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2019 (1) TMI 1922 - AT - Income TaxEstimation of income - bogus purchases in case of a diamond trader - CIT(A) sustaining addition of 3% of bogus purchase as against 8% done by the A.O. - HELD THAT:- Sales have not been doubted. No defect in purchase documentation has been noted. In identical case, in the case of M/s. Choron Diamond (I) Pvt. Ltd. [2017 (11) TMI 184 - ITAT MUMBAI] Sales have not been doubted. No defect in purchase documentation has been noted.Coordinate Bench while sustaining the order of the Ld.CIT(A) also considered the report of Task Group for Diamond Sector submitted to Department of Commerce, wherein it was submitted that net profit in diamond manufacturing is in the range of 1.5% to 4.5% and in trading it is in the range of 1% to 3% The Task Group for Diamond Sector submitted to Department of Commerce also suggests that the profit margin in trading of goods is in the range of 1% to 3%. In the circumstance we direct the Assessing Officer to estimate the profit element from the purchases treated as non-genuine at the rate of 2% uniformly for all the Assessment Years 2007-08, 2008-09, 2010-11, 2011-12 and 2013-14 As in the present case the ld. CIT(A) on similar reasoning has directed 3% disallowance. The A.O. himself has made similar disallowance in the subsequent years. In our considered opinion, there is no infirmity in the same. Accordingly, we uphold the same.
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