Bogus purchase additions: 8% estimate set aside and matter remitted for fresh adjudication under later precedent.

Alleged bogus purchase additions cannot be reduced mechanically to 8% merely by following an earlier year's order when later binding precedent may require a different approach. The appellate authority's percentage-based estimate was set aside because it relied on the prior Tribunal decision without independently reconsidering the issue in light of subsequent judicial developments and the relevant year's facts. The matter was restored for fresh adjudication in accordance with law after giving the assessee an opportunity of hearing.

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Issues: Whether the addition on account of alleged bogus purchases could be restricted to 8% or whether the matter required fresh adjudication in view of later binding precedent.

Analysis: The dispute concerned an addition arising from purchases treated as non-genuine. The appellate authority had restricted the disallowance to 8% by following the Tribunal's earlier decision in the assessee's own case for a different assessment year. The Revenue relied on later judicial developments, including the stricter approach reflected in subsequent binding precedent, and contended that the earlier percentage-based estimation could not be applied mechanically without examining whether the facts for the relevant year were identical and whether the later legal position altered the outcome. The impugned order was found to have followed the earlier Tribunal direction without an independent reconsideration of the issue in the light of the later authorities.

Conclusion: The restriction of the addition to 8% was set aside and the issue was restored to the appellate authority for fresh adjudication in accordance with law after giving the assessee an opportunity of hearing.

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