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June 2008

Benign Assessment procedure for assesses engaged in diamond manufacturing and/or trading : Instruction No. 2/2008 dated 22-2-2008.

By Pinky Shah, Sonalee Godbole, Gaurang Gandhi, Chartered Accountants
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Part A : DIRECT TAXES

2 Benign Assessment procedure for assesses engaged in diamond manufacturing and/or trading : Instruction No. 2/2008 dated 22-2-2008.

In the last Budget, the Finance Minister had announced a Benign Assessment procedure for assesses engaged in diamond manufacturing and/or trading. The main features of the scheme are :

  •  If the assessee offers 6% or more of its total turnover as business income, the same should be accepted by AO

  •  Separate books of account need to be maintained

  •  6% would not be a precedent for that or any other assessee

  • This procedure would not apply when :

* assessment is pursuant to search, survey, requisition or seizure action

* 50% or more of such income is claimed as a deduction

* Where there is information of income being escaped

  •  The said procedure shall apply for assessments made during the financial year 2008-09.

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