Bogus purchase additions require fair re-estimation where sales are accepted and purchase genuineness remains unproved.

Where sales turnover is accepted but the genuineness of purchases is not conclusively proved, an addition based on alleged bogus purchases may need fair re-estimation rather than automatic confirmation of the earlier profit rate. In these facts, the 8% profit estimate was considered on the higher side, so the matter was remanded to the Assessing Officer for fresh adjudication in accordance with the governing principle for bogus purchase cases. The disputed addition was thus kept open and not finally affirmed.

---

---

Issues: Whether the addition sustained by estimating profit at 8% on alleged bogus purchases was justified, or required fresh adjudication.

Analysis: The assessee had not conclusively proved the genuineness of the purchases, while the sales turnover stood accepted. The estimated profit margin on the disputed purchases was found to be on the higher side in the facts of the business. The matter was therefore sent back to the Assessing Officer for fresh decision in accordance with the governing principle for bogus purchase cases.

Conclusion: The addition was not finally affirmed and the issue was remanded to the Assessing Officer for fresh adjudication.

Final Conclusion: The assessee obtained partial relief, with the disputed addition kept open for reconsideration by the Assessing Officer.

Ratio Decidendi: Where sales are accepted but the genuineness of purchases is not conclusively proved, the addition on account of alleged bogus purchases may require fresh estimation on a fair basis rather than automatic confirmation of the earlier percentage estimate.

---