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2018 (6) TMI 97 - AT - Income TaxDisallowance of purchases - guinity of claim - payment to the parties were made by account payee cheques - Held that:- We find merit in the contention of the learned AR that the purchases in the present case are not bogus and the parties involved are not declared as hawala parties by the sales tax department of Government of Maharashtra. Even if the purchases are not genuine or are bogus the entire addition to the income of the assessee is uncalled for and wrong. The purpose of the statute is only to tax the income of the assessee, which is only a fraction of the total purchases. Under these circumstances we are of the considered view that the total addition to the income of the assessee on account of purchases from three parties is not justified and cannot be sustained. We, therefore, deem it fit and proper to apply a gross profit rate of 4% and set aside the order of the CIT(A) - Decided in favour of assessee in part.
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