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2023 (3) TMI 969 - AT - Income TaxEstimation of income - Non-genuine purchases - HELD THAT:- As per the report of the Task Force for Diamond Sector constituted by the Ministry of Commerce and Industry after considering the BAP (Benign Assessment Procedure) scheme, the Task Force recommended that the net profit prevailing in the Diamond Industry engaged in the business of trading would be in the range of 1% - 3% and those engaged in the business of manufacturing would be in the range of 1.5% - 4.5%. In the present case, there is no dispute regarding the fact that the assessee is also in the business of trading in diamonds. Considering the same, we deem it appropriate to restrict the disallowance to 3% being the estimated gross profit of the bogus purchases. As the assessee claims that it has already offered to tax gross profit of 2.75% on the aforesaid transaction. Therefore, we direct the AO to verify the aforesaid submission and grant relief to the assessee to the extent the gross profit, on the non-genuine purchases, has already been offered to tax by the assessee.Appeal by the assessee is partly allowed.
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