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2018 (9) TMI 216 - AT - Income TaxBogus purchases - estimation of profit - Held that:- The notices were issued by the AO u/s. 133(6)of the Act. One notice returned unserved and from the remaining two no reply was received by the AO. AO had issued these notices in the address given by the assessee. Also we find that the AO does not dispute the sales made by the assessee. In such a context, only the profit embedded in such bogus purchases has to be estimated and brought to tax. In the case of CIT vs. Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) has held that where purchases were not bogus but were made from parties other than those mentioned in the books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of the assessee. Set aside the order of the Ld. CIT(A) and direct the AO to estimate the profit @ 12. 5% on the disputed purchases of ₹ 36, 73, 217/- and bring to tax ₹ 4, 59, 150/- in place of ₹ 36, 73, 217/- done by him.
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