DCIT,CC- 5(4), MUMBAI V. DECENT DIAJEWELS PVT. LTD., MUMBAI

ITA 7389/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7635 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 24-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIJIT PATANKAR
• Keywords: Bogus purchase; Business income; Search and seizure; Additional evidence; Accommodation entries; Set aside
• Section: 143(3); 142(1); 153A; 133(6); 201; 13; 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEM BER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NOS.7080 - 7083/MUM/2018 ( ASSESSMENT YEARS: 2011-12 TO 2014-15 ) DECENT DIA JEWELS PRIVATE LIMITED FW-4010, F TOWER BHARAT DIAMOND BOURSE BANDRA KURLA COMPLEX BANDRA(E) MUMBAI-400 051 VS. DCIT,CENTRAL CIRCLE-5(4) ROOM NO.1927, 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI-400 021 PAN/GIR NO. AA DCD3620M ( APPELLANT ) .. ( RESPONDENT ) & ITA NOS.7389 - 7392/MUM/2018 ( ASSESSMENT YEARS: 2011-12 TO 2014-15 ) DCIT,CENTRAL CIRCLE-5(4) ROOM NO.1927, 19 TH FLOOR AIR INDIA BUILDING NARIMAN POINT MUMBAI-400 021 VS. DECENT DIA JEWELS PRIVATE LIMITED FW-4010, F TOWER BHARAT DIAMOND BOURSE BANDRA KURLA COMPLEX BANDRA(E) MUMBAI-400 051 PAN/GIR NO. AADCD3620M ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY NONE REVENUE BY SHRI ABHIJIT PATANKAR, CIT-DR DATE OF HEARING 20/01/2020 DATE OF PRONOUNCEMENT 29/01/2020 DECENT DIA JEWELS PVT.LTD. 2 / O R D E R PER BENCH : THESE CROSS APPEALS FILED BY THE ASSESSEE, AS WELL AS THE REVENUE ARE DIRECTED AGAINST SEPARATE, BUT IDENTICA L ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-53, MUMBAI, AL L DATED 15/10/2018 FOR THE AY 2011-12 TO 2014-15. SINCE, F ACTS ARE IDENTICAL AND ISSUES ARE COMMON, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED-OFF BY THIS CO NSOLIDATED ORDER. 2. THE ASSESSEE, AS WELL AS THE REVENUE HAVE TAKEN COMMON GROUNDS OF APPEAL IN THEIR RESPECTIVE APPEALS FILED FOR ALL ASSESSMENT YEARS. THEREFORE, FOR THE SAKE OF BREVITY GROUNDS O F APPEAL FILED BY THE ASSESSEE AS WELL AS, THE REVENUE FOR AY 2011-12 ARE REPRODUCED AS UNDER:- ITA NO.7080/MUM/2018 FOR AY 2011-12:- 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL FOR AY 2011-12:- 1. ON THE FADS AND CIRCUMSTANCES OF THE APPELLANT 'S CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN C ONFIRMING THAT THE APPELLANT HAS ENTERED INTO ACCOMMODATION TRANSACTIO NS WITH RAJENDRA JAIN GROUP, SANJAY CHAUDHARI GROUP AND DHARMI CHAN D GROUP. 2. ON THE FACTS AND CIRCUMSTANCES OF THE APPELLAN T'S CASE AND IN LAW THE LD. COMMISSIONER OF INCOME TAX. (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS. 3,08,65,565/- MADE BY THE LD. AO BE ING 5.49% ON ACCOUNT ALLEGED NON-GENUINE PURCHASES OF RS. 56,22, 14,315/-. 