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2021 (1) TMI 1017 - AT - Income TaxBogus purchases - CIT-A restricted disallowance by the CIT(A) to 4% of the aggregate value of the impugned purchases HELD THAT:- CIT(A) while relying on the order passed by his predecessor for A.Y 2010-11 had lost sight of the aforesaid material fact - we are unable to persuade ourselves to subscribe to the scaling down of the disallowance of the entire value of the impugned purchases made by the A.O to 4% of the value of such purchases by the CIT(A). We also cannot remain oblivious of the fact that the assessee had failed to prove that the impugned purchases were either accounted for in its sales or formed part of its closing stock for the year under consideration, for the reason, that the relevant documentary evidence had been impounded by the Sales tax department in the course of an action conducted on the assessee, and thus, were not available with the assessee. Mater in all fairness requires to be revisited by the A.O with an opportunity to the assessee to demonstrate before him that the impugned purchases had either found its way as a part of the accounted sales or formed part of its closing stock for the year under consideration. In case the assessee is able to demonstrate before the A.O that the impugned purchases were either accounted for in its sales or formed part of its closing stock for the year under consideration, then, the scaling down of the disallowance by the CIT(A) to 4% of the aggregate value of the impugned purchases would be in order. Appeal filed by the revenue is allowed for statistical purposes.
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