The assessee is  engaged in the business of trading in resins and chemicals.

The Assessing Officer held that  had purchases from six parties who were declared by the Sales Tax Department as ingenuine dealers opined that the purchases in question did not have nexus with the corresponding sales and accordingly added the entire amount of purchases to the assessee’s income under section 69C on the ground that there being unexplained payments qua the purchases in question. The Commissioner (Appeals) estimated the gross profit at 12.5 per cent on the purhcases made by the assessee. As the assessee had shown gross profit at 4.74 per cent in the assessment year in question, the Commissioner (Appeals) reduced the same from 12.5 per cent and confirmed the addition to the extent of 7.76 per cent. The Tribunal, on appeals filed by both the revenue and assessee, observed that the Commissioner (Appeals) had rightly estimated the profit in regard to the purchases at 12.5 per cent. However, he was not correct in reducing the gross profit already returned by the assessee at 4.74 per cent out of 12.5 per cent for the reason that the gross profit returned by the assessee related to the sales made by it and did not have link to the purchases for which it might have procured bills by making savings in VAT, etc. the Tribunal partly allowed the appeal of the revenue and directed the Assessing Officer to estimate the income at 12.5 per cent on the purchases so made. It rejected the assessee’s challenge to the order passed by the Commissioner (Appeals). On appeal the Court held that in absence of a cohesive and coordinated approach of Assessing Officer with Sales Tax Authorities, it would be difficult to come to a concrete conclusion in regard to such purchase being bogus merely on basis of general information so as to discard such expenditure and add same to assessee’s income. Order of Tribunal is affirmed. No substantial question of law arose out of order of Tribunal. (AY. 2009-10, 2010-11)