TMI Blog2022 (7) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... ies to various beneficiaries, and assessee was one of such beneficiary, the Assessing Officer was justified in re-opening assessment. No merit in the submission raised by assessee. Thus, Ground No.1 raised by assessee is dismissed. Addition of 25% on account of disputed / bogus purchases shown by assessee from Daksh Diamonds - We find that neither the books of account of assessee were rejected nor sale of assessee was doubted by Assessing Officer. And the assessing officer made the disallowance @ 25% of purchase shown from Daksh Diamonds on the basis of information of investigation wing. CIT(A) confirmed the action of AO, without giving any specific finding. We find that the assessee is in the business of cut and polish diamonds and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to as the Act ) vide order dated 27.11.2018. The assessee has raised the following grounds of appeal:- 1. Issue of notice u/s 148 and reopening of the assessment is bad in law and fact and not within the ambit of the provision of the I.T Act 1961. The learned AO recorded reason u/s 147 of I.T Act 1961 for reopening giving reference to the statement of one Shri Bhanvarlal Jain one of the partners M/s Daksh Diamond and also recorded statement of facts are different in respect of Yoour Honour s Petition facts of case. (This will be discussed elaborately in the written submission of the time of hearing) 2.Unverified purchase The learned CIT(A) has erred in sustaining addition of Rs.10,55,541/- being 25% of purchase cost of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 03.10.2013, wherein investigation team found incriminating and seized various documents and busted a racket of bogus entries provider through web of benami concerns. The statement of Shri Bhanwarlal Jain and his associates were recorded, wherein it was revealed that there are managing various entity for providing bogus investment entry of sale and purchase of different kind of rough and polished diamond and other entries. Shri Bhanwarlal Jain was managing various bogus entries which were provided bogus entry without actual delivery of goods. The assessee was one of the beneficiaries who have shown purchase from Daksh Diamonds, the entity managed by Shri Bhanwarlal Jain. The assessee has shown purchased of Rs.42.22 lakhs from entity ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of assessee. 4. On appeal before Ld. CIT(A), the assessee has challenged the validity of quantum addition only. The assessee in its submission submitted that they are in the business of import and export of cut and polished diamond. The assessee made purchased from Daksh Diamond in US dollar and that purchase is genuine. The assessee furnished complete evidence. To support the transaction the assessee filed purchase bills, invoice and payment made in US dollar, ledger for verification of transaction was furnished. Though, no specific grounds of appeal challenging the validity of re-assessment was raised, yet the Ld. CIT(A) examined the validity of re-opening on the submissions of the assessee and held that in the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of alleged bogus purchase, which is challenged in the ground No.2, the ld. AR for the assessee submits that assessee is a trader and the addition made by Assessing Officer is excessive. The turnover of assessee is more than Rs. 21 crores and assessee has shown gross profit at 3.123%, which is fairly good enough in the business of assessee. The ld. AR for the assessee submits that a token disallowance @ 2 or 3% of the disputed purchases may be made to avoid the protracted litigation, though the entire purchases shown by the assessee is genuine. 8. On the other hand, Ld. Sr. DR for the Revenue submits that the lower authorities have made reasonable disallowance @ 25% of purchase shown from hawala dealers. The entire purchases shown from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of co-ordinate Bench in the case of Vijay Proteins Ltd. (supra). We find that neither the books of account of assessee were rejected nor sale of assessee was doubted by Assessing Officer. And the assessing officer made the disallowance @ 25% of purchase shown from Daksh Diamonds on the basis of information of investigation wing. The ld. CIT(A) confirmed the action of Assessing Officer, without giving any specific finding. We find that the assessee is in the business of cut and polish diamonds and the disallowances confirmed by the lower authorities are on excessive side in the business of assessee. We are of the view that when there is allegation of bogus purchases against the assessee and the assessee claimed that the transaction is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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