of assessee Addition in respect of alleged admitted undisclosed income - Held that:- Since we have directed to restrict the addition on account of bogus purchase to 8% of the total purchases, in our considered opinion any admission/disclosure made by the assessee on account of alleged bogus purchases would be taken care of by the addition sustained, therefore, there is no need for making separate additions on this count.- Decided in favour of assessee
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