3. THE APPELLANT CRAVES LEAVES TO ADD TO AMEND, A LTER, MODIFY AND / OR WITHDRAW ANY OR ALL ABOVE GROUNDS OF APPEAL, EACH O F WHICH ARE WITHOUT PREJUDICE TO ONE ANOTHER. THE APPELLANT PRAYS THIS HON'BLE TRIBUNAL TO DELETE THE ADDITION/DISALLOWANCES MADE BY THE LD. ASSESSING OF FICER, WHICH IS CONFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (AP PEALS). DECENT DIA JEWELS PVT.LTD. 3 ITA NO.7389/MUM/2018 FOR AY 2011-12:- 4. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL AY 2011-12: 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCE OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN REDUCING THE NET PROFIT ON NON GENUINE PURCHASES FROM 8% DETERMINED BY THE AO TO 5.49%, WITHOUT THE ASSESSEE HAVING BROUGHT ON RECORD ANY ADDITIONAL EVIDENCE OR SUBMIS SION BEFORE THE LD.CIT(A) WHILE DETERMINING THE .NET PROFIT?. 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCE OF THE CA SE AND IN LAW, THE LD. CIT(A) ERRED IN ACCEPTING THE NET PROFIT OF THE ASS ESSEE ON NON GENUINE PURCHASES AT 6% BY RELYING ON INSTRUCTION OF 2008 D ATED 22/06/2008 EVEN THOUGH THE FACTS OF THE CASE-DO NOT FALL WITHIN THE PROVISIONS OF THESE INSTRUCTIONS IN SO FAR THE ASSESSMENT WAS MADE U/S 153A RWS 143(3) PURSUANT TO SEARCH AND SEIZURE OPERATION.?.' 3. 'WHETHER ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN GIVING RELIEF TO THE ASSESSEE B Y DETERMINING THE NET PROFIT AT 5.49% ON NON GENUINE PURCHASES BY RELYING ON INSTRUCTION NO 2 OF 2008 DATED 22/O6/20O8 WHICH REQUIRED/SPECIFIES 6 % OF NET PROFIT ON TOTAL TURNOVER UNDER THE BENIGN ASSESSMENT SCHEME, WHEREAS THE ASSESSEE DECLARED ONLY 0.51% NET PROFIT ON TOTAL TU RNOVER?' 4. 'WHETHER ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN RESTRICTING THE DISALLOWANCE TO 5.49% OF BOGUS PURCHASE WHEREAS, THE INSTRUCTION NO,2 OF 2008 DATE D 22/02/2018 REQUIRED A MINIMUM ESTIMATION OF NET PROFIT AT 6% O F TOTAL TURNOVER? THE APPELLANT PRAYS THAT THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEAL) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY 5. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E COMPANY IS ENGAGED IN THE BUSINESS OF IMPORT, MANUFACTURING AN D EXPORT DIAMONDS. THE COMPANY STATED THAT IT IS 100% EXPOR T ORIENTED UNIT. THE ASSESSEE PURCHASED DIAMONDS FROM LOCAL MARKET A ND AFTER PROCESSING, THE SAME HAS BEEN EXPORTED TO VARIOUS C OUNTRIES. A SEARCH AND SEIZURE ACTION U/S 132 OF THE I.T.ACT, 1 961 WAS CONDUCTED IN THE CASE OF THE ASSESSEE ON 05/05/2014 . DURING THE COURSE OF SEARCH, IT WAS NOTICED THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRIES OF BOGUS PURCHASES FROM VARIO US SUSPICIOUS CONCERNS ,LIKE COMPANIES CONTROLLED BY RAJENDRA JA IN GROUP, SANJAY DECENT DIA JEWELS PVT.LTD. 4 CHAUDHARI GROUP AND DHARMI CHAND GROUP. THIS FACT H AS BEEN FURTHER SUPPORTED BY THE FACT OF SEARCH ACTION COND UCTED BY THE INVESTIGATION WING, MUMBAI IN THE CASES OF RAJENDRA JAIN GROUP, SANJAY CHAUDHARI GROUP AND DHARMI CHAND GROUP ON 03 /10/2013. CONSEQUENT TO SEARCH, NOTICE U/S 153A OF THE I.T.AC T, 1961 WAS ISSUED. