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2021 (12) TMI 860 - AT - Income TaxReopening of assessment u/s 147 - Addition of bogus purchases - addition on account of disallowance of 25% of purchases - HELD THAT:- AO has not disputed the sales of the assessee. No sale is possible without purchases. The statement of accounts of the assessee was not rejected by the assessing officer. CIT(A) confirmed the addition made by AO - even if the parties are failed to prove the genuineness of entire transaction of such tainted purchases, the revenue authorities are not entitled to bring the substantial or entire transaction to tax, rather to tax the income component in such tainted transactions to avoid the possibility of revenue leakage. After considering the decision of Tribunal in assessee’s own case for earlier year and the GP and NP ratio declared by assessee for the year under consideration. We find that assessee has declared in AY 2009-10 the assessee has declared GP at 4.95 %, in AY 2010-11 at 17.55% and in AY 2011-12 at 5.38%. It is a settled law that principles of res judicata is not applicable in the income tax proceeding, similarly it is also settled legal view that consistency must be followed if there is no variation in the facts qua earlier or subsequent years. Therefore, in order to avoid the possibility of revenue leakage 6%, would meet the end of justice. Similar view was adopted by this combination, wherein the beneficiary of such purchases has shown very meagre GP. Therefore, we modify the order of ld. CIT(A) and restrict the addition of impugned/bogus purchases to the extent of 6%.Appeal of assessee for AY 2009-10 is partly allowed.
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