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2018 (9) TMI 1235 - AT - Income TaxAddition of bogus purchases - G.P. rate estimation - assessee is engaged in the business of trading and export of diamonds - Held that:- Keeping in view the fact that no discrepancies have been found in the account books maintained by the assessee in the due course of business; that AO has not disputed the purchase of diamonds but only disputed that the bogus bills were procured to avoid the payment of VAT and the fact that profit margin in the diamond business is around 2 to 3% and as has been held by the coordinate bench of Tribunal in the case of M/s. Naitik Gems (2017 (11) TMI 1708 - ITAT MUMBAI), we are of the considered view that in addition to the gross profit already declared by the assessee in assessment year 2012-13 and 2013-14 further addition of 3% in the GP rate on the bogus purchases is ordered to be made. The AO is directed to restrict the addition of GP to 3% of the disputed purchases over and above the GP rate already declared by the Assessee.
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