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2023 (1) TMI 655 - AT - Income TaxBogus purchases - AO got information from Maharashtra Sales Tax Department about unearthing racket more than 1935 Hawala dealers and 33,700 beneficiaries - HELD THAT:- The assail is to the making of addition(s) on the basis of bogus purchase bills received by the assessee(s) as accommodation entries from hawala dealers. It is seen that the issue of bogus purchases has come up for consideration before in Mohommad Haji Adam & Co. [2019 (2) TMI 1632 - BOMBAY HIGH COURT] and others, the Hon’ble jurisdictional High Court has held that no ad hoc addition for bogus purchases should be made. It laid down that the addition should be made to the extent of difference between the gross profit rate on genuine purchases and gross profit rate on hawala purchases. Respectfully following the precedent, we set-aside the impugned orders and remit the matter to the file of the respective AOs for applying the ratio laid down by the Hon’ble jurisdictional High Court in the above noted case and then recompute the amount of additions, if any, after allowing a reasonable opportunity of hearing to the assessee. All the appeals are allowed for statistical purposes.
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