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2018 (12) TMI 1446 - ITAT MUMBAIAddition on account of non-genuine purchases - CIT-A directed AO to restrict the disallowance to 12.5% of the purchases made from the hawala operators - Held that:- Neither before the AO nor before the CIT(A) the assessee could establish the genuineness of the purchases made from the concentrated parties through proper documentary evidences. Further, even before me also the assessee has not produced any material to prove the genuineness of the purchases made. However, as rightly observed by the CIT(A), the AO has not doubted the sales effected by the assessee. Therefore, as a natural corollary it has to be assumed that in the absence of purchases made, the assessee could not have effected the sales. Only the profit element embedded in the non-genuine purchases can be considered for addition to prevent leakage of revenue. Admittedly, the learned CIT(A) has restricted the addition made to the profit element embedded in the bogus purchase by estimating the same at 12.5%. The estimation of profit at 12.5% as made by the CIT(A), in my view, being reasonable needs no interference. - Decided against assessee.
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