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TMI Blog2021 (12) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... et of facts, therefore, these appeals are taken up together for adjudication and are disposed of by this common order. For the sake of convenience, these appeals are taken up in seriatim of assessment years. ITA No. 7049/Mum/2019, AY- 2010-11 (Department's Appeal) ITA No. 7743/Mum/2019, AY-2010-11 (Assessee's Appeal) 2. Ms. Dinkle Hariya appearing on behalf of the assessee submitted that the assessee is engaged in trading and export of polished diamonds and diamond jewellery. The assessment for AY 2010-11 in the case of assessee was reopened on the ground that the assessee has indulged in obtaining accommodation entries from concern belonging to Bhanwarlal Jain group. The Assessing Officer (AO) held that the assessee has obtained bogus p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommodation entries. The Counsel prayed for deleting entire addition on account of bogus purchases. Without prejudice to primary prayer, the ld. Counsel submitted that the assessee has declared Gross Profit of 6.57% in the impugned AY, estimation of GP margin by CIT(A) at 12.5% on alleged bogus purchases is very much on the higher side. The Task Group formed by the Government of India for Diamond sector has estimated net profit ranging between 1 % to 3% on trading of Diamonds and 1.5% to 4.5% on manufacturing of diamond jewellery. The ld. Counsel prayed for restricting addition to 2% of the alleged bogus purchases. To support her arguments the Counsel placed reliance on following decisions: i. Choron Diamond India Pvt. Ltd. vs. ACIT in ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of disallowance to 2% of alleged bogus purchases. During assessment proceedings the assessee furnished various documents to prove genuineness of the purchases. However, the AO and the CIT(A) after examining the documents furnished by the assessee have concluded that the assessee has obtained bogus purchase bills from suspicious dealer. It is observed that although the dealer from whom the assessee has made alleged bogus purchases has confirmed the sale transactions but no document in the form of stock inward register, delivery receipt, etc. has been furnished by the assessee to prove trail of goods. The assessee has failed to discharge its onus in proving authenticity of purchase transactions. Therefore, the primary contention of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is restricted to 2%. In the result, ground no. 3.1 & 3.2 of appeal are partly allowed. 7. The assessee in ground no.1 of the appeal has assailed the order of CIT(A) on violation of principles of natural justice and in ground no.2, the assessee has assailed re-opening of assessment. No submissions were made by ld. Counsel for the assessee on ground no.1 & 2. Without commenting on the issues raised in the said grounds at this stage, these grounds are left open for adjudication, if required at later stage. 8. The appeal of the assessee is thus, partly allowed. 9. The Revenue in appeal has raised solitary issue assailing the findings of CIT(A) in reducing addition on account of bogus purchases from 25% to 12.5%. Since, in appeal by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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