Tribunal directs reassessment in tax appeal, emphasizing evidence scrutiny for genuine transactions.

The Tribunal allowed the appeal for statistical purposes, directing the Assessing Officer to reconsider the case in light of additional evidence submitted by the assessee regarding the genuineness of transactions in diamond trading. The disallowance of losses and adhoc additions were disputed, emphasizing the need for proper verification and consideration of evidence in tax assessments. The Tribunal set aside the previous decision, underscoring the importance of due process and thorough examination in tax matters.

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Issues Involved:
1. Opportunity of hearing not granted to the assessee
2. Disallowance of loss for Rs. 54,43,913/-
3. Adhoc 15% disallowance in purchases for Rs. 61,45,937/-

Issue 1: Opportunity of hearing not granted to the assessee
The appeal by the assessee was directed against the order of CIT(A) for the assessment year 2014-15, citing that the opportunity of hearing was not granted. The CIT(A) did not consider that the show cause for addition was issued after the assessment was already completed, which the assessee argued was against the principles of natural justice. The issue of opportunity of hearing was a key contention raised by the assessee.

Issue 2: Disallowance of loss for Rs. 54,43,913/-
The disallowance of loss was another ground of appeal by the assessee, challenging the CIT(A)'s decision to hold the claim of loss on unverifiable purchases as bogus. The assessee argued that there was a lack of control over suppliers after several years, payments were made through banking channels, and the nexus of purchase and sales justified the inclusion of the loss in profits. The CIT(A) was criticized for not having a valid basis for disallowing the loss, forming a significant part of the appeal.

Issue 3: Adhoc 15% disallowance in purchases for Rs. 61,45,937/-
The confirmation of the adhoc addition at 15% of total purchases by the CIT(A) was disputed by the assessee. The grounds for contesting this disallowance included the lack of rejection of books of account under section 145 and the estimation basis used for the disallowance. The assessee argued that the adhoc addition was unjustified, emphasizing the need for proper consideration before confirming such disallowances.

The Tribunal considered the submissions from both parties, focusing on the genuineness of the transactions involving diamond trading. The AO's investigation revealed discrepancies in the purchase and sale transactions, leading to the addition of Rs. 61,45,937/- as the transactions were deemed bogus. The assessee later filed additional evidence to support the genuineness of the transactions, including PAN cards, income tax return acknowledgments, and bank statements of suppliers. The Tribunal admitted the additional evidence, emphasizing the relevance for adjudication. The matter was set aside for readjudication by the Assessing Officer to consider the additional evidence and conduct further verification if necessary.

In conclusion, the appeal by the assessee was allowed for statistical purposes, highlighting the importance of proper verification and consideration of evidence in tax assessments.

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