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2020 (3) TMI 281 - AT - Income TaxBogus purchases - AO received information from DGIT (Investigation), who in turn received information from Sales Tax Department, Mumbai that the assessee has made purchases from hawala parties, as listed in hawala dealers by the Maharashtra Sales Tax Department who are providing bogus bills of purchase - HELD THAT:- CIT(A) upheld the order of AO on the ground that the assessee could not substantiate the consumption of materials in manufacturing process. We also note that assessee has filed purchase bills, challan for receipt of goods, details of payment through cheque and bank statement etc. The notice 133(6) the Act was also issued but the supplier relied that due to raid by the department the information could not be furnished We cannot sustain the order of CIT(A) upholding the order of AO wherein 100% bogus purchases were added. In our opinion, a percentage can be applied to bring to tax the profit element in the said purchases. Accordingly we direct the AO to apply rate of 12.50% on the said purchases. - Appeal of the assessee is partly allowed.
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