TaxTMI 
TaxTMI 
2014 (2) TMI 571
X X X X Extracts X X X X
X X X X Extracts X X X X
....ring and export of polished diamonds from rough diamonds. During the year under consideration, the assessee showed gross profit of Rs 1.19 crore on turnover of Rs 18.38 crores and gross profit of Rs 1.14 crore on turnover of Rs 18.25 crore for the immediately preceding year. The gross profit ratio for the year under consideration worked out to 6.51% and the same for the preceding year worked out to 6.26%. The Assessing Officer observed that the assessee had shown labour charges of Rs 1,39,09,673/- at the rate of Rs 393/- per carat whereas in the earlier year, the same was Rs 361/- per carat. He observed that the following concerns engaged in similar business paid labour charges in the range of Rs 250/- to Rs 300/- per carat: Sr.No. Name o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the assessee cannot be regarded as defective on the ground of non-maintenance of quality-wise details of diamonds. He further observed that the disallowance was made mainly on the ground that some other entities were making payment of labour charges at the rate lower than that of the assessee. The Ld. CIT(A) opined that disallowance cannot be made barely on the basis of this reason as it is not necessary that entire factors affecting the business of assessee and that of the entities relied upon by the Assessing Officer are identical. He noted that the Assessing Officer himself accepts the fact that diamond labour is paid different rates for different jobs and the rate varies as per size, weight, and quality etc. of rough diamond. Regardin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....order of the Ld. CIT(A) in deleting the addition and dismissed the appeal of the Revenue. It was the submission of the Ld. AR that as the facts of the case in the present year of appeal are identical to the facts of the case of the assessee for Assessment Year 2005-06, following the same, the appeal of the Revenue deserves to be dismissed. 7. We have heard the rival submissions, perused the orders of lower authorities and the material available on record. In the instant case, the assessee is engaged in the business of export and manufacturing of polished diamonds from rough diamonds. The Assessing Officer observed that the assessee has paid labour charges for polishing of diamonds at the rate of Rs 393/- per carat whereas in the earlier ye....
X X X X Extracts X X X X
X X X X Extracts X X X X
....confirmed the order of the Ld. CIT(A) deleting the addition made on similar facts and grounds by observing as under: "6. I have considered the reasons given by Assessing Officer and also the submissions of appellant. I have also gone through the decision of Honourable ITAT Ahmedabad Bench in the case of M/s Dhami Brothers & M/s Pankaj Diamond relied upon by the learned AR. After carefully going through the same, it is seen that it has been clearly held by Honourable ITAT Ahmedabad Bench that book results cannot be regarded as defective on the ground of non- maintenance of quality wise details of diamonds. It is further seen that disallowance has been made mainly on the ground that some other entities are making payment of labour charges at....