During year, Assessing Officer received information from sales-tax authorities and came to know that assessee had made bogus purchases from hawala parties .The AO has  added entire amount to income of assessee . However, Tribunal restricted quantum addition at 12.5 per cent of bogus purchases .  Pursuant to Tribunal’s order penalty proceedings were initiated and penalty was levied . CIT(A) affirmed the order of the AO. On appeal the assessee contended that since quantum addition was estimated, no penalty should be levied on estimation of profit  . Tribunal held that  since there were bogus purchases and only profit element had been added which meant that assessee had concealed income to that extent in garb of purchases which turned out to be bogus.  Penalty order is affirmed .(AY. 2009 -10)