The Assessing Officer treated purchases from three suppliers as bogus since two suppliers did not respond to notices under section 133(6) and one denied the transactions. The Tribunal held that although the assessee failed to conclusively establish the genuineness of the purchases, the corresponding sales were accepted and the books of account had not been rejected. Therefore, only the profit element embedded in the alleged non-genuine purchases could be brought to tax and not the entire purchase value.  The Tribunal found that the assessee had disclosed better gross profit than in earlier years and was engaged in the business of wholesale supply of building material and civil contracting. Considering the overall facts, it held that a gross profit rate of 5 per cent. on the disputed purchases would adequately cover the possible inflation of expenditure. The addition was accordingly sustained only as a trading addition, and no separate addition under section 69C survived.  (AY. 2021-22).