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TMI Blog2018 (9) TMI 1235X X X X Extracts X X X X X X X X Extracts X X X X ..... dered view that in addition to the gross profit already declared by the assessee in assessment year 2012-13 and 2013-14 further addition of 3% in the GP rate on the bogus purchases is ordered to be made. The AO is directed to restrict the addition of GP to 3% of the disputed purchases over and above the GP rate already declared by the Assessee. - ITA Nos. 5697 & 5698/Del/2017 - - - Dated:- 31-8-2018 - Sh. N.K. Billaiya, Accountant Member And Sh. Kuldip Singh, Judicial Member For the Assessee : Sh. C.S. Anand, Adv. For the Department : Sh. D.S. Rawat, Sr.DR ORDER PER KULDIP SINGH, J.M.: Since common questions of law and facts have been raised in both the interconnected appeals, the same are being disposed of by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry for adjudication of the controversy at end are the case of the assessee was reopened under section 147 of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for assessment year 2012-13 on the ground that a search and seizure operation was carried out in the case of Sh. Bhanwar Lal Jain group on 03.10.2013. Sh. Bhanwar Lal Jain admitted that he has provided accommodation entries to various beneficiaries and the assessee has also procured bogus purchases of ₹ 31,94,022/- (Rs.15,79,812, dt. 06.01.2012 and ₹ 16,14,210/-, dt. 10.03.2012). The notice under Section 142(1) of the Act, dated 10.02.2016 issued and assessee was called upon to produce persons, who came and sold goods in Delhi, to produce Karigar who have man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the addition by dismissing the same. Ground No.1 of ITA No. 5697/Del/2017 (for AY: 2012-13) 4. Ground no.1 is general in nature, hence needs no separate adjudication. Ground No.2 of ITA No.5697/Del/2017 (for AY: 2012-13) 5. This ground has not been pressed by the learned Authorized Representative for the assessee who has preferred to argue the case on merits. Ground No.3 of ITA No. 5697/Del/2017 (for AY:2012-13) and Ground No.1 of ITA No.5698/Del/2017 (for AY: 2013-14). 6. Undisputedly, the assessee has shown GP rate @ 18.18% and 21.88% for assessment years 2012-13 2013-14 respectively. It is also not in dispute that the diamonds have been purchased by the assessee for manufacturing the jewelery but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional profit was because the AO thought that instruction no. 2 of 2008 dated 22.02.2008 will be applicable to this case. However, from a plain reading of instruction no. 2 of 2008 it is seen that this instruction was meant to be applicable for assessments made during FY 2008-09. Clearly, the assessment of the appellant has not been made during FY 2008-09. Further, the clause E of the said instruction states the rate of profit as a percentage of turnover would be reviewed annually on the basis revenue generation and results of scrutiny assessment, searches and surveys made during the year . Thus, the benign assessment procedure (BAP) or the percentage mentioned in the instruction no. 2 of 2008 cannot be applied across the board in all cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at are not fully and properly explained. Addition of ₹ 20,78,470/- is accordingly confirmed out of an addition of ₹ 41,56,941/- and the balance is deleted. Grounds of appeal No. 1 is therefore partly allowed. 9. When we examine the assessment order, it has come on record that the AO has applied 25% uniform GP on the said bogus purchases of ₹ 31,94,022/- for assessment year 2012-13 and ₹ 5,13,400/- for assessment year 2013- 14, ignoring the fact that on the said bogus purchases the assessee has already declared the GP rate at 18.82% and 21.88% for assessment years 2012-13 and 2013-14 respectively and, at the most, difference between 18.82% and 21.88% should have been estimated and added to assessee s income. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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