M/s. Apee Gems vs. DCIT Circle 19(1) Mumbai

Parties Involved

Facts Summary

The assessee firm, M/s. Apee Gems, is into the business of trading polished diamonds both locally and internationally. The assessee filed its return of income for the Assessment Year 2010-11 on 23/09/2010, declaring a total income of Rs.1,21,05,560/-. The assessment was reopened under section 147 based on information received from the office of DGIT (Inv.) Mumbai, indicating that the assessee had made purchases from a concern of Bhanwarlal Jain group, namely Pankaj Exports, for Rs.2,64,56,523/-. The Assessing Officer treated these purchases as bogus and added Rs.13,22,826/- to the assessee's income. The CIT(A) confirmed the addition, applying a gross profit margin of 5% on the alleged bogus purchases. The assessee challenged this decision, arguing that the gross profit rate of 5% was unreasonable and that the addition should be restricted.…

Legal Issues

• 1. Validity of notice issued u/s.148 and addition of Rs.13,22,826/- towards alleged bogus purchases from Pankaj Exports.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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