2023 (2) TMI 1435

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..... 123/Mum/2021 as lead case and its finding will be applied mutatis mutandis to the other 3 cross objections filed by the assessee. C.O. No. 123/Mum/2021 2. The fact in brief is that appeals of the assessee were dismissed by the ITAT vide 1652 to 1655/Mum/2020 vide order dated 06.12.2021 on the reasoning that revenue appeals were dismissed on account of low tax effect, therefore, assessee's cross objection were not maintainable. Thereafter the assessee filed miscellaneous applications vide M.A. No. 125 to 128/Mum/2022 on 06.12.2021 for not adjudicating the cross objection filed by the assessee on merit. Vide ITAT order M.A. No. 125 to 128/Mum/2022 dated 22.12.2022 the miscellaneous applications filed by the assessee were allowed after....

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....w.s. 147 of the Act on the basis of information received from the search action carried out in the case of Rajendra Jain group on 03.10.2013 that they were engaged in providing accommodation entries of bogus purchases from various concerns of Rajendra Jain group. The assessing officer found that assessee has shown purchases from group concern pertaining to Rajendra Jain group during the financial year 2006-07 relevant to assessment year 2007-08 as under: Sr. No. Name of the hawala parties Bill Amount 1. M/s Avi Exports 1,36,47,966/- 2. M/s Moulimani Impex Pvt. Ltd. 3,86,30,601/- 3. M/s Sun Diam 4,98,90,059/- 4. M/s Vitrag Jewels 2,09,14,864/-   Total 12,30,83,490/- 3. On query th....

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....ly allowed the appeal of the assessee. 5. Heard both the sides and perused the material on record. Without reiterating the facts as elaborated above in this order it is undisputed fact that assessing officer had accepted the fact that assessee has made corresponding sales against the impugned purchases made from the group concern of Rajendra Jain group. During the course of assessment the assessee submitted the copies of ledger account, copy of bank statement, purchase invoices and evidences of payment made by account payee cheques etc. It is evident from the findings of the lower authorities that the genuineness of the sales made in corresponding of purchases were not doubted. In fact the assessing officer has categorically pointed out ....

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....t at 5.40%, 5.24%, 5.08% and 5.08% respectively in the different assessment year. From these facts the assessee has demonstrated that they have already reported higher profit on the purchase transaction made from the group concern of Rajendra Jain as against gross profit rate adopted by the task force formed by the Government of India (Ministry of Commerce and Industry, Department of Commerce) for diamond industry. 7. Considering the above facts and the percentage of gross profit already shown by the assessee after following the decision of ITAT as referred above we consider it appropriate to restrict the addition to the extent of 2% of the impugned purchases. Accordingly, we restrict disallowance to the extent of 2% of such purchases. T....