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2017 (12) TMI 1264 - AT - Income TaxBogus purchases - profit rate determination - Held that:- We uphold addition in the instant case by directing the AO to re-compute income after applying profit rate @ 5% of the bogus purchases to the tune of ₹ 8.45 crores and appeal of the assessee is partly allowed. We would like to clarify that the claim of the assessee for payment of additional VAT and interest on these alleged bogus hawala purchases from twelve dealers shall be verified by the AO as the said claim is set up for the first time before the tribunal and also since we have factored the additional VAT and interest etc. paid by the assessee on such alleged hawala purchases while estimating income on the said alleged hawala purchases by applying profit rate @5% of the alleged bogus purchases of ₹ 8.45 crores for the impugned assessment year, the deduction on account of additional VAT, interest etc paid by the assessee on these alleged bogus purchases cannot be availed once again in the year of determination of the additional liability by Maharashtra VAT authorities or in the year of payment thereof by the assessee as the case may be, as otherwise it will lead to double deduction. See Nikhil Kishore Gandhi case [2017 (12) TMI 1278 - ITAT MUMBAI]. The assessee gets part relief.
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