TaxTMI 
TaxTMI 
2016 (5) TMI 1291
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....8,691/-. The AO during the course of proceedings observed that information had been gathered by the Revenue that no such concerns exists on the given address at least in the following cases from whom purchases were made by the assessee:- S.No. Name Amount 1 M/s. Selective Gems 5,64,701/- 2 M/s. Aayush Jewellers 2,65,415/- 3 M/s. Govindam Jewellers 13,28,897/- 4 M/s. Gaurav Exports 6,86,130/- 5 M/s. Touch Jewels 10,14,794/- 6 M/s. Anil Exporters 6,82,664/- 7 M/s. Mahaveer Gems & Jewels 3,93,680/- 8 M/s. Bright Jewels 8,12,410/- Total 57,48,691/- 3. The AO also noticed that since the concerns do not exist on the given address, as such they were providing accommodation entries and were not doing any genuine sale/purchase of the gems & jewels and the exporters like this, though may be having unexplained stock to regularize such unaccounted stock used to take sale bills from concerns like this on a nominal charge to regularize such unaccounted stock. The AO accordingly desired the assessee to produce the parties alongwith their books of accounts and other supporting material. However, the appellant contended that all the parties are genuine and genu....
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....was no justification for holding the same to be non-genuine. He further contended that the payments having been made, the assessee was not in a position to produce the parties and adverse inference drawn by the Revenue was uncalled for. He further contended that the addition cannot be made on estimation, on assumptions & presumptions and it was brought to the notice of the Court that all the transactions are through brokers and the buyer does not come in picture with the seller. He contended that substantial questions of law arise out of the order of the Tribunal. He relied upon the judgments rendered in the case of Commissioner of Income Tax, Orissa Vs. Orissa Corporation (P) Ltd.: 1986 (Supp) Supreme Court Cases 110; Commissioner of Income-Tax Vs. Inani Marbles P. Ltd. : (2009) 316 ITR 125; Commissioner of Income-Tax Vs. Gotan Lime Khanij Udhyog : (2002) 256 ITR 243. 7. We have heard learned counsel for the appellant, perused the order impugned as well as the orders passed by the lower authorities. 8. During the course of one of the hearing on 26/11/2015, the court on arguments of the counsel that the sellers do exist at the given address and purchases are genuine, the Court wa....
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....e the affidavit simply states "Ghee Walon Ka Rasta, Jaipur" which is incomplete and possibly one could not reach with the address provided by the appellant. These are just a few discrepancies noticed on test check. 11. On perusal of the query of the Court, it is also noticed that the assessee has furnished some confirmations but for the reasons best known to it, none of the sale bills have been placed on record though directed. On reading of the order of CIT(A) and Tribunal, it is apparent that even sale bills have not been produced before the said appellate authorites. It is also a matter of fact that though the claim of the assessee before the authorities and before this Court with vehemence was that all the transactions are through brokers and the parties do not come in picture. However, on a specific query raised earlier, which is reproduced herein before, not a single name and address of any broker and as to how much amount was paid as brokerage has been placed on record to substantiate the claim made before the lower authorities as well as before this Court. 12. During the course of hearing, learned counsel for the assessee has chosen not to place on record copy of the sale....
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....hat the parties either do not exist or have given accommodation entries and to produce the same, the assessee informed that he is unable to produce and the learned AO to take appropriate action at his level. 16. All the three authorities in unison have found this to be a major defect and rejected the books of accounts. 17. Having noticed the above facts, we find that the assessee has not discharged the onus which was casted on him once the parties either were not found existing or the information was received that the parties are providing accommodation entries only. This Court in the case of Venus Arts & Gems Vs. The Income Tax Officer (DB Income Tax Appeal No.582/2011) vide judgment dt. 20/08/2014 has observed that once there is a finding that the parties are non-existent, this by itself is a serious discrepancy and adverse inference can be drawn and it would be appropriate to quote Para 7 of the said judgment which reads ad-infra:- "7. We have already noticed the fact that the A.O. rejected the trading results and invoked the provisions of Sec. 145(3) on the defects noticed by the assessee and in addition to that he came to the conclusion that despite the assessee having bee....
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....est check have been highlighted herein before. 19. This Court in the case of M/s G.B. Impex Vs. Income Tax Officer (DB Income Tax Appeal No.43/2015), decided on 28/04/2016, has taken into consideration various judgments of this Court and other courts in the case of Indian Woolen Carpet Factory Vs. Income Tax Appellate Tribunal & ors.: 2002 CTR 178 (Raj.) 420; Commissioner of Income-Tax Vs. Golecha Properties (Pvt.) Ltd. (In Liquidation): 1997 ITR 227 (Raj.) 391; Commissioner of Income-Tax Vs. Precision Finance Pvt. Ltd.: 1994 ITR 208 (Cal.) 465; V.I.S.P. (P) Ltd. Vs. Commissioner of Income Tax & Anr.: 2004 CTR 186 (MP) 718; Commissioner of Income-Tax Vs. La Medica :2001 ITR 250 (Delhi) 575, has dismissed the appeal of the assessee in that case on the self same controversy involved where also the Tribunal disallowed 15% of the unverifiable purchases. 20. Since the self same controversy as involved in the instant case has already been decided by this Court in the case of M/s G.B. Impex Vs. Income Tax Officer (supra) where this Court has found that no substantial question arise out of the order of the Tribunal and it is a finding of fact which is based on the material on record. In ....