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2016 (5) TMI 19 - AT - Income TaxAddition on on account of inflated purchased - Held that:- AO in the instant case has disallowed the substantive purchase without making the substantive enquiry about the prevailing market price of the product in question. The AO also not considered the payment to the party which was made through the banking channel. The goods were exported after the custom clearance and the payment was realized in terms of convertible of foreign exchange. We also find from the report of the custom department that no over invoicing for the export of the goods was made. Addition on account of bogus purchase from M/s Monoharlal Mahabir Prasad - Held that:- AO has disallowed the purchase expenses due to non availability of the purchase bills. However the same has been allowed by the ld. CIT(A) after due verification of the necessary supporting evidence. Before us the ld. DR has not brought anything on record to controvert the finding of the ld. CIT(A), therefore we are confirming the order of the ld. CIT(A) and dismissed this ground of the Revenue. Deduction claimed by the assessee under section 80HHC - CIT(A) allowed the same on the ground that all the aforesaid conditions have been fulfilled by the assessee - Held that:- Now to avail the benefit under section 80HHC for the profit arising from the sale of the DEBT license the above said twin conditions needs to be satisfied. We accordingly find from the submission of the assessee that both the conditions have been fulfilled as provided in (a) and (b) of third proviso to section 80HHC of the Act. For the condition specified in clause (b) the assessee submitted that the Drawback credit attributable to custom duty was 35% in terms of Custom Tariff Heading 7018 and where as the DEPB entitlement was only 20%. We also find that the ld. DR has not brought anything contrary to the findings of the ld. CIT(A). In view of above we find no reason to interfere in the order of the ld. CIT(A). Therefore we dismiss the ground of Revenue.
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