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2017 (8) TMI 712 - AT - Income TaxBogus purchases - estimation of income - CIT(A) reduced the addition to 12.5% - Held that:- Where all the purchases are bogus and since the assessee failed to prove the genuineness it cannot be allowed, but could not adduce any evidence or cogent material which may prove that the purchases and sales made by the assessee were not reconciled. This fact proves that the assessee would have made purchases as the assessee could make the sales only if purchases are made. Without making purchases it would not be possible that the assessee could have made the sales. The Revenue has duly accepted the sales made by the assessee. The natural inference will be that the assessee might not have made the purchases from these parties, but to save tax might have made the purchases from some other parties and procured the bills these parties. This does not prove that there had not been actual purchases made by the assessee. By making purchases from some other parties the assessee might have saves tax. To that extent the assessee may have earned income. Therefore, we do not find any illegality or infirmity in the order of the CIT(A) in reducing the addition to 12.5%. Appeal filed by the Revenue is dismissed
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