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2018 (3) TMI 1579 - AT - Income TaxAddition u/s 68 - credit purchase of Supari, as unexplained cash credits - Held that:- The assessee had made purchases of ₹ 3,00,90,226/- from M/s. Ganesh Trading Co., Kolkata on credit, against of which, part payment of ₹ 65,00,000/- was made to the said creditor through banking channel and balance amount of ₹ 2,35,90,226/- was shown as credit balances appearing in the name of said creditor in the books of assessee, which too was paid in succeeding years through banking channel and the Revenue Authorities have not raised any doubt on discharge of this liability in subsequent years. The assessee has also filed a comparative chart, showing the turnover, gross profit and net profit for three consecutive years including the year in dispute, on perusal of which, it is found that the gross profit and net profit shown by the assessee is progressive and the AO has not doubted the same. It is also worth mentioning that the addition of ₹ 2,35,90,226/- if added to the declared profit of ₹ 8,69,652/- as shown in the comparative chart filed, the gross profit would work out to ₹ 2,44,59,878/- giving GP rate of 105.22%, which is not appealing to reason at all. In view of all these facts and laying our hands on the aforesaid decisions, we are of the considered opinion that the addition made by the AO and sustained by the ld. CIT(A) was not justified. Thus addition is not sustainable - Decided in favour of assessee.
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