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2020 (1) TMI 74 - ITAT MUMBAIAdditions towards alleged bogus purchases - CIT(A) reduced the rate to 3% from @ 12.50% as made by the AO - Assessee sought further relief - HELD THAT:- In this case, the assessee is into the business of diamond trading. The profit element in diamond trading is around 2 to 3% depending upon nature of trade. Even, the BEP had recommended profit percentage of 2% in case of trading and 3% for manufacturers. AO, considering the nature of business of the assessee had estimated 12.50% profit, whereas the CIT(A) has scaled down estimation of profit to 3% on total alleged bogus purchase. Although, both authorities have taken different rate of profit for estimation of income from alleged bogus purchase, but no one could support said rate of gross profit with necessary evidences or any comparable cases. On the other hand, the assessee had also failed to file any comparable cases to support its arguments for lessor gross profit rate. Therefore,CIT(A) has taken one of the possible method for estimation of profit to settle dispute between the parties and also considering nature of industry and BEP rate has scaled down profit estimated by the AO to 3% on alleged bogus purchases. CIT(A) has rightly scaled down addition made by the AO from 12.50% to 3% profit on alleged bogus purchases. Hence, we are inclined to uphold order of the ld. CIT(A) and dismiss appeal filed by the assessee.
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