Comparative Gross Profit comparison limits tax additions; only the positive GP difference is assessable, rest deleted.

Whether disputed purchases were bogus was resolved by assessing the genuineness through corroborative third party documents (purchase bills, export and shipping bills, bank realizations, stock registers), and by distinguishing this factual matrix from ex parte or evidence absent precedents; the Tribunal applied the Comparative Gross Profit principle to limit additions to the positive difference between gross profit on undisputed and disputed purchases, resulting in deletion of most disallowance and sustaining an addition of Rs. 8,075 in favour of the assessee.

---

---

Issues: Whether purchases treated as bogus and fully disallowed by the assessing officer can be sustained, and if not, what is the correct quantum of addition to be made having regard to corroborative documentary evidence and the rule on comparing gross profit on disputed and undisputed purchases.

Analysis: The Tribunal examined whether the assessee had substantively proved the genuineness of the impugned purchases through third party documentary evidence including purchase bills, export invoices, shipping bills, bank realizations and stock registers. The Tribunal considered the factual distinction between this case and authorities where assessments were completed ex parte or where no evidence was produced. It applied the principle from the jurisdictional High Court decision restricting addition to the positive difference between gross profit on undisputed purchases and that on disputed purchases by analysing the assessee's worked out gross profit percentages for disputed and undisputed purchases and relevant sector profit data.

Conclusion: The Tribunal held that the assessing officer and the CIT(A) were not justified in disallowing the entire alleged purchases. The addition is restricted to the difference in gross profit as computed by the assessee, and an addition of Rs. 8,075 is sustained while the balance disallowance is deleted; appeal is accordingly partly allowed in favour of the assessee.

---