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2020 (8) TMI 62 - AT - Income TaxBogus purchases - on the information from Sales Tax Department the AO had added the entire purchases in assessee’s income - assessee has paid VAT on the goods so purchased - HELD THAT:- Looking to the gross profit ratio declared by the assessee it is clear that the assessee has shown very reasonable gross profit ratio in all the years under consideration. There are various judicial pronouncements to the fact that in case gross profit shown by the assessee is 15% or more no addition is warranted. In the instant case the assessee has declared gross profit of 16.47% in A.Y. 2009-10, accordingly I direct the AO not to make any addition. However, in assessment years 2010-11 and 2011-12 the gross profit shown by the assessee is 12.75% and 14.88%, which are lower than 15%. Accordingly direct the AO to make addition to the extent of shortfall in gross profit in these two years as compared to the gross profit of 15% i.e. 2.25% in A.Y. 2010-1 & 0.12@ in A.Y. 2011-12. - Decided partly in favour of assessee.
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