Bogus Purchase Addition on Diamonds Restricted to Profit Element by ITAT Mumbai

Spark Gems Vs ITO (ITAT Mumbai) 100% Bogus Purchase Addition on Diamonds Deleted – Only Profit Element Taxable: ITAT Mumbai Mumbai ITAT has struck down the addition of ₹27.90 lakh sustained by CIT(A) on account of alleged bogus purchases. The case arose from a reopening based on investigation findings that Jain group entities were engaged in providing accommodation entries. AO treated the entire purchases as bogus & added back 100% of the amount. Assessee argued that purchases were genuine & linked to export of cut & polished diamonds, which could not have taken place without a...