TaxTMI 
TaxTMI 
2024 (5) TMI 698
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....t, [Hereinafter referred to as "Act"] related to the assessment year 2017-18. 2. The brief facts under appeal state that the appellant assessee, a firm carrying of business of trading and manufacturing of diamonds, filed its return of income on 27th September, 2017 declaring total income of Rs. 4,47,66,180/-. The assessee's case was selected for scrutiny under CASS. In response to the statutory notices, assessee submitted the details of the stock book of polished diamonds date wise, sale/purchase based on the quantity in carat with opening and closing stock quantity wise. The response of the assessee could not satisfy the Assessing Officer to his expectation in respect of the details of stock of diamond piece wise, color wise, date wise ....
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....tories which are available on records. 1.4.] The learned CIT(Appeals) failed to appreciate that the rejection of books of account and estimation of Gross Profit cannot be sustained as there is no defect in the books of accounts maintained as alleged by the learned Assessing Officer and upheld by the CIT(Appeals). 1.5.] It is submitted that the lower authorities erred in invoking the provisions of Section 145(3) of the Act on the basis that the Appellant failed to furnish details of diamond stock piece-wise, carat-wise and grade-wise. It is submitted that the lower Authorities failed to appreciate that neither there is any requirement to maintain stock records to fetch such information nor the Appellant could compile the sa....
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....ecords and heard representatives for both the parties. 6. On the basis of the aforesaid grounds, the following points emerge out for consideration under appeal: 1. Whether the addition of Rs. 1,75,56,107/- in the total income of the assessee for the Assessment Year 2017-18 by the Assessing Officer, merely on the basis of estimation for want of details of assessee firm's diamond stock - piece wise, color wise, data wise and carat wise, and grade wise, is not legally tenable? 2. Whether the maintenance of assessee's books of accounts for the relevant Assessment Year 2017-18, is in accordance with the provision of the Act? 7. Both the aforesaid issues, covering almost all the grounds of appeal, are inter-related, Hence,....
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.... declared by assessee in the immediately preceding year. The only reason for which the Assessing Officer has rejected the books of accounts is for non- maintenance of quality wise and piecewise detail of polished diamonds and has prepared vouchers for payment of labour charges. We find that similar issue came up before the Tribunal in the case of in the case of M/s Dhami Brothers vs. ACIT, in in ITA Assessing Officer 2309/Ahd/2008, wherein the Tribunal has decided the issue vide its order dated 6.8.2010 by observing as under :- 7. .......................... 8. From the above, it is evident that if the Assessing Officer is not satisfied about the correctness or the completeness of the accounts of the assessee, he may make a....
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....amonds purchased and sold by it as well as for processing of diamond. There is no adverse comment from the auditor that the profit cannot be computed from the books of accounts maintained by the assessee. In our opinion, the qualitative details of each piece of diamond are not necessary for computation of the income of the assessee. Income of the assessee can be very well computed on the basis of accounts already maintained by the assessee. In view of the above, we are unable to agree with the Assessing Officer that there is defect in the system of method of accounting of the assessee which requires rejection of the book results under Section 145(3) of the Act and estimation of the GP." 11. In the facts of the present case in hand, asses....