The assessee was alleged to have obtained bogus purchase bills of ₹3.33 crore from concerns linked to Shri Pravin Kumar Jain. The AO held that the assessee failed to produce parties for cross-examination, disregarded retraction affidavit of Shri Jain, and made addition of 12.5% of purchases as non-genuine. CIT(A), noting that assessee had filed purchase bills, bank statements, stock records, sales bills, MCA documents of suppliers and declared GP higher than past average, restricted the addition to 4% relying on prevailing VAT rate in Maharashtra. On appeal by the Revenue, the Tribunal noted that the AO had not found any defect in books or disproved evidences produced. Sales were accepted. The reliance placed by Revenue on PCIT v. Kanak Impex (India) Ltd. [2025] 474 ITR 175 / 172 taxmann.com 283 (Bom)( HC )  to support 100% addition was held distinguishable since in Kanak Impex the assessee had not participated in reassessment proceedings and purchases remained unproved, unlike in the present case where assessee furnished complete evidences. The Tribunal relied upon CIT v. Nikunj Eximp Enterprises Pvt. Ltd. v. CIT [2015] 372 ITR 619 (Bom)( HC) wherein it was held that when books of account are not rejected, sales are accepted, and payments are through banking channels, purchases cannot be disallowed merely on suspicion for non-production of parties. Accordingly, the restriction of addition to 4% by CIT(A) was upheld. Appeal of revenue was dismissed .(  ITA No. 580/Mum/2025 dt. 30.05.2025.) (AY.  2007-08 )