2014 (12) TMI 1202

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.... department: "1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition in respect of unexplained purchase to the tune of Rs. 16,57,334/-. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in giving the above relief without appreciating the fact that the assessee was unable to substantiate his stand with any other evidence other than self serving documents that the purchase to the tune of Rs. 16,57,334/- are genuine. 3. The Appellant prays that the order of the CIT(A) on the above be reversed and that of the assessing officer be restored. 4. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary". 5. The facts are that the assessee is a partnership firm, engaged in the business of trading in Gold, Diamond, Silver, Precious Stones etc. since 2006. Assessee's parent firm, M/s G V Zaveri Rajpara has been in this trade since 1949. 6. A survey u/s 133A was conducted on Moxdiam group, wherein, owners of various group entities of Moxdiam group was recorded and they deposed before the survey team that they used to provide acco....

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....te proceedings. In view of this the appellant was appraised of the gap in figures by letter dated 11.01,2012 which is reproduced as under: "During the course of appellate proceedings it has been submitted by you that addition made on the basis of retracted statement is not sustainable and hence should be deleted. In view of the fact that the statement was given by Shri Basant Jam, Proprietor of M/s. Basant Dia Jewells and Partner of M/s. Moxdiam during the course of survey action recorded on 09.07.2008 which has been retracted by him vide affidavits dated 18.11.2010 i.e. after the gap of more than two years, you were asked to furnish details of your stock register i.e. opening stock, purchases made from these parties as well as others during the year, sales made and closing stock left at the end i.e. 31.03.2008. I have gone through the details filed by you, which are as under - Purchase 306.13   Issue   117.39 Closing stock   188.74   306.13 306.13   Meanwhile a copy of the audit reported dated 11.08.2007 filed by you for the instant assessment year has been also obtained from the concerned A.O. from ....

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....rlier which were only for diamonds as in loose pieces and not for the ones studded in jewellery, and whose details are furnished now by the appellant. I have gone through all the three details and it is noted that all these details of incoming as well as outgoing when compared with these statements for the diamonds in loose pieces together with the diamonds in studded jewellery matches. Since the opening and the closing stock in form 201C is matching, the figure is found reconciled for the stock reflected by the appellant during the appellate proceedings with the one filed along with the audit report. 3.5 In view of this, that the discrepancies could not be found in the stock, it cannot be inferred that there are unaccounted purchases made by the appellant. I am also. of the view that as there are sales corresponding purchases have to be there, I agree with the finding that it can be a case of accommodation entry where appellant is actually making purchases from some other source and getting bills from these two parties who actually have not sold as stated on oath also. This was admitted originally by the party whose statement is the basis of addition. However in view of t....

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....nt of Mr. Basant D Jain, made the addition. It was also submitted that the assessee produced all the possible documents, which could be produced which were ignored. Despite the evidence on record, the assessee was saddled with the addition, which does not have any factual basis. 17. We have heard the arguments and have pursued the material on record and the order of the revenue authorities. It is not in dispute that the survey action was conducted on a third party. It is also not in dispute that the assessee had business relation with Moxdiam Group, like so many other parties. It is also a fact that there is not even a iota of evidence with the AO, to prove that the assessee did not have straight dealings with the Moxdiam Group. It is also a fact that, that the assessee entered each of its transaction in its primary books, comprising of ledger and stock register. From the order of the AO, the DR could not establish before us that the transaction as recorded in the books was sham. We cannot accept a bald statement made by the AO that any transaction/business done with a party would be sham, simply because the opposite party besides doing regular business was also indulging in pro....