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TMI Blog2025 (1) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... led for in the said conclusion and findings of the Tribunal in the present appeal. X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the case in law, the Hon'ble ITAT has justified in restricting the addition to 6% without considering the judgment of Calcutta High Court of in the case of PCIT us. Premlata Tekriwal (143 taxmann.com 173) involving similar issue of purchase of bogus concern to suppress profits wherein the court held that "since it was established that expenditure was unexplained/bogus, entire amount of bogus expenditure was to be added to income of Assessee". >5. "Whether on the facts and circumstances of the case in law, the Hon'ble tribunal is right in deleting the addition made by the AO on account of bogus purchase even though in the case of Mayank Diamonds Pvt Ltd .(2014(11) TMI 812), the Hon'ble High Court has directed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e department, a nongenuine entity, not engaged in actual business of any kind. >3.2 While the Assessing Officer made the addition as above, in the appeal preferred by the assessee, the Commissioner of Income Tax (Appeals), passed an order dated 10.05.2023, restricting the addition to 6% of the purchases amounting to Rs. 66,33,087/-. >3.3 It appears that cross appeals came to be preferred before the Income Tax Appellate Tribunal against the decision of the Appellate Commissioner. The Income Tax Officer preferred Appeal No. 458 of 2023, whereas the assessee preferred Appeal No. 389 of 2023. The Tribunal restricted the addition to 6% of the disputed purchases shown by the assessee. >4. Learned advocate for the appellant submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity would suffice in the bill. But there is bound to be difference in uncut and cut diamonds? What difference was there in unpolished and uncut. diamonds Vs. polished one? Why was it not clear from the face of the invoice? >4.2 Was it not the duty of appellant to show that the trade was as per normal commercial prudence or does the appellant want that I.T. Department should blindly accept the bills and trade which even on the face appear to be bogus, made up contrived. >4.3 As a result, given the facts and the wholistic perspective as available, the contention of the appellant can not be accepted. With reference to CBDT circular, mentioned in the last Notice, the income is estimated at 6% of the turnover, which is the base at which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 declared the GP @ 0.78%. It is settled law that under Income-tax, the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to 389 & 458/SRT/2023/A.Y.2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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