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2021 (6) TMI 269 - AT - Income TaxBogus purchases - gross profit rate earned from bogus purchase - HELD THAT:- We find that in the similar facts and circumstances and on identical situation, the Hon’ble Bombay High Court in the case of Pr.CIT Vs. Mohammad Haji Adam & Co. [2019 (2) TMI 1632 - BOMBAY HIGH COURT] wherein it has been held that no ad-hoc addition at the rate of 10% of bogus purchases is warranted. Rather, the addition should be made to the extent of difference between gross profit rate on genuine purchases and gross profit rate of bogus purchases. For example, if the GP percentage of genuine purchases comes to 8% whereas GP percentage of bogus purchases comes to 10%, then 2% of bogus purchases can be added to the income of the assessee. Reverting to the facts of the present case and taking guidance from the said judgment of the Hon'ble Bombay High Court in the case of Pr.CIT Vs. Mohommad Haji Adam (supra.), we set aside the order of the Ld. CIT(Appeal) and restore the matter back to the file of the Assessing Officer for undertaking this exercise and finding out the excess gross profit rate earned from bogus purchases and then making the addition accordingly after allowing reasonable opportunity of hearing to the assessee.
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