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2017 (8) TMI 747 - ITAT MUMBAIBogus purchases from two parties - based on list of hawala operators published by Maharashtra Sales-tax Department relied upon - addition u/s 69C - reasonable profit computation in case of these transactions - Held that:- Assessee has produced certain details to prove the purchases from the said parties, in view of the fact that the assessee could not prove the existence of the parties and also could not rebut the finding of Maharashtra State Sales-tax department that the parties were hawala operators, involved in providing accommodation entries, the purchases from the said parties cannot be accepted as genuine. But keeping in view the fact that the AO had not doubted sales declared by the assessee, a reasonable inference can be drawn that the assessee has purchased goods from the grey market and obtained bills from these parties to cover up the purchases. Therefore, under these facts and circumstances, what needs to be taxed is only the profit element embedded in such purchases, but not the entire purchases from these parties. In this case, the assessee is involved in specialized business of providing lifting solutions of heavy equipment from the ground level to the critical point of its final placement which requires specialized skills and knowledge. The assessee also declared a gross profit of 37% on its gross receipts. Keeping in view overall facts and circumstances of the case, we are of the considered view that a reasonable net profit of 12.5% on total bogus purchases would be sufficient to meet the ends of justice. Hence, we direct the AO to estimate net profit of 12.5% on total purchases made from the above two parties. - Decided partly in favour of assessee.
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