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2018 (1) TMI 24 - AT - Income TaxBogus purchases - purchase from grey market - Held that:- In the present case though the assessee had in his statement recorded under Sec. 133A recorded during the course of the survey proceedings admitted that the purchases made from the aforesaid parties were bogus and had offered the purchase consideration of ₹ 60,08,692/- as his income, as well as the A.O had also gathered information that the aforesaid supplier parties had admitted before the Sales tax authorities that they had merely provided accommodation entries and had not carried out any genuine sales, however, independent of the aforesaid facts, the CIT(A) had sustained the addition primarily for the reason that the assessee had failed to substantiate the genuineness of the purchase transactions by placing on record supporting documentary evidence. We find that the CIT(A) after appreciating the fact that the purchases were recorded in the stock register and the corresponding sales of the same had been accepted by the A.O, therefore, had fairly concluded that the addition in the hands of the assessee was liable to be restricted to the extent of the profit element involved in making of the purchases, which could safely be concluded to have been made by the assessee from the Open/grey market. As regards the claim of the assessee that the lower authorities had erred in taking the quantum of the alleged bogus purchases at ₹ 60,08,592/- as against ₹ 59,83,592/-, we find that the aggregate of the purchases for the year under consideration as had been reproduced at Page 2 & 3 of the assessment order works out to ₹ 60,08,592/-. We find that as there is neither anything available on record which could go to prove that there is any such mistake, nor any assistance from the assessee who had chosen not to put up an appearance during the course of hearing of the appeal, therefore, we are constrained to conclude that the lower authorities had rightly adopted the bogus purchases at ₹ 60,08,592/-.
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