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2017 (11) TMI 1348 - AT - Income TaxBogus purchase - addition u/s 69C - rate of profit at which the income of the assessee is to be assessed - Held that:- Both the authorities have relied upon the BAP report. In CBDT circular no.2/2008, dated 22nd February 2008, the rate of profit in case of diamond manufacturing and trading has been fixed at 6%. However, the percentage referred to in BAP reports or CBDT circular are for transaction under normal circumstances, hence, cannot apply to unproved purchases. Thus, in our view, since, the assessee has failed to prove the genuineness of purchases from concerned parties disallowance on the alleged bogus purchases should be made at 6%. As far as the decision relied upon by the learned Authorised Representative we are of the view that since, what should be the profit rate in a particular case is a purely factual issue, the decision having been rendered in its own factual context will not apply. Accordingly, we direct the Assessing Officer to disallow 6% of the alleged bogus purchase. Ground is partly allowed.
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