Estimation of income - bogus purchases - The Tribunal addressed...

Estimation of income - bogus purchases - The Tribunal addressed various issues, including the validity of the reopening of assessment, the genuineness of purchases, calculation of the profit element, and determination of the gross profit rate. It found that the purchases were reconciled with sales, indicating their genuineness. Relying on judicial precedents, the Tribunal concluded that only the profit element of the alleged bogus purchases should be assessed. It accepted the industry-standard gross profit rate of 3% for diamond trading and modified the CIT(A)'s order accordingly, restricting the addition to the profit element.