9911796707
TMI Blog2021 (4) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... gold, cut and polished diamond, manufacture of diamond studded jewellery and export and local sales of such jewellery. For the assessment year under dispute, assessee filed its return of income on 10-09-2011 declaring total income ofRs. 11,50,130/-. The return of income so filed was initially processed under section 143(1) of the Act. Subsequently, the assessing officer received information from the investigation wing that in course of search and seizure operations conducted in case of Shri Bhanwarlal Jain and his group concerns on 03-10-2013, it was found that they were providing accommodation entries in the form of unsecured loans, bogus purchase bills, etc through number of entities within the group. It was further found that during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f purchase is not doubted, the assessing officer observed that in such cases only the profit element embedded in the transaction would be brought to tax. Thus, ultimately, he estimated the profit element at 5% of the alleged non genuine purchases and added back an amount ofRs. 14,66,144/- to the total income of the assessee. Though, the assessee contested the aforesaid disallowance/addition, however, learned Commissioner (Appeals) upheld it. 4. Learned Authorised Representative submitted, purely on the basis of information obtained in case of a third party the assessing officer has treated the purchases as non genuine. He submitted, to prove the genuineness of purchases, the assessee had furnished cogent evidences which were rejected witho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the disputed purchases. Therefore, the assessing officer has ultimately disallowed 5% of the alleged non genuine purchases. Now, the issue before me is only confined to the reasonableness of the disallowance made at 5% of the non genuine purchases. On a perusal of the report of the Task Group for Diamond Sector under the aegis of Ministry of Commerce and Industry, Department of Commerce, Government of India, New Delhi in the year 2013, it is noticed that as per the benign assessment procedure (BAP) introduced in the budget presented in 2007-08, the threshold net profit rate was fixed at 8% which was subsequently revised to 6% as per CBDT Instruction No.2/2008 dated 22-02-2008. Considering the aforesaid, the task group has stated that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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