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2019 (12) TMI 961 - AT - Income TaxBogus purchases - HELD THAT:- No adverse inference of the AO vis–a–vis the documentary evidence furnished by the assessee is discernible from the assessment order. Further, the assessee had furnished quantitative details of purchases and sales both before the Assessing Officer as well as the learned Commissioner (Appeals). Commissioner (Appeals) has recorded a factual finding that the assessee had effected corresponding sales against the purchases. Commissioner (Appeals) has rightly held that the addition of the entire non–genuine purchases cannot be made. This is so, because in the absence of purchases, the assessee could not have effected the corresponding sales. In such circumstances, one can come to a logical conclusion that the assessee must have purchased the goods from grey market to avoid payment of Sales Tax / VAT and to regularize such purchases, the assessee might have obtained accommodation bills from hawala operators. In such scenario, the profit element embedded in the non–genuine purchases can be considered for addition. After considering the overall facts and circumstances of the case and nature of business carried on by the assessee as well as consistent view of the Tribunal and different High Courts in such types of cases, we are of the considered opinion that profit estimated @ 12.5% of the non–genuine purchases can reasonably be considered for the purpose of addition.
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