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS NOT SUBMITTED ANY RETURNS. THEREAFTER, NOTICES U/S 142(1) WAS ISS UED ON 23/09/2016. THE ASSESSEE HAS FINALLY FILED RETURN O N 08/10/2016, IN RESPONSE TO NOTICE ISSUED U/S 153A. THE CASE WAS SE LECTED FOR SCRUTINY AND DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE LD. AO ON THE BASIS OF INFORMATION GATHERED DURING THE COURSE OF SEARCH AND SURVEY AND ALSO, TAKEN NOTE OF VARIOUS INFORMAT IONS RECEIVED FROM INVESTIGATION WING, CONSEQUENT TO SEARCH OPERA TIONS CARRIED OUT IN THE CASES OF ENTRY PROVIDERS, CAME TO THE CONCLU SION THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES OF BOGU S PURCHASE BILLS FROM VARIOUS PARTIES AND ACCORDINGLY, MADE A DDITIONS TOWARDS SUCH BOGUS PURCHASES @8% PROFIT AND MADE ADDITIONS OF RS. 4,49,77,145/-. 6. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A). BEFORE THE LD.CIT(A), THE ASSESEE HAS SUBMITTED THAT THE LD. AO WAS ERRED IN MAKING ADDIT IONS TOWARDS PURCHASE FROM CERTAIN PARTIES, ON THE BASIS OF STAT EMENT RECORDED FROM THEM, DURING THE COURSE OF SEARCH IN THEIR CAS ES, IGNORING, THE FACT THAT THE ASSESSEE HAS JUSTIFIED PURCHASE WITH NECESSARY EVIDENCES. THE ASSESEE, FURTHER STATED THAT ALL PUR CHASES ARE GENUINE AND WHICH ARE RECORDED IN BOOKS OF ACCOUNTS . FURTHER, THE DIRECTOR OF THE ASSESSEE COMPANY HAD DENIED THE C ONTENT OF THE STATEMENT OF RAJENDRA JAIN. ALL TRANSACTIONS WERE D ONE THROUGH PROPER BANKING CHANNEL. THEREFORE, MERELY FOR THE R EASONS THAT SOME PARTIES WERE NOT RESPONDED TO U/S 133(6) NOTIC ES AND ALSO, ON DECENT DIA JEWELS PVT.LTD. 5 THE BASIS OF STATEMENT OF THIRD PARTIES ADDITIONS C ANNOT BE MADE TOWARDS PURCHASE, WHEN ASSESEE HAS DISCHARGED ITS B URDEN BY FILING NECESSARY EVIDENCES. 7. THE LD.CIT(A) AFTER CONSIDERING RELEVANT SUBMISS IONS OF THE ASSESEE AND ALSO, TAKEN SUPPORT FROM THE RECOMMENDA TION OF THE TASK FORCE GROUP FOR DIAMOND INDUSTRY SET UP BY TH E GOVERNMENT OF INDIA, MINISTRY OF COMMERCE AND INDUSTRY, WHICH AFT ER CONSIDERING THE BENIGN ASSESSMENT PROCESS (BAP) SCHEME RECOMME NDED A NET PROFIT OF 2% FOR TRADING ACTIVITY AND 3% FOR M ANUFACTURING ACTIVITY AND 2.5% ACROSS THE BOARD FOR DIAMOND INDUSTRY AND ALSO BY RELIED UPON CERTAIN JUDICIAL PRECEDENTS, INCLUDING THE DEC ISION OF ITAT, MUMBAI BENCH IN THE CASE OF RENISHA IMPEX PVT.LTD. IN ITA NO. 4464/MUM/2016 AND ITA NO. 4453/MUM/2016, HAS SCALED DOWN ADDITIONS MADE BY THE LD. AO TOWARDS PROFIT ON ALLE GED NON GENUINE PURCHASES