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2020 (11) TMI 477 - AT - Income TaxEstimation of income - bogus purchases - HELD THAT:- Considering the nature of business of the assessee the Ld. AO has made peak amount invested in alleged bogus purchases, whereas the Ld.CIT(A) has scaled down addition to 12.50% gross profit on total alleged bogus purchase. Although, both authorities have taken different method and rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. In this case, the assessee is into the business of trading in ferrous and nonferrous metals and the rate of profit in this kind of business is very low. Considering facts and circumstances of this case and consistent with view taken by the Co-ordinate Bench in number of cases, we are of the considered view that 12.50% gross profit rate adopted by the ld. CIT(A) appears to be on higer side and hence, we direct the ld. AO to estimate 6% gross profit on alleged total bogus purchases from those parties. - Decided partly in favour of assessee.
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