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6.7 The AO in para 8 to 8.2 discussed the issue of bogus purchases and investigation in the case of parties covered under search proceedings and noted that parties such as Sh. Aman and Sh. Bijendar carried out manufacturing of lead alloy/ingots.

6.8 At the end, out of 13 parties identified, the AO finally considered only 9 parties as bogus and adopted average rate of 3.27 % for disallowance. The basis of 3.27% was stated to be the price difference between invoiced and without invoiced material sold by M/s Bindal Smelting Pvt. Ltd. Here, it is pertinent to mention that M/s Bindal Smelting is an independent entity and the finding in that case cannot be borrowed that too where search has taken place in the case of appellant. The addition should have been based on cogent material found during the course of search u/s 132 of the Act.