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2019 (3) TMI 2055 - AT - Income TaxRevision u/s 263 - assessee was subjected to reassessment proceedings u/s 147 - estimation of income on bogus purchases - assessee was saddled with estimated addition of 12.5% by AO - Pr.CIT noted that the assessee was not maintaining any quantitative register and could not substantiate the delivery of the material and therefore, the full disallowance was to be made as against 12.5% estimated by AO keeping in view the decision Hon’ble Apex Court rendered in N.K.Proteins Ltd [2017 (1) TMI 1090 - SC ORDER] - HELD THAT:- We find that the co-ordinate bench of this Tribunal in the cited case of Rajal Enterprises [2018 (10) TMI 2028 - ITAT MUMBAI] when the assessee was able to link the purchases with corresponding sales, the logical conclusion which one can arrived at is, the assessee might not have purchased goods from the declared source but from some other parties. In that event, only the profit element embedded in the bogus purchases can be considered for addition. Therefore, the decision of the AO to restrict the addition to 10% of the bogus purchases is in tune with the consistent view of the tribunal and different high courts in similar nature of cases. That being the case, in our view, the exercise of power under section.263 of the Act in the facts of the present case is invalid. Accordingly, the impugned order passed by the leaned PCIT under section 263 of the Act deserves to be quashed. Decided in favour of assessee.
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