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Issues involved: Cross appeals by the assessee and the department for assessment years 2005-2006 and 2006-2007 regarding addition made on purchases from M/s.R.R.Patel Trading Corporation.
Assessment Year 2005-2006: The assessee challenged the assessment of total income and addition on purchases from M/s.R.R.Patel Trading Corporation. The CIT(A) reduced the addition to 25% of the purchase amount, leading to appeals by both parties. The Tribunal referred to a similar case and restricted the addition to 20% of the total purchases from the same party, "RRP." The Tribunal found the assessee had proven sales to reputable parties and upheld the 20% addition, partly allowing the assessee's appeal and dismissing the Revenue's grounds. Assessment Year 2006-2007: Similar issues arose in this assessment year, with the CIT(A) reducing the addition on purchases from M/s.R.R.Patel Trading Corporation. The Tribunal, following the precedent set in the previous year, sustained the addition at 20% of the total purchases from "RRP." The Tribunal noted the quantitative tally provided by the assessee and the sales made to reputable parties, ultimately partly allowing the assessee's appeals and dismissing the Revenue's grounds. The Tribunal's decision was based on the factual matrix and legal principles, distinguishing the case from the precedent cited by the Revenue. The Tribunal held that adding 20% of the purchase amount as income in the assessee's hands was appropriate, ensuring justice in both assessment years. Consequently, the appeals of the assessee for both years were partly allowed, while the Revenue's appeals were dismissed.
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