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2018 (12) TMI 1050 - AT - Income TaxReopening of assessment - addition under the head peak credit of transaction of bogus purchases - Held that:- The issue of bogus purchase of diamonds from BJ group has been already been deliberated upon by the Tribunal and it stands decided. Facts of the case under consideration are almost identical to the facts of Vama International [2018 (2) TMI 1760 - ITAT MUMBAI]. In that case also the AO had added the entire purchases to the income of the assessee and the FAA had given part relief to the assessee. In the instant case, the assessee was denied the opportunity of cross examination though it had made a request to the AO during the assessment proceedings. By not allowing cross examination of the third party, whose statement was being used against the assessee, the AO had violated the basic principles of natural justice. Only on that count the order can be quashed. But, we are considering other factors. BJ has retracted his statement. So, the authenticity of the material relied upon by the AO reduces to a great extent. The supplier has admitted the transaction and the AO has not doubted the sales. It is also found that DD had filed VAT returns. Estimate the profit of 12.5% of the purchase from DD - addition invoking section 69C - Held that:- While deciding the appeal filed by the AO,we have decided the issue against the AO. Following the same, we decide ground no.6 in favour of the assessee. We are also of the opinion that provisions of section 69C are not applicable in case of alleged bogus purchases. Addition u/s 69C - Held that:- Since we have decided the issue of addition u/s 68 in favour of the assessee, the addition as sustained by the CIT(A) u/s 69C of ₹ 3,45,000/- is also ordered to be deleted.
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