FROM CERTAIN PARTIES TO 6% PROFIT ON SUCH NON-GENUINE PURCHASES. THE LD.CIT(A), FURTHER ALLOWED GROSS PR OFIT DECLARED BY THE ASSESSEE FOR THE RELEVANT YEARS AND MADE ADDITI ONS TOWARDS DIFFERENCE IN GROSS PROFIT ON TOTAL ALLEGED NON BOG US PURCHASE. THE RELEVANT FINDINGS OF THE LD.CIT(A) ARE AS UNDER: 4.27. THE DATA OF THE PROFITS DISCLOSED, THE IMPUGN ED PURCHASED, AND THE DISALLOWANCES MADE BY THE ASSESSING OFFICER IS TABU LATED BELOW: A.Y . TOTAL SALES GROSS PROFIT NET PROFIT PURCHASES (RS.) ALELGED BOGUS PURCHA SE DISALLOWA NCE IN ASSESSME NT NET PROFIT % AFTER DISALLOWA NCE AMT.(RS .) % AMT.(R S) % 201 1- 12 3,11,38,50 ,054 12,18,25, 187 3,9 1 1,58,44, 033 0.5 1 2,77,90,46,53 5 56,22,14,3 15 4,49,77,145 1.95 201 2- 13 4,30,73,45 ,369 12,75,67, 536 2.9 6 2,29,62, 442 0.5 3 3,97,07,15,47 9 83,55,39,7 15 6,68,43,177 2.08 201 5,00,29,95 16,72,39, 3.3 2,66,57, 0.5 4,44,73,63,25 28 ,17,28,6 2,25,38,290 0.98 DECENT DIA JEWELS PVT.LTD. 6 3- 14 ,789 282 4 509 3 0 27 201 4- 15 7,81,73,37 ,933 26,91,60, 012 3.4 4 5,78,52, 222 0.7 4 7,03,56,74,56 0 6,12,49,09 8 6,12,49,098 1.52 4.28 IN THE CASE OF NAITIK GEMS THE ISSUE INVOLVED PURCHASES FROM ENTITIES BELONGING TO RAJENDRA JAIN ENTITIES AND TH E PURCHASES WERE FROM SPARSH EXPORTS PVT LTD. THE ASSESSING OFFICER MADE A DISALLOWANCE OF 6% OF SUCH PURCHASES. THIS WAS BASED ON THE INSTRU CTION NO 2 OF 2008 RELATED TO BENIGN ASSESSMENT IN THE CASES OF ASSESS ES IN THE DIAMOND BUSINESS. THE LD. CIT(A) REDUCED THE DISALLOWANCE T O 3% OF THE PURCHASES BASED ON THE RECOMMENDATION OF THE TASK FORCE GROUP FOR DIAMOND INDUSTRY SET UP BY THE GOVERNMENT OF INDIA, MINISTRY OF COMMERCE AND INDUSTRY WHICH AFTER CONSIDERING THE B ENIGN ASSESSMENT PROCEDURE (BAP) SCHEME RECOMMENDED A NET PROFIT OF 2% FOR TRADING ACTIVITY, 3% FOR MANUFACTURING ACTIVITY AND 2.5% A CROSS THE BOARD FOR DIAMOND INDUSTRY. THE APPEAL FILED BY THE ASS ESSE IN ITA NO. 4760/MUM./2017 WAS DISMISSED VIDE ORDER DATED 2.11 ,2017- IN THE CASE OF RENISHA IMPEX P, LTD. IN ITA 4464/M/16 AND ITA 4 453/M/16 IN THE ORDER, DATED 12.9.2017, AS AGAINST 100% DISALLOWANC E MADE BY THE ASSESSING OFFICER, THE HONBLE ITAT UPHELD DISALLOW ANCE OF 4% OF IMPUGNED PURCHASES. THIS WAS A CASE OF PURCHASES FR OM PRAVEEN JAIN ENTITY. IN THE CASE OF SURESH L SATYANI IN ITA 3452 /M/16 VIDE ORDER DATED 8.3,2017, THE HONBLE ITAT UPHELD THE ORDER OF CIT( A) WHO HAD CONSIDERED THE DISALLOWANCE @ 9% BUT CONSIDERED GRANTING CREDIT FOR NET PROFIT OFFERED- THIS WAS A CASE WHERE PURCHASES WER E FROM BHANWARLAL JAIN ENTITIES. 