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2019 (2) TMI 112 - AT - Income TaxDisallowance of bogus purchases - Held that:- It is not in dispute that the purchases of the assessee are not fully verifiable. The book result of the assessee is not reliable and therefore, the lower authorities were justified in rejecting the book result of the assessee. However, keeping in view the above comparable cases which were assessed by the department, it is equally difficult to sustain the assessment made by the revenue. DR could not dispute the fact that the above named persons were engaged in same line of business in which the assessee was engaged in. Therefore, going by the percentage of income assessed in their case ranging from 0.12% to 0.49%, it cannot be believed without cogent material that the assessee could have earned income of 12.33% of its turnover. We, therefore, set aside the orders of the lower authorities. We find that the highest rate of net profit assessed in comparable case for the year under consideration is 0.49% of the turnover. In order to considered opinion it shall be fair and in the interest of justice that the AO is directed to take assessee’s net income at 0.49% of its turnover. Direct AO to recompute the assessee’s income. Thus, this ground of appeal of the assessee is partly allowed.
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