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TMI Blog2024 (5) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the aforesaid documents filed by the appellant. This apart, the AO has accepted the similar explanation of the appellant assessee for the assessment year 2018-19 after issuing the similar show-cause notices with the draft of rejection of books of accounts. Also undisputed fact that the revenue department has been accepting assessee firm's method of accounting in earlier years as well. It is also pertinent to mention that the AO has not brought on record any other comparable case. The assessee has maintained quantitative details of diamonds. The facts of the present case are similar to the facts of M/s Nevils Gems [ 015 (12) TMI 989 - ITAT AHMEDABAD ] We, therefore hold that the qualitative details of stock of diamonds piece wise, color wise, data wise and carat wise are not required to be maintained under the Act and rule as referred by the coordinate bench of this tribunal. The facts of Kanchwala Gems [ 2006 (12) TMI 83 - SUPREME COURT ] are in respect of bogus purchases and non maintenance of quantitative details of stock. The facts of Oopal Diamonds [ 2022 (11) TMI 620 - ITAT MUMBAI ] are related to the purchases of diamonds from certain tainted dealers, thus t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable, and thereby estimating the Gross Profit for the above year 1.2] The learned CIT(Appeals) failed to appreciate the explanations/submissions furnished by the Appellant. The appellant has explained as to why the details called for by the learned Assessing Officer could not be furnished due to non- availability of Inward/Outward data in the manner as asked for by the learned Assessing Officer 1.3.] It is submitted that the lower authorities have resorted to the rejection of books of accounts and estimation of gross profit without going into the data/details/documents furnished by the Appellant for Sales, Purchases and inventories which are available on records. 1.4.] The learned CIT(Appeals) failed to appreciate that the rejection of books of account and estimation of Gross Profit cannot be sustained as there is no defect in the books of accounts maintained as alleged by the learned Assessing Officer and upheld by the CIT(Appeals). 1.5.] It is submitted that the lower authorities erred in invoking the provisions of Section 145(3) of the Act on the basis that the Appellant failed to furnish details of diamond stock piece-wise, carat-wise and grade-wise. It is submitted that the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sake of convenience. 8. Learned representative for the appellant assessee has argued that assessee s books of accounts have been audited Under Section 44AB of the Act. There is no requirement for maintenance of register on the basis of quality of stock of each and every diamond. It is sufficient to maintain stock of diamond on the basis of quantity mentioned in carat. He has referred order dated 30th November, 2015 passed in ITA no. 3257/Ahd/2011 Dy. CIT Vs M/s Nevil Gems in support of his argument. 9. Per contra learned DR has supported the impugned order and referred Kachwala Gems V Joint Commissioner of Income tax, Jaipur [2007] 158 Taxman 71 (SC) and Oopal Diamond vs. ACIT-19(2) Mumbai [2022] 197 ITD 827/144 Taxmann.com 184 (Mumbai- Trib) in support of impugned order. 10. The relevant paras 7 and 8 of the aforesaid order dated 30th November, 2015 passed by the coordinate Ahmedabad Bench of the Tribunal read as under: 7. ..The assessee who is engaged in the business of manufacturing of polished diamonds has maintained regular books of accounts, financial statements, are duly audited under section 44AB of the Act, complete quantity details have been maintained and have been re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve details in respect of diamonds purchased and sold by it as well as for processing of diamond. There is no adverse comment from the auditor that the profit cannot be computed from the books of accounts maintained by the assessee. In our opinion, the qualitative details of each piece of diamond are not necessary for computation of the income of the assessee. Income of the assessee can be very well computed on the basis of accounts already maintained by the assessee. In view of the above, we are unable to agree with the Assessing Officer that there is defect in the system of method of accounting of the assessee which requires rejection of the book results under Section 145(3) of the Act and estimation of the GP. 11. In the facts of the present case in hand, assessee has filed stock book of polished diamonds-date wise and carat wise. Details of sale/purchase and the reconciliation with trading account and sample invoices for agency commission along with the invoices in respect of import of the purchases, have also been filed with the assessee's paper book from page 92 to 170. Audit report also does not disclose any defect in such maintenance of books of accounts by the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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