4.29. IN THE CASE OF THE APPELLANT, THEREFORE THE F AIR AND REASONABLE MARGIN IS CONSIDERED TO BE @ 6% OF THE IMPUGNED PUR CHASES. THE APPELLANT IN THE CASE BEFORE ME HAS SHOWN NET PROFI T AT RS. 1,58,44,033/- IN ITS PROFIT AND LOSS ACCOUNT IN THE CURRENT AY 20 11-12, WHICH IS 0.51 % OF THE TURNOVER. THUS AFTER CONSIDERING THE NET PRO FIT DISCLOSED, DISALLOWANCE IS COMPUTED @ 5.49% OF THE IMPUGNED PU RCHASES. ACCORDINGLY, THE ADDITION TO THE TOTAL INCOME IS RE STRICTED TO 5.49 % OF THE PURCHASES OF RS. 56.22,14,315/- WHICH WORKS OUT TO RS., 3,08,65,565/-. THE APPELLANT GETS A RELIEF OF RS, L,41,11,580/-. 8. NONE APPEARED FOR THE ASSESSEE. WE HAVE HEARD TH E LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND GO NE THROUGH ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT THE L D. AO HAS MADE ADDITIONS TOWARDS ALLEGED NON GENUINE BOGUS PURCHAS E FROM CERTAIN PARTIES, ON THE BASIS OF INFORMATION GATHERED DURI NG THE COURSE OF SEARCH AND SURVEY IN THE CASE OF THE ASSESEE AND IT S ASSOCIATES AND ALSO, ON THE BASIS OF INFORMATION RECEIVED FROM IN VESTIGATION WING, DECENT DIA JEWELS PVT.LTD. 7 AS PER WHICH CERTAIN PARTIES WERE INVOLVED IN PROVI DING ACCOMMODATION ENTRIES OF BOGUS PURCHASE BILLS TO VA RIOUS PARTIES AND THE ASSESSEE BEING ONE OF THE BENEFICIARY OF AC COMMODATION ENTRY OF SUCH BOGUS PURCHASE BILLS ISSUED BY SUSP ICIOUS DEALERS/ENTRY PROVIDERS. THE LD. AO HAS EXTENSIVEL Y DISCUSSED THE ISSUE IN LIGHT OF MODUS OPERANDI USED BY THE ENTRY PROVIDERS, THEIR STATEMENT RECORDED DURING THE COURSE OF SEARCH AND ALSO INPUTS GATHERED DURING THE COURSE OF SEARCH AND SURVEY CON DUCTED IN THE CASE OF THE ASSESSEE AND CAME TO THE CONCLUSION TH AT ALTHOUGH, THE ASSESEE HAS FILED NECESSARY BASIC EVIDENCE IN SUPPO RT OF PURCHASES, BUT FAILED TO FILE FURTHER EVIDENCES TO PROVE THE P URCHASE TO THE SATISFACTION, MORE PARTICULARLY IN THE BACKDROP OF REPORT OF INVESTIGATION WING AND THE STATEMENT OF THOSE PARTI ES, DURING THE COURSE OF SURVEY. IT IS THE CONTENTION OF THE ASSES EE BEFORE THE LOWER AUTHORITIES THAT PURCHASES FROM THOSE PARTIES ARE G ENUINE, WHICH ARE SUPPORTED BY NECESSARY EVIDENCES. ALL PURCHASES WER E RECORDED IN BOOKS OF ACCOUNTS. PAYMENTS AGAINST SAID PURCHASE H AVE BEEN MADE THROUGH PROPER BANKING CHANNELS. THE LD. AO H AS NEITHER POINTED OUT ANY DISCREPANCIES IN BOOKS OF ACCOUNTS, NOR MADE OUT A CASE OF SALES OUTSIDE BOOKS OF ACCOUNTS. IN ABSENCE OF ANY INCORRECTNESS IN BOOKS OF ACCOUNTS, NO ADDITION CO ULD BE MADE TOWARDS ALLEGED NON GENUINE PURCHASES, ONLY ON THE BASIS OF INFORMATION COLLECTED FROM THIRD PARTY SOURCE, WHEN THE ASSESSEE HAS JUSTIFIED PURCHASES WITH NECESSARY EVIDENCES. 