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2020 (4) TMI 565 - AT - Income TaxReopening of assessment u/s 147 - Bogus purchases - HELD THAT:- There is sufficient materials in the possession of the AO to form reasonable belief of escapement of income in form of information from DGIT(Inv), which was further supported by sales tax report on suspicious dealers, which is sufficient to reopen assessment and hence, we reject legal ground taken by the assessee. Addition towards bogus purchases - Estimation of profit- AO has made 100% additions towards alleged bogus purchases as assessee is one of the beneficiary of accommodation entries of bogus purchase bills issued by Hawala dealers - CIT(A) has restricted addition to 25% profit - HELD THAT:- In a situation where purchase is made from alleged hawala dealers, various High Courts and Tribunals had considered an identical issue in light of investigation carried out by the Sales Tax Department and held that in case purchases claims to have made from alleged hawala dealers, only profit element embedded in those purchases needs to be taxed, but not total purchase from those parties. In the case of CIT vs Simith P.Sheth [2013 (10) TMI 1028 - GUJARAT HIGH COURT] considered a similar issue and held that at the time of estimation of profit from alleged bogus purchases no uniform yardsticks could be adopted, but it depends upon facts of each case - considering the nature of business of the assessee both authorities have considered different rate of profit for addition towards alleged bogus purchase, but no one could support said addition with necessary evidences or any comparable cases - we direct the ld. AO to estimate 12.50% profit on alleged bogus purchases. - Decided partly in favour of assessee.
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