2025 (8) TMI 1647

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....as "ld. AO"). 2. Though the assessee has raised several grounds before us, the only effective issue to be decided in this appeal in Ground Nos. 1 to 12 are as to whether the ld NFAC was justified in confirming the addition made on account of purchases as unexplained expenditure u/s 69C of the Act in the facts and circumstances of the instant case. 3. I have heard the rival submissions and perused the material available on record. The assessee, an individual, filed his return of income for assessment year 2019-20 on 24.10.2019 declaring total income of Rs.7,69,120/-. The assessee is engaged in the business of trading of raw material for CPVC pipe industries since 2016 under the name and style of "Deepjyoti Enterprises". The case of the ass....

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....isturb the profit element of 12.5% considered by the ld AO. He proceeded to adopt the gross profit shown by the assessee for the year under consideration, immediately preceding previous year and immediately succeeding financial year. The average of such gross profit was 2.54%. The ld CIT(A) observed that assessee had indeed made purchase from the grey market and the savings in the grey market was estimated to be 0.5% by ld CIT(A). Accordingly, the total profit element embedded in the value of purchase was worked out at 3.04% (average of GP 2.54% + grey market profit of 0.5%). This profit percentage of 3.04% was applied on the value of disputed purchase from M/s. RK Polymers at Rs.2,09,39,760/- and addition of Rs.6,36,568/- was sustained by ....