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TMI Blog2024 (8) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... . - Shri Pavan Kumar Gadale, Judicial Member And Smt. Renu Jauhri, Accountant Member For the Appellant : Shri Madhur Aggarwal For the Respondent : Shri Krishnakumar ORDER PER RENU JAUHRI [A.M.] :- These cross appeals are filed by the assessee and the revenue against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai- 32/National Faceless Appeal Centre, Delhi [hereinafter referred to as CIT(A) ] dated 15.04.2024 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as Act ] for Assessment Year [A.Y.] 2012-13. 2. The grounds of appeal raised by the assessee are as under: 1. On the facts and circumstances of the case as well as in Law, the Learned Assessing Officer has grossly erred in re-opening assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts that in such bogus transactions of purchase are not affected for commercial purpose but to create artificial gains and complete the cycle of circular trading with a view to evade taxes. 3. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) has erred in restricting the addition to Rs. 180,07,506/-(i.e 25% of the bogus purchases of Rs. 720,30,027/-) made u/s. 69C of the IT Act, 1961 being unexplained purchases without appreciating that the statement recorded of Shri Rajendra Jain and his associates has confirmed that accommodation entries provided to assessee . 4. This appeal is being filed as it is covered under the exception provided in CBDT's Circular No.05/2024 dated 15.03.2024. 4. Brief facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount. 7. We have heard the rival submissions. Ld. AR pointed out that in assessee s own case for AY 2011-12 as well as for AY 2014-15 rate of 3% has been applied on alleged bogus purchases by the AO. In this regard, submissions were made during the course of assessment proceedings but the same have been disregarded by the AO. Relevant portion of the assessment order is reproduced below: 3. ............................considering the facts or the case, If your honour is still contemplating addition, what can be taxed is only the profit not the whole of the sales. Attention is also invited to completed Assessments for A.Y. 2014-15 . . 2011- 12 where on similar facts for some of the same parties addition was restricted to 3% of the alleged bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the margin earned by the assessee to indulge into such transaction. The reason, why this margin looks practical is that most of the traders In the market actually operate at this level of margin in the open market. In fact, this fact was also Identified in the Report of the Task Group constituted by Department of Commerce in 2013, in which the margin in diamond trading was accepted to be in the range between 1 to 3%. Hence, the margin for a petty dealer in the market would not be more than 3%, which is the same margin that is now being adopted for purchases made from such dealers by assessee and for which the bills are procured from the Bhanwarlal Jain group concerns. Accordingly, the profit margin embedded in these transactions is t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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