The AO has made addition in the assessee’s case on the basis of information received from the sales tax authorities that the assessee had made purchases from various suspicious parties, i.e. bogus purchases. AO made addition by applying GP Rate of 12.% of the bogus purchases amount. ITAT reduced the addition by applying GP Rate of 5% in AY 2009-10 and AY 2011-12. Further, adhoc addition made by AO, i.e. addition made on estimate basis, cannot be treated as concealment of income so as to warrant penalty under section 271(1)(c). (AY. 2009-10 to  2011-12)