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Section 40(A)(3)

This query is : Resolved 
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(Querist)
20 November 2008 Dear All

In an search case the some undisclosed purchases and sale was found and special audit was called for and in the audit report it is mentioned that there are Nil cases falling u/s 40(A)(3. But the learned ITO while drafting the order invock the provision of 40(A)(3)and disallowed 20% of purchases and made the addition and he had also made the addition by applying G.P Rate of Sales.
Is he Justified
Please reply with relevant Case Laws
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Deepak Agrawal

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Deepak Agrawal (Expert)
20 November 2008 NO
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CA RAMESH KUMAR AHUJA

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CA RAMESH KUMAR AHUJA (Expert)
21 November 2008 No, there can not be two additions for undisclosed purchases.
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