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TMI Blog2023 (3) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Appeal No. 1152 of 2017 in respect of Assessment Year 2007-2008. 3. The facts are that the assessee is engaged in the business of import and export and trading of cut of polished and ruff diamonds. The assessment under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act) was completed against the assessee on 10.3.2009. Total income was determined to be Rs. 6,50,490/-. The assessment was subsequently reopened on the basis of the information received from the investigation wing, Mumbai. In the assessment undertaken under section 143(3) read with section 147 of the Act, the income was determined to be Rs. 4,40,50,830/-, which was after making addition of Rs. 4,34,00,343/- 3.1 The addition was made on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3/- ignoring the fact that these purchases are sham transactions fabricated through bogus paper concerns of Bhanwarlal Jain Group companies which were engaged in providing accommodation entries? (ii) Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in estimating the addition in respect of bogus purchases at the rate of 6% of such purchases by relying on the decision of Hon'ble Gujarat High Court in the case of Mayank Diamonds Pvt. Ltd. (2014) (11) TMI 812 as against the direction of the Hon'ble High Court in that case to make addition at the rate of 5% of the total turnover. 4. Learned advocate for the appellant submitted that the said Jain group was engaged in providing accommodation entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance of 100% of purchases cannot be justified. Also as held above, the appellant would nave indulged in above practice in order to get some benefit. And it is this benefit derived by the appellant that need to be taxed. What would be the magnitude of benefit derived by the appellant is the mute question. In the appellant's case, it is seen that GP rate shown is 0.78%". 5.1 The final view was expressed in para 10.10, "Following the above judicial pronouncements and views taken by Ld. CIT(A) & AOS in a few identical cases. In a couple of identical cases, where the GP shown by the appellants is more than 5%, I have confirmed the disallowance of the impugned purchases to the extent of 5% of the impugned purchases. However in the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the search action on Bhanwarlal Jain no stock of goods/material was found to the investigation party. Bhanwarlal Jain while filing return of income has offered commission income (entry provider). Before us, the Ld. CIT-DR for the revenue vehemently submitted that the ratio of decision of Hon'ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. We find that in Mayank Diamonds the Hon'ble High Court restricted the additions to 5% of GP. We have seen that in Mayank Diamonds P Ltd (supra), the assessee had declared GP @ 1.03% on turnover of Rs 1.86 Crore. The disputed transaction in the said case was Rs. 1.68 Crore. However, in the present case the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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