TMI Blog2017 (10) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... % estimated by the Assessing Officer. Thus, we uphold the order of the Ld.CIT(A) for all these Assessment Years i.e. 2010-11, 2011-12 and 2012-13. - Decided against assessee. - ITA NO.5799/MUM/2016, ITA NO.5800/MUM/2016 And ITA NO.5801/MUM/2016 - - - Dated:- 28-9-2017 - SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR, HON'BLE ACCOUNTANT MEMBER For The Assessee : Shri Vijay Biyani For The Department : Ms. Arju Garodia ORDER PER C.N. PRASAD (JM) 1. These three appeals are filed by the assessee against various orders of the learned Commissioner of Income Tax (Appeals)-21, Mumbai for the Assessment Years 2010-11, 2011-12 and 2012-13 arising out of the Assessment Orders passed u/s. 143(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iers for verification assessee failed to produce them before the Assessing Officer. 4. The Assessing Officer not convinced with the submissions of the assessee and since the suppliers were not produced and no delivery challans were furnished to prove that delivery of goods have been actually made by the alleged suppliers to the assessee and since the Directors of the supplier companies have deposed on oath that they were merely dummy Directors and use to sign different papers for nominal consideration given by Shri Bhanwarlal Jain and they were unware of the place of operation, books of accounts and the business carried out by the concerns in which they are only dummy directors/proprietors, rejected the submissions of the assessee that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iding only accommodation entries and there were no real transactions. Ld.CIT(A) also accepted the action of the Assessing Officer in disallowing certain percentage of impugned purchases in view of the decision of the Hon'ble Gujarat High Court in the case of CIT v. Bholanath Polyfab Pvt. Ltd. [355 ITR 290] and CIT v. Simit P. Seth [356 ITR 451]. Further, the Ld.CIT(A) taking note of the report of the task group for Diamond Sector Submitted to Department of Commerce wherein the net profit margin in diamond manufacturing and trading was reported in the range of 1.5% to 4.5% and 1% to 3% respectively, he concluded that, as the assessee is trader in polished diamonds margin from such impugned purchases at 4% is appropriate. 7. Learned Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecords and based on the depositions of the suppliers that they have provided only accommodation bills, the Assessing Officer has rightly concluded that the assessee has obtained only bogus bills and assessee might have purchased goods in gray market. The Assessing Officer estimated the Gross Profit Margin on such purchases at 8% which the Ld.CIT(A) reduced to 4% taking note of the report of the Task Group for Diamond Sector submitted to the Department of Commerce observing as under: - 4.2. The A.O called upon the appellant to establish the genuineness of the purchases. The AO noted that the concerns from whom purchases were shown did not have documents to prove the delivery of goods of the appellant. The concerns from whom purchases we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rts made against each purchases. Stock book reflecting the purchases were also produced. Ledger accounts in respect of the purchases and copy of invoices for the purchase and corresponding sales were also furnished. It was contended that the initial burden on the appellant to prove the genuineness of the purchases was fulfilled. The A.O has not conducted any enquiry as regards the alleged bogus transactions of the appellant. No defects have been found in the books. The copies of the material based on which the A.O. concluded that the purchases are not genuine was not provided to the appellant. Once the sales (primarily exports) are not doubted, no addition can be made by doubting the purchases. As regards the absence of delivery challan, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Simit P. Sheth (2013) 219 Taxman 85 (Gu]. 4.5. It is noted that there is nothing distinguishable to identify the sales as corresponding to the purchases. However, the submission that the margin on trading in polished diamonds is low is supported by the report of the Task Group for Diamond Sector submitted to Department of Commerce in which it was reported that net profit in diamond manufacturing is in the range of 1.5 to 4.5% and in trading in the range of 1 to 3%. The appellants business is of trading in polished diamonds in respect of the impugned purchases. Thus, a margin of 4% is considered to be appropriate. 10. On a careful consideration of the totality of facts and circumstances and the findings of the Ld.CIT(A), we do ..... X X X X Extracts X X X X X X X X Extracts X X X X
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