2019 (12) TMI 1617

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....of assessment and estimation of gross profit on the alleged bogus purchases. 3. Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in business of manufacturing, import, export and trading of cut and polished and rough diamonds. The A.O. got information from the Investigation Wing of the Department regarding assessee having obtaining accommodation bill with regard to purchases of diamonds. Accordingly, the case was reopened for the A.Y. 2011-12 and thereafter the addition was made by the A.O. by estimating profit @ 3% on polished diamonds and 5% on rough diamonds. By the impugned order, the ld. CIT(A) confirmed the addition by estimating profit at 3% in polished and rough diamonds both, a....

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....o the GP in normal purchases. 6. On the other hand, the ld DR has relied on the order of the A.O. an contended that during the course of search at Bhanwar Lal group, it was found that the assessee has taken accommodation bills of purchases without taking delivery. 7. We have considered the rival contentions and carefully gone through the orders of the authorities below and found from the record that the assessee is engaged in manufacturing, export and trading of diamonds. We also found that before the A.O., the assessee has filed quantitative details of purchases, stock register reflecting goods received and processing and manufacturing thereof and corresponding sales with individual invoice with respect to alleged bogus purchases. Th....

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....the same rate of other genuine purchases. The decision of the Gujarat High Court in the case of N.K. Industries Ltd.. (supra) cannot be applied without reference to the facts. In fact in paragraph 8 of the same Judgment the Court held and observed as under- So far as the question regarding addition of Rs.3,70,78,125/- as gross profit on sales of Rs.37.08 Crores made by the Assessing Officer despite the fact that the said sales had admittedly been recorded in the regular books during Financial Year 1997-98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6% gross profit is taken into account, the corresponding cost price is required to be deducted a....