TMI Blog2021 (4) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... t rate was fixed at 8% which was subsequently revised to 6% as per CBDT Instruction No.2/2008 dated 22-02-2008. The task group has stated that the rate of 6% so fixed is nowhere reflective of the reality in the diamond manufacturing and trading industry, which operates on profit margin in the range of 1% to 3% only. Also in case of ITO vs Dhawal Exim P Ltd [ 2018 (11) TMI 1840 - ITAT MUMBAI] assessee, the first appellate authority himself has sustained addition @3% of the non genuine purchases under more or less identical facts and circumstances - thus disallowance at 3% of the alleged non genuine purchases would be fair and reasonable. Accordingly, direct the assessing officer to do so. Ground is partly allowed. - I.T.A. No.5002/M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of Shri Bhanwarlal Jain group. On the basis of such information, the assessing officer reopened the assessment under section 147 of the Act. In course of assessment proceedings, the assessing officer called upon the assessee to prove the genuineness of purchases made from the aforesaid two parties. As noted by the assessing officer, in response to the query raised, assessee furnished copies of purchase invoices and corresponding sale invoices, copies of bank statements showing payments made to the two parties towards purchases etc. The Assessing Officer, however, was not convinced with the evidences produced. Relying upon the information received during the search and seizure operation conducted in case of Shri Bhanwarlal Jain and grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stock and corresponding sales have been effected. Finally,learned Counsel submitted, disallowance made at 5% is high and unreasonable; hence, should be restricted to 3% of the alleged non genuine purchases. In this context, he drew our attention to the report of the Task Group for Diamond Sector under the Ministry of Commerce and Industry, Department of Commerce, Government of India, New Delhi. Further, he relied upon the decision of the co-ordinate bench in case of ITO vs Dhaval Exim P Ltd ITA No.6711/Mum/2016 6159/Mum/2016 to emphasise that disallowance at 3% would be reasonable. 5. The learned Departmental Representative strongly relying upon the observations of the assessing officer and learned Commissioner (Appeals) submitted, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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