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2021 (12) TMI 50 - AT - Income TaxEstimation of income - Bogus purchases - estimation of profit element - HELD THAT:- We agree with the view of the lower authorities that there should be an estimation of profit element from these purchases and should be estimated reasonably as the assessee could not conclusively prove that the purchases made are from the parties as claimed, especially in the absence of any confirmations from them. Taking the totality of facts and circumstances, keeping in view the nature of business of the assessee i.e., Trading in Ferrous and Non-Ferrous metals and the submission of the Ld. Counsel for the assessee that the benefit what the assessee got by way of VAT is 4% and the probable profit element may be adopted at 1% totaling to 5%, it would be justified if the profit element embedded in those purchases are estimated at 6%. We direct the Assessing Officer to estimate the profit element from the non-genuine purchases at 6% and restrict the disallowance of purchases to 6% and compute the income accordingly - Appeal of the assessee is partly allowed.
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