ASST CIT 5(3)(2), MUMBAI vs. SUNRAJ DIAMONDS EXPORTS PLTD, MUMBAI

These are cross appeals filed by Revenue and assessee against the order of CIT(A) for assessment years 2008-09 and 2011-12 in the matter M/s. Sunraj Diamonds Exports Pvt. Ltd., of order passed u/s.143(3) r.w.s. 147 of the Income Tax Act (hereinafter “the Act”).

Rival contentions have been heard and record perused. The brief facts of the case are that the assessee is engaged in manufacturing and export of diamonds. During the course of assessment u/s.143(3) r.w.s. 147 of the Act the AO made disallowance in respect of bogus purchase @12.5%. By the impugned order the CIT(A) restricted the same at 3%. The CIT(A) observed that VAT rate is 1% and custom duty is about 2%, accordingly, he upheld addition to the extent of 3%. Against this order of the CIT(A) both assessee and Revenue are in appeal before us.

We found that in the case of appeals filed by the Revenue the tax effect are less than Rs.20 lakhs, therefore, in terms of CBDT Circular No. No.3/2018 dated 11/07/2018, these appeals deserve to be dismissed 4. In the result all the appeals of the Revenue are dismissed.

With regard to the merit of the addition upheld by CIT(A), it was submitted by learned AR that assessee had filed following documents and information before the lower authorities. • Copy of Ledger Account and confirmation of Mayank Impex and Nazar Impex Pvt. Ltd. • Copies of Invoice cum delivery Challan issued by Mayank Impex and Nazar Impex Pvt. Ltd. • Copies of Bank Statement highlighting the payment made to - Mayank Impex and Nazar Impex Pvt. Ltd. • Details of Opening Stock, Purchases , sales and closing stock details Quantity in carats • Stock register for purchases and corresponding sales • Nazar Impex Pvt. Ltd. purchase against "H" Form and corresponding Export Sales documents