TaxTMI 
TaxTMI 
2017 (9) TMI 1343
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....earned Commissioner (Appeals) erred in confirming the addition of Rs. 19,16,509/- computed @ 3% on VAT paid purchases of Rs. 6,38,83,622/- from Mumbai parties and Rs. 1,07,10,438/- computed @2% on purchases of Rs. 53,55,21,911/-from Surat and against 'H' Form affected from allegedly bogus parties as against addition of Rs. 4,79,52,443/-computed @ 8% of such purchases is done by the learned AO. The balance addition of Rs. 1,26,26,47/- confirmed by the learned Commissioner appeal(Appeals) be deleted and assessed income be reduced accordingly. 2. The revenue its appeal has raised following grounds of appeal; (1) On the facts and circumstances of the case and in law, whether the learned Commissioner (Appeals) was correct in reducing the add....
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.... account of bogus purchases was restricted to 2% purchases from Surat and on purchases against Form 'H', and at the rate of 3% purchases at Mumbai. Thus, further aggrieved by the order of Commissioner (Appeals) both the parties are file their Cross-appeals raising the grounds of appeal as referred above. 4. We have heard ld AR of the assessee and ld DR for the revenue and perused the material available on record. The learned AR of the assessee argued that assessing officer has not made an independent enquiry before making addition. The addition was made only on the basis of third-party information. It was argued that that said parties are assessed with different assessment authorities and the books of accounts of all those parties are also....
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.... that a search and seizure action as well as survey operation was conducted on 3 October 2013 by the Investigation wing of the Department in case of Shri Bhanwarlal Jain. During the course of search and survey operation, it was found that several name lending company Directors, Partners, Proprietor's of various concern belongs to the native place of Bhanwarlal Jain and his family. This fact was admitted by those parties in their statement recorded during the course of search operation under section 132. In the statements the Directors / Proprietors and partners have also admitted that they made accommodation entries of purchases from six of those dummy concern in the name of M/s Mayur Exports, Prime Star, Mohit Enterprises, Abhinam Gems, Pa....
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....e of the beneficiaries of the accommodation bills. The assessing officer on the basis of GP and NP margin made the addition at the rate of 8% of the total of the impugned purchases from six alleged hawala dealers. The assessing officer made the addition at the rate of 8% of the alleged bogus purchases from the hawala dealers. The assessing officer made the addition holding that the material purchases from the hawala parties have been entered into stock register and the assessee has shown the corresponding sale against the said purchases. This fact could only lead to the fact that Diamonds were bought by the assessee from grey market (which is a common practice prevalent in Surat and Mumbai). The assessee to adjust the transaction into the b....
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....assessing officer before making disallowances. The additions are based on estimation basis. We are of the considered opinion that under Income Tax Act only real income can be taxed by the Revenue. We may further note that even in cases where the whole transaction is not verifiable due to various reasons, the only taxable is the taxable income component and not the entire transaction. The Hon'ble Bombay High Court in the case of "CIT vs. Hariram Bhambani" in ITA No.313 of 2013 decided on 04.02.15 held that the Revenue is not entitled to bring the entire sales consideration to tax, but only the profit attributable on the total unrecorded transaction can be subject to income tax. After considering the facts and rival contentions of the parties....