DCIT- 5(2)(1), MUMBAI vs. IORA DIAMONDS PVT. LTD., MUMBAI

Since the issues raised in all the appeals are identical, therefore, for the sake of convenience, these appeals are clubbed, heard and disposed off by this consolidated order.

At the outset, it is noticed that none appeared on behalf of assessee and no application for adjournment was moved on behalf of the assessee. Therefore, we have decided to proceed with the hearing of the case with the assistance of the Ld. DR and based on the materials placed on record.

The only effective issue raised by the revenue is that whether the Ld. CIT(A) was justified in reducing the profit element to 8% as against 12.5% on alleged bogus purchases made by the Ld. AO in the facts and circumstances of the case.

We have heard Ld. DR and perused the material placed on record as well as orders passed by the revenue authorities. We find from the records that it is not disputed that assessee is engaged in the business of trading in diamonds and it is also not disputed that assessee had made purchases of diamonds from 3 5618 & 5853/Mum/2018 M/s Iora Diamonds Pvt. Ltd. certain parties listed in each of the assessment orders who have been found to be engaged in the business of providing accommodation bills based on the information furnished by Maharashtra Sales Tax Department and it was also found to be correct based on the search conducted u/s 132 of the Act in the case of Bhanwarlal Jain Group, Dharmichand Jain Group, Rajendra Jain Group and Sanjay Chaudhary Group. But, we find that Ld. AO had given a categorical finding that assessee had made purchases of diamonds from the grey market in order to have some saving of taxes and had obtained bogus bills from some other parties. We also find that Ld. AO had given his categorical finding that assessee had indeed made sales of diamonds out of the purchases made from the grey market. Accordingly, we find that Ld. AO was right in making addition only to the extent of profit embedded in such purchases. We also find that Ld. AO had adopted the profit percentage of 12.5% which was reduced to 8% by Ld. CIT(A). We find that Ld. CIT(A) had taken a shelter of the Coordinate Bench decison of this Tribunal in the case of Dhada Jems Ltd. vrs. ITO in ITA No. 7310 to 7314 dated 19.05.17, wherein this Tribunal had applied

Further, we find that the Ld. CIT(A) had reduced the profit percentage of 8% by placing reliance on the order of Coordinate Bench of this Tribunal, in respect of an assessee engaged in the similar type of industry as that of the assessee. Therefore, in our considered opinion, there is no need to interfere with the findings of the Ld. CIT(A). Accordingly, grounds raised by the revenue are dismissed.

In the net result, all the appeals filed by the revenue are dismissed.