9. HAVING CONSIDERED RELEVANT MATERIAL ON RECORD, W E FIND THAT THE LD.CIT(A) HAS CATEGORICALLY RECORDED FACTS WITH REG ARD TO MODUS OPERANDI OF ENTRY PROVIDERS, IN LIGHT OF THEIR FINANCIAL ST ATEMENTS AND CAME TO THE CONCLUSION THAT ALL THOSE COMPANIES ARE SHOWING HIGH TURNOVER WITHOUT THERE BEING ANY ASSET BASE, WHIC H CLEARLY PROVES THE FACT THAT THEY ARE INVOLVED IN PROVIDING ACCOMM ODATION ENTRIES DECENT DIA JEWELS PVT.LTD. 8 WITHOUT THERE BEING ANY ACTUAL BUSINESS ACTIVITY. T HE LD.CIT(A) HAS ALSO RECORDED CATEGORICAL FINDING THAT THE FINDINGS OF THE LD. AO THAT SHRI RAJENDRA JAIN AND OTHER ENTITIES ARE ENGAGED I N THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES IS NOT MERELY BASED ON THEIR STATEMENTS RECORDED U/S 132(4) OF THE ACT, BUT IT I S FURTHER SUPPORTED BY INCRIMINATING MATERIAL SEIZED DURING THE COURSE OF SEARCH, WHICH CLEARLY SUGGEST THE FACT THAT THEY ARE INVOLVED IN PROVIDING ACCOMMODATION ENTRIES. THUS, THE FINDINGS OF THE SE ARCH OPERATIONS ARE BASED NOT ONLY ON THE CONFESSIONAL STATEMENTS O F THE RAJENDRA JAIN GROUP, BUT ALSO ON SEVERAL OTHER INDIVIDUAL S, WHO ARE PART AND PARCEL OF THE ENTIRE OPERATION OF BUSINESS OF THE RAJENDRA JAIN GROUP. THE LD.CIT(A), FURTHER NOTED THAT INDEPENDENT SEARC HES HAVE BEEN CONDUCTED ON FEW BENEFICIARIES, BASED ON THE INPUTS OF THE SEARCH IN THE CASE OF ENTRY PROVIDERS AND SUCH BENEFICIARIES HAVE ADMITTED TAKING OF ACCOMMODATION ENTRIES FROM THE GROUP CONC ERNS OF ENTRY PROVIDERS. IN FACT, A SEARCH ACTION IN THE CASE OF THE ASSESSEE WAS CONDUCTED, WHICH PROVED TAKING ACCOMMODATION ENTRIE S. THE LD.CIT(A), FURTHER NOTED THAT ALTHOUGH, THE DIRECTO R OF THE COMPANY DENIED THE CONTENTS OF STATEMENTS GIVEN BY THE ENTR Y PROVIDER AND THEIR EMPLOYEES, BUT, ON PERUSAL OF EVIDENCE COLLEC TED DURING THE COURSE OF SEARCH IN THE FORM OF E-MAIL , IT IS SEEN THAT THE EMPLOYEES OF ASESSEE COMPANY RAVI JANGLE, VILAS PALASMAKAR ET C HAVE BEEN ALLOTTED E-MAIL BY THE ASSESEE ON THE WEB PORTAL OF THE SAID GROUP, ALSO THE PASSWORD OF THESE E-MAILS STARTS WITH THE DECENT ONLY. ON PERUSAL OF THESE E-MAIL, IT IS SEEN THAT THE EMAIL HAVE BEEN SENT TO ANOOP JAIN OF ANADI IMPEX, A COMPANY CONTROLLED BY RAJEDNDRA JAIN FOR REQUISITION OF ACCOMMODATION PURCHASE BILL S, AS PER THE SPECIFICATION MENTIONED IN THE E-MAIL FOR CUT AND P OLISHED DIAMONDS. HENCE, THESE EMAILS EXCHANGED BETWEEN CONCERNS OF R AJENDRA JAIN AND EMPLOYEES OF ASSESSEE INDEPENDENTLY PROVES THAT THE ASSESSEE IS INDULGED IN ACCEPTING ACCOMMODATION BILLS IN TH E FORM OF BOGUS DECENT DIA JEWELS PVT.LTD. 9 PURCHASE FORM ENTRY PROVIDERS. THEREFORE, THE LD.CI T(A) CAME TO THE CONCLUSION THAT THERE IS NO ERROR IN THE FINDINGS R ECORDED BY THE LD. AO TO ARRIVE AT CONCLUSION THAT PURCHASES CLAIMS T O HAVE BEEN MADE FROM CERTAIN PARTIES ARE NON GENUINE, WHICH A RE NOT SUPPORTED BY NECESSARY EVIDENCES. THE LD.CIT(A), FURTHER TAKI NG NOTE OF THE FACT OF DIAMOND INDUSTRY AND ITS MARGINS AND ALSO, TAKEN SUPPORT FROM THE RECOMMENDATION OF THE TASK FORCE GROUP FO R DIAMOND INDUSTRY