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2019 (12) TMI 202 - AT - Income TaxAddition on account of non–genuine purchases - HELD THAT:- There is no dispute to the fact that the assessee was unable to prove with conclusive evidence, the source of the disputed purchases made from certain parties. However, it is evident from the order of Commissioner (Appeals), during the appeal proceedings the assessee had furnished quantitative details of purchases and sales with sample copies of bills to establish the nexus between the purchases and corresponding sales. The aforesaid facts establish that the assessee certainly had purchased the goods, though, may not be from the declared source. This leads to the logical conclusion that the assessee might have purchased the goods from some other sources to avoid payment of Sales Tax / VAT, thereby, generating extra profit not disclosed to the Department and to regularize such purchases has obtained the accommodation bills. Entire purchase cannot be treated as income of the assessee, but, the profit element embedded therein can be considered for addition - nature of business carried on by the assessee, in our view, the decision of learned Commissioner (Appeals) in restricting the addition to 12.5% of the non–genuine purchases is good enough to take care of leakage of revenue on account of suppression of profit. The aforesaid decision of learned Commissioner (Appeals) is also in consonance with the view expressed by the higher judicial authorities including the Tribunal in similar nature of cases.
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