2026 (5) TMI 618

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....rder. For the purpose of clarity and convenience, facts of ITA No. 675/2025 are however, being taken into consideration. 2. The respondent/assessee deals in diamonds, which he imports from various countries in accordance with the provision of Customs Act, 1962 and other relevant law. During the course of assessment proceedings, the Assessing Officer (AO) found that the assessee had issued 6,358 bills of cash sales (each being less than Rs.2 lacs in value), amounting to total of Rs. 97,12,70,670/-. This being the position, the AO was of the view that since the source of purchase was the cash received from these sales, the purchases amounting to Rs. 97,13,70,670/-, (being the amount of cash sales) was not properly explained and made additi....

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....on mere assumption and conjuncture. 7. Having observed so, the Tribunal has also expressed its concern that when the AO had found the purchases to be genuine, how could he take the sale to be bogus without rejecting the books of account. 8. Mr. Guarav Gupta, learned Senior Standing Counsel for the appellants submitted that the Tribunal and the CIT(A) have erred in deleting the addition made by the AO, simply because the purchases were found to be through proper banking channels and supported by documents. He argued that it is an admitted case of the AO that purchases were genuine but what he had disallowed is the expenditure of the purchase itself, because source of purchase was unexplained. Explaining the arguments, Mr. Gaurav Gupta ....