2021 (12) TMI 1193

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....order(s) passed by the Assessing Officer under section 143(3) r.w.s 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'),dated 23.12.2016and 21.03.2016 respectively. 2.Since, the issues involved in all the appeals are common and identical except variance of amount; therefore, these appeals have been heard together and are being disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated inITA No.263/SRT/2018, for assessment year 2014-15, have been taken into consideration for deciding the above appeals en masse. 3. Ground of appeal raised by the Revenue in 'lead' case ITA No.263/SRT/2019 for A.Y. 2014-15 are as follows:- "(i) On the facts and circumstances o....

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....1% and net profit of Rs. 5,67,166/- @ 0.03% on total turnover of Rs. 207,93,27,931/-. During the year under consideration, assessee has furnished details of party-wise from whom diamonds have been purchased. On verification of the same, it wasnoticed by the assessing officer that following concerns are belongs to Shri Gautam Jain group and assessee Bhagchand Jain HUF and received accommodation entries, which are reproduced below:- Sr.No Name of the entity of Shri Gautam Jain Amount (in Rs) 1 M/s Kishna Diam 2,12,60,256/- 2 M/s Parshwanath Gems Pvt. Ltd. 2,06,40,285/-   Total 4,19,00,541/- During the search proceedings statement on oath were recorded of dummy directors / partners / proprietors of c....

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....s partly allowed the appeal of the assessee. The Id. CIT(A) following his own decision in case of Gangani Impex for A.Y. 2013-14 in appeal No. CAS-3/512/2C15-16 dated 24.11.2016 which was further followed by decision of ITAT in case of Mayank Diamond Pvt, Ltd reported in 2014(11) TMI 812 (Guj) in Tax Appeal No. 200 of 2003 dated 07.11.2004and confirmed the disallowance of 5% ofthe impugned purchases. The Ld. CIT(A) has discussed the various decision of ITAT, High Court and Supreme Court in his decision and restricted the disallowance of bogus purchases @5% of such purchases and granted relief to the assessee to the tune of Rs. 3,98,05,514/-. 7. Aggrieved by the order of ld CIT(A), the Revenue is in appeal before us. 8.We have heard bo....

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.... additions to 5% of GP. We have seen that in Mayank Diamonds Pvt. Ltd (supra), the assessee had declared GP @ 1.03% on turnover of Rs. 1.86 Crore. The disputed transaction in the said case was Rs. 1.68 Crore. However, in the present case the assessee has declared the GP @ 0.78%. It is settled law that under Income-tax, the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to prevent the possibility of revenue leakage. Therefore, considering overall facts and circumstances of the present case, we are of the view that disallowances @ 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. ....