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TMI Blog2019 (2) TMI 1690X X X X Extracts X X X X X X X X Extracts X X X X ..... re one and the same. Under these facts, it is difficult to take different view from the view already taken by the Co-ordinate Bench. Further, Tribunal had taken a consistent view in case of alleged bogus purchases and depending upon the facts of each case has directed the AO to estimate profit percentage of 5 to 12.5% on alleged bogus purchases - profit percentage applied by the Ld. CIT(A) on alleged bogus purchases appears to be less and hence direct the AO to consistent with view taken by the Co-ordinate Bench, we adopt 12.5% net profit on alleged bogus purchases.- Appeal filed by the Revenue is partly allowed. - ITA No. 990/Mum/2018 - - - Dated:- 27-2-2019 - Shri MAHAVIR SINGH, Judicial Member And Shri G. MANJUNATHA, Accountant Member For the Appellant : Shri Vijay Kumar Jaiswal For the Respondent : Shri Bharat Kumar ORDER Per G. Manjunatha, (Accountant Member) This appeal filed by the Revenue is directed against the order of the Ld. CIT(A)-37, Mumbai, dated 07/12/2017 and it pertains to AY 2008-09. The Revenue has raised following grounds of appeal:- 1. On the facts and in the circumstances of the case an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s associates. During the course of search, Rajendra Jain Group had admitted that they were indulged in issuing bogus bills without their being any business activity. Based on the said information, the case has been reopened u/s 147 of the Act and issued notice u/s 148 of the Act. In response to notice u/s 148 of the Act, the assessee filed letter dated 16/04/2015 and submitted that return of income filed on 09/09/2008 for AY 2008-09 may be treated as return filed in response to notice u/s 148 of the Act. Thereafter, notice u/s 143(2) and 142(1) of the Act, along with questionnaire were issued. In response to notice, the Ld. AR of the assessee, filed various details as called for. In order to verify the genuineness of transaction, the AO issued notices u/s 133(6) of the Act to all the parties, for which except one party, none have replied filing details called for by the AO. In respect of three parties, postal authorities returned notice with remark not claimed. During the assessment proceedings, the AO called upon the assessee to explain as to why purchase from the above parties shall not be treated as unexplained expenditure u/s 69C of the Act in view of the specific information r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roup for diamond industry, after considering the BAP scheme, recommended presumptive tax for net profit calculated 2% of trading activity and 3% for manufacturing activity or @ 2.5% across the board. It is also ascertained that the operating profit in case of diamond trading for computation of ALP by the TP wing is consistently in the region of around 1.75% to 3%. In view of the same considering the profit margin in this sector i.e. around 2 to 3 percent and the taxes saved is around 1% I am of the considered opinion that if the addition is sustained to the extent of 30/0 of the purchases made, as the profit element embedded in such purchases from the parties belonging to the Rajendra Jain Group concerns, that will meet the ends of justice. In view of the same, I direct the AO to restrict the addition @3% of the purchases made from Aadi Impex, M/s.Vitrang Jewels, M/s.Avi Exports and M/s.Sparsh Exports Pvt.Ltd. of ₹ 86,80,048/-. This ground is partly allowed. 5. The Ld. DR, submitted that the Ld. CIT(A) was erred in scaled down the addition made towards alleged bogus purchases from firm controlled by Rajendra Jain Group without appreciating the fact that Rajendra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts brought out by the AO in the context of DGIT(Inv.) report and also statement of Shri Rajendra Jain, during the course of search proceedings, in his case were not fully controverted by the assessee with any evidence. It is also an admitted fact that the parties from whom purchase of materials stated to have been made by the assessee are not responded to notice issued u/s133(6) by the AO during the assessment proceedings. Under these factual background, if you examine the claim of the assessee that purchases are supported by proper tax invoice and payment for such purchase have been made through banking channel, one undoubted fact emerging from the above is that although the assessee has filed certain basic evidence including purchase bills and payments, but failed to file further evidence to rebut the findings of the AO in the light of report of DGIT(Inv.) which was further supported by the statement of Rajendra Jain during search proceedings in his case. We further noticed that Shri Rajendra Jain has admitted in the statement recorded u/s 132(4) of the Act that he is indulged in providing accommodation entries without there being any business activity. Therefore, we are of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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