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2017 (11) TMI 1143 - AT - Income TaxAddition of bogus purchases - profit estimation - assessee was not allowed cross examination of the parties on whose bases addition made - Held that:- The estimation of the profit element involved in making of the purchase under consideration had fairly been adopted by the CIT(A) @25% after considering certain important factors, viz. (i). the gross profit declared by the assessee as deliberated upon by the CIT(A) in the backdrop of the profit percentage involved in the trade line of the assessee did not inspire much of confidence; and (ii). the assessee had himself offered that addition within the range of 12.5% to 25% of the aggregate value of the purchase transactions under consideration may be made as regards the profit embedded in respect of the purchase transactions under consideration. We have given a thoughtful consideration to the estimation of the profit element as regards the bogus purchases under consideration at 25% by the CIT(A), and are persuaded to be in agreement with him. We are of the considered view that the CIT(A) after rejecting the books of account of the assessee, had therein deliberated on the gross profit of the assessee as against that reflected in the trade line being of the view that the same did not inspire much of confidence, had thus discarded the same by observing that the profit involved in the trade line of the assessee was found to be comparatively more. Thus, the aforesaid observations of the CIT(A) laid down the very foundation of his conviction that the purchases debited by the assessee in his books of account were inflated. We find that no attempt had been made by the ld. A.R before us to either dislodge the said observation of the CIT(A), or to prove that the same was perverse We find that the A.O after making independent inquiries and conclusively proving that the assessee had failed to substantiate the genuineness and veracity of the purchase transactions and therein discharge the onus as stood cast upon him, had only thereafter concluded that the purchase transactions under consideration were found to be ingenuine. We are of the considered view that no infirmity as regards sustaining of the observations of the A.O and the addition emerging there from does arise from the order of the CIT(A), solely for the reason that the assessee was not allowed cross examination of the aforementioned parties- Decided against assessee.
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