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2018 (12) TMI 973 - AT - Income TaxAddition to bogus purchases - information from the Sales Tax Department of Maharashtra that the said concern, M/s. Amar Enterprise figures in the list of hawala dealers - Held that:- While the orders of the authorities below reveal that the purchases were not properly substantiated by the assessee, but it also reflects the plea of the assessee that the material corresponding to such invoices has been used by the assessee for business - corresponding sales of the products have not been doubted. As case of Simit P. Sheth (2013 (10) TMI 1028 - GUJARAT HIGH COURT) comes into play whereby it has been inferred that under such circumstances, the reasonable inference is that assessee had indeed effected the purchases, but not from the stated concern. In this case, assessee had canvassed that the impugned purchases was of essential raw materials which was consumed in the business of offset and plate processing. What is required to be added to the returned income is the savings effected by the assessee by making such purchases not from the stated concern, but from undeclared source in the grey market. Considering these aspects, in our view, it would be in the fitness of things that 12.5% of the impugned purchases be considered as an addition required to be made to the returned income in order to plug the leakage of revenue - thus restrict the addition to 12.5% of the impugned purchases and delete the balance. - decided partly in favour of assessee.
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