2022 (8) TMI 847

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....essment year (AY) 2009-10. Revenue in its appeal has raised the following grounds of appeal:- "1.Whether, on facts and in law the ld. CIT(A) was justified in partly allowing the appeal of the assessee and estimating disallowance at Rs. 4,12,095/- @ 5% of Rs. 82,41,914/- despite of the fact the AO has made the addition of Rs. 82,41,914/-. 2. Whether, on the facts and in law the ld. CIT(A) was justified in partly allowing the appeal of the assessee upon the decision in the case of M/s Myank Diamonds Pvt. Ltd without considering the facts that M/s Mayank Diamonds Pvt. Ltd. was only a trader of diamonds whereas the assessee was manufacturer and exporter of polished diamond. 3. Whether, on the facts and in law the ld. ....

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....ng of cut and polish diamond, filed its return of income declaring total income of Rs. 20,92,370/- on 01.09.2009 for Assessment Year 2009-10. The case was reopened on the basis of information received from DGIT (Investigation) Mumbai. In the information received from Investigation Wing, Mumbai it was informed that a search and seizure action was carried out by Investigation wing-Mumbai on Bhanwarlal Jain Group on 03.10.2013, which resulted in collection of evidence that Bhanwarlal Jain, his sons Rajesh and Manish were operating certain benami concerns in the name of their employees and staff for providing bogus accommodation entries of unsecured loans, sale and purchase of different kinds of material. The statement of Bhanwarlal Jain was re....

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....e of purchase and sales of rough and polished diamond, copy of original challan of receipt of delivery of diamond, original jhangad of the purchase in question, books of accounts for verification. The Assessing Officer recorded that in response to the same, assessee furnished copy of bills dated 05.02.2009, ledger account, confirmation of M/s Kriya Impex Pvt. Ltd. and computer print-out of polish diamond. On verification of details, the Assessing Officer recorded that assessee was not maintaining. Quantity and quality was detailed and rough and polished diamond. The original challan of jhagad was produced. Carat wise diamonds are manufactured and not furnished. The assessee was asked to show cause as to why the entire purchases should not b....

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...., the revenue has filed present appeal. On service of notice, assessee has filed its cross objection. On perusal of grounds of appeal raised by revenue, we find that tax effect involved in the present appeal is less than the monetary limit of tax effect of Rs. 50,00,000/- as determined by CBDT in its Circular No. 17/2019. 4. The ld. CIT-Sr. DR fairly submits that tax effect in the present appeal is less than the monetary limit of Rs. 50,00,000/-. Therefore, the appeal of the revenue is not maintainable. The ld. CIT-Sr. DR for the revenue, further submits that she also furnished working of tax effect vide application dated 24.09.2021. Considering the admitted position that tax effect involved in the present case is less than the monetary ....

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.... The assessee has proved one to one correlation between the impugned purchase and the corresponding sales and the assessee has earned margin of Rs. 20,59,550/- @ 24.98% on sales realization of the said purchases which is very reasonable. The ld. AR of the assessee submits that similar set off fact, Surat Bench of Tribunal in Sh. Pankaj Kanwarlal Jain vs. ITO in ITA No. 269/SRT/2017 dated 27.08.2019 deleted the entire addition instead of sustaining 5% of the alleged bogus purchases on the principle of estimated profit in bogus purchases. The ld. CIT(A) confirmed the addition to the extent of 5% mainly on relying upon the decision of Mayank Diamonds Pvt. Ltd. (Supra). The ld. AR of the assessee also relied upon the decision of Mumbai Tribunal....

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....AR of the assessee are that the assessee has shown Gross Profit @ 22.10% which is high in the line of business of the assessee. We do not find any merit in the submission of the assessee as no such submission was raised either before Assessing Officer or before ld. CIT(A). Before Assessing Officer no such fact and figure was furnished. The Assessing Officer while rejecting the books of accounts clearly held that no details of quantity and quality wise and rough and polished diamond was furnished. Further, details of carat wise diamond manufactured and quality details were not furnished. The assessee for the first time has come with these fact and figure. No such one to one correlation of purchase and export was prove before Assessing Office....