Appeal Details
Counselvise Citation
[2022] 103 COUNSELVISE.COM (IT) 9744 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 7 month(s) 10 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
25-10-2022
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
C
Next Hearing Date
11-10-2022
Assessment Year
2013-2014
Appeal Filed On
15-03-2020
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL, ‘C‘ BENCH MUMBAI BEFORE: SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI M.BALAGANESH, ACCOUNTANT MEMBER ITA No.1499/Mum/2020 (Asse ssment Year :2010-11) ITA No.1500/Mum/2020 (Asse ssment Year :2011-12) & ITA No.1501/Mum/2020 (Asse ssment Year :2013-14) M/s. Oopal Diamond Suite 2, 8 th Floor Laxmi Tower B Wing, Bandra Kurla Complex, Bandra (E) Mumbai – 400 051 Vs. ACIT-19(2), Mumbai Room No.207, Income Tax Office, Matru Mandir, Nana Chowk, Grant Road (West), Mumbai – 400 007 PAN/GIR No.AAAF01064A (Appellant) .. (Respondent) Assessee by Shri Himanshu Gandhi Revenue by Shri Prasoon Kabra Date of Hearing 12/10/2022 Date of Pronouncement 26/10/2022 आदेश / O R D E R PER M. BALAGANESH (A.M): These appeals in ITA Nos.1499/Mum/2020 to 1501/Mum/2020 for A.Yrs.2010-11, 2011-12 & 2013-14 respectively to arise out of the order by the ld. Commissioner of Income Tax (Appeals)-59, Mumbai in appeal No.CIT(A)-59,Mumbai/10723/2017-18, CIT(A)-59,Mumbai/10874/2017-18 & CIT(A)-59, Mumbai/10724/2017-18 dated 31/01/2020 (ld. CIT(A) in short) against the order of assessment passed u/s.143(3), 143(3) r.w.s. ITA No.1499/Mum/2020 to 1501/Mum/2020 M/s. Oopal Diamond 2 147 of the Income Tax Act, 1961 (hereinafter referred to as Act) dated 23/03/2016 & 25/11/2016 respectively by the ld. Asst. Commissioner of Income Tax-19(2), Mumbai (hereinafter referred to as ld. AO). Identical issues are involved in all these appeals, and hence, they are taken up together and disposed off by this common order for the sake of convenience. ITA No.1499/Mum/2020 (A.Y.2010-11) 2. The ground No.1 challenging the reopening of assessment was stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from the Bar and hence, dismissed as not pressed. 3. The assessee has also raised an additional ground challenging the validity of re-assessment on different facet which was also stated to be not pressed by the ld. AR at the time of hearing. The same is reckoned as a statement made from the Bar and hence, dismissed as not pressed. 4. The only surviving issue that needs to be adjudicated is as to whether the ld. CIT(A) was justified in confirming the disallowance made on account of non-genuine purchases by estimating the profit element at 3% thereon as against 5% estimated by the ld. AO. 4.1. We have heard rival submissions and perused the materials available on record. We find that assessee is engaged in the business of trading and manufacturing of diamonds. It is not in dispute that assessee had made purchases from certain parties who were treated as tainted ITA No.1499/Mum/2020 to 1501/Mum/2020 M/s. Oopal Diamond 3 dealers as per information gathered from the search carried out in the entities of Shri Bhawarlal Jain and Group. However, the sales made out of the purchases made from the disputed parties were not doubted by the Revenue. Accordingly, the ld. AO concluded that the assessee could have made purchases from the grey market in order to have some savings in indirect taxes and incidental profit element thereon and observed that only profit element embedded in the value of such purchases could be brought to tax in the interest of justice. Accordingly, the ld. AO estimated the profit element embedded in the value of such disputed purchases at 5% which was reduced to 3% by the ld. CIT(A). 4.2. The only issue that arises before us is as to whether the estimation on profit element made by the ld. CIT(A) at 3% is just and fair. It is pertinent to note that against the order of the ld. CIT(A), the Revenue had not preferred any appeal before us. As per the report of the Task Force for Diamond Sector constituted by the Ministry of Commerce and Industry after considering the BAP (Benign Assessment Procedure) scheme, the Task Force recommended that the net profit prevailing in the Diamond Industry engaged in the business of trading would be in the range of 1% - 3% and those engaged in the business of manufacturing would be in the range of 1.5% - 4.5%. We find that the Tribunal has been consistently taking the stand by estimating the profit element on the basis of reliance placed on the aforesaid report of the Task Force. In the instant case, the assessee is engaged in the business of both trading as well as manufacturing of diamonds. Considering the same, we find that the ld. CIT(A) was duly justified in estimating the profit percentage at 3% on which we do not deem it fit to interfere. In other words, the estimation of profit percentage at 3% by the ld. CIT(A) is just and fair and does not ITA No.1499/Mum/2020 to 1501/Mum/2020 M/s. Oopal Diamond 4 require any interference. Accordingly, the ground No.2 raised by the assessee is dismissed. 6. In the result, appeal of the assessee for A.Y.2010-11 is dismissed. ITA No.1500/Mum/2020 (A.Y.2011-12) 7. The facts and circumstances of A.Y.2010-11 are exactly identical with the facts prevailing in A.Y.2011-12 except with variance in figures. Hence, the decision rendered by us hereinabove for A.Y.2010-11 shall apply mutatis mutandis for A.Y.2011-12 also. ITA No.1501/Mum/2020 (A.Y.2013-14) 8. The only issue to be decided in this appeal is as to whether the ld. CIT(A) was justified in estimating the profit percentage embedded in the value of non-genuine purchases at 3% as against 5% estimated by the ld. AO. The facts are exactly identical to that prevailing in A.Y.2010-11 and hence, the decision rendered by us hereinabove for A.Y.2010-11 shall apply mutatis mutandis for A.Y.2013-14 also except with variance in figures. 9. In the result, all the appeals of the assessee are dismissed. Order pronounced on 26/10/2022 by way of proper mentioning in the notice board. Sd/- (VIKAS AWASTHY) Sd/- (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated 26/10/2022 KARUNA, sr.ps ITA No.1499/Mum/2020 to 1501/Mum/2020 M/s. Oopal Diamond 5 Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary / Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. The CIT(A), Mumbai. 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy//