SET UP BY THE GOVERNMENT OF INDIA, MINIST RY OF COMMERCE AND INDUSTRY, WHICH AFTER CONSIDERING THE BAP SCHEM E RECOMMENDED A NET PROFIT OF RANGING TO 2% TO 3% DEP ENDING UPON THE NATURE OF THE BUSINESS HAS SCALED DOWN ADDITIO NS MADE BY THE LD. AO TOWARDS ALLEGED NON GENUINE PURCHASES TO 6% PROFIT ON SUCH ALLEGED NON GENUINE PURCHASES. FURTHER, HE HAS ALLO WED RELIEF TO THE ASSESSEE, IN RESPECT OF GROSS PROFIT ALREADY DECLAR ED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE FOR THE RELEVANT ASSESSMEN T YEAR AND ACCORDINGLY, DIRECTED THE LD. AO TO ADOPT NET PROFI T OF 6% ON NON GENUINE PURCHASES AND FURTHER ALLOW DEDUCTIONS TOWA RDS GROSS PROFIT ALREADY DECLARED BY THE ASSESSEE FOR THE RELEVANT A SSESSMENT YEARS. FACTS REMAINS UNCHANGED, THE ASSESEE NEITHER APPEAR ED BEFORE US, NOR FILED ANY DETAILS TO PROVE THAT FINDINGS OF FAC T RECORDED BY THE LD.CIT(A) IS INCORRECT. WE FURTHER NOTED THAT THE F INDINGS RECORDED BY THE LD.CIT(A) IS BASED ON THE RECOMMENDATION OF THE TASK FORCE CONSTITUTED BY THE MINISTRY OF COMMERCE AND INDUSTR Y, GOVERNMENT OF INDIA AND ALSO, THE DECISION OF CO-ORDINATE BENC H OF ITAT, IN THE CASE OF RENISHA IMPEX PVT.LTD. IN ITA NO. 4464/MUM/ 2016 AND ITA NO. 4453/MUM/2016. THEREFORE, WE ARE OF THE CONSIDE RED VIEW THAT THE LD.CIT(A) WAS RIGHT IN ESTIMATING 6% GROSS PROF IT ON ALLEGED NON GENUINE PURCHASES AND FURTHER ALLOWED DEDUCTIONS TO WARDS GROSS PROFIT ALREADY DECLARED BY THE ASSESSEE FOR THE REL EVANT PERIOD . HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF TH E LD.CIT(A) AND DECENT DIA JEWELS PVT.LTD. 10 DISMISSED APPEAL FILED BY THE ASSESSE, AS WELL AS T HE REVENUE FOR AY 2011-12. ITA NOS. 7081 TO 7083/MUM/2018 AND ITA.NOS.7390 TO 7392/MUM/2018 FOR AY 2012-13 TO 2014-15:- 10. THE FACTS AND ISSUES INVOLVED IN THESE APPEALS FILED BY THE ASSESEE, AS WELL AS THE REVENUE ARE IDENTICAL TO TH E FACTS AND ISSUES, WHICH WE HAD CONSIDERED IN ITA NO. 7080/MUM/2018 AN D ITA NO.7389/MUM/2018 FOR AY 2011-12. THE REASONS GIVEN BY US IN PROCEEDINGS PARAGRAPH IN ITA NO. 7080 & 7389/MUM/20 18 SHALL MUTATIS MUTANDIS APPLY TO THESE APPEALS, AS WELL. T HEREFORE, FOR DETAILED REASONS RECORDED IN PRECEDING PARAGRAPH IN ITA NO. 7080/MUM/2018 AND ITA NO.7389/MUM/2018 ,WE DISMISS APPEAL FILED BY THE ASSESEE, AS WELL AS APPEALS FILED BY T HE REVENUE FOR AY 2012-13 TO 2014-15. 11. IN THE RESULT, APPEALS FILED BY THE ASSESEE, AS WELL AS APPEALS FILED BY THE REVENUE FOR AY 2011-12 TO 2014-15 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29/01/2 020 SD/- (SAKTIJIT DEY) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 29/ 01/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. DECENT DIA JEWELS PVT.LTD. 11 BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//