INSTRUCTION NO-2/2008, Dated: February 22, 2008
‘Benign Assessment Procedure’ for assessees engaged in diamond manufacturing and/or trading.
The undersigned is directed to state that the ‘Benign Assessment Procedure’, in the case of assessees engaged in diamond business as announced by Hon’ble Finance Minister in his Budget Speech on 28.2.2007 shall be as under:–
A. The procedure will apply to assessees engaged in the business of manufacturing and/or trading of diamonds (referred to below as such business).
B. If an assessee has shown a sum equal to or higher than 6% of his total turnover from such business as his income under the head ‘profits and gains of business or profession’ for a particular assessment year, the Assessing Officer shall accept his trading results.
C. (i) The assessee shall be required to maintain separate books of accounts of such business.
(iii) Acceptance of profit at 6% or above as per para (B) for a particular assessment year will not be a precedent for that assessee or for any other assessee.Online GST Certification Course by TaxGuru & MSME- Click here to Join
D. The procedure shall not apply to an assessee for an assessment year –
(iv) Where assessment is being made pursuant to a –
i. search and seizure action under section 132; or
ii requisition made under section 132A; or
iii survey action 133A.
(v) where 50 per cent or more of the income from such business of an assessee is claimed as deduction under Chapter-III or under Chapter VI-A of the Income-tax Act.
(vi) where there is information regarding escapement of income.
E. The rate of profit as a percentage of turnover would be reviewed annually on the basis of revenue generation and results of scrutiny assessments, searches and surveys made during the year.
2. The above instruction is issued under section 119(1) of the Income-tax Act, 1961 and would be applicable for assessments made during Financial Year 2008-09. The instruction may be brought to the notice of all concerned in your Region.
Under Secretary to the Government of India