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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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