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2018 (10) TMI 1181 - AT - Income TaxRectification of mistake - error in cause title - directing the AO to estimate 30% net profit on alleged bogus purchases - Held that:- No enquiries were made by the AO from the suppliers either u/s 133(6) or otherwise to establish the fact that the purchases were in the nature of accommodation bills. Merely because the assessee has voluntarily offered the said purchases to tax does not absolve the AO from his responsibility of proving that the purchases were in fact taxed particularly when the disclosure was impliedly retracted by contesting the addition during assessment and appellate proceedings. AO has not brought out any evidence on record by conclusively proving that the purchases were not genuine and merely relied upon the sales-tax department’s list coupled with assesse’s own admission on the said purchases during survey action u/s 133A, to make the addition. Under similar facts and circumstances, the co-ordinate bench of ITAT, Kolkata Bench in assessee’s sister concern case in DCIT vs Laboratories Griffon Pvt Ltd [2018 (4) TMI 709 - ITAT KOLKATA] for AY 2011-12 has restricted the disallowance @30% of the alleged bogus purchases. Therefore, we direct the AO to restrict addition @30% of alleged bogus purchases. Addition made towards capital goods from the alleged suspicious dealers - Held that:- We find that the ITAT, Mumbai Bench in the case of New Consolidated Construction Co Ltd vs DCIT [2017 (12) TMI 928 - ITAT MUMBAI] has considered similar issue and held that findings given in respect of purchases of raw materials shall apply to purchases of capital goods in case of alleged bogus purchases and accordingly direct the AO to estimate 12.5% profit on alleged bogus purchases of capital goods and balance amount shall be treated as capital asset and depreciation shall be allowed at the prescribed rates. Thus we direct the AO to estimate 30% profit on alleged bogus purchase of capital goods and the balance amount shall be treated as purchase of capital assets and accordingly, depreciation shall be allowed at the prescribed rates on capitalized portion - Decided partly in favour of assessee.
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