2018 (3) TMI 730

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....O Ward-1, Beawar issued show cause for addition on 13.12.2016, but assessment was already completed on 06.12.2016 (before issuance of the show cause), which is against the principle of natural justicesuch addition is unwarranted, unjustified & bad in law in the eyes of law. Ground No. 2: disallowance of loss for Rs. 54,43,913/-: * The Learned CIT(A), not justified in stating that the claim of loss on the basis of unverifiable purchases is held to be bogus. * The Learned CIT(A), not considered the fact that assessee does not have control on the suppliers of the goods after 3-4 years of transaction, payment by banking channel, nexus of purchase and sales, definition of profit included the loss. * The Learne....

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....Income Tax Act to the assessee and recorded the statement which has been reproduced in the assessment order. After conducting the investigation through ADIT, Surat the AO held that the purchase and sale transactions of diamonds during the year under consideration are bogus and accordingly, the AO made an addition equivalent to 15% of the purchases amounting Rs. 61,45,937/-. The assessee challenged the action of the AO before the ld. CIT(A) who has confirmed the addition made by the AO for want of any verifiable evidence. 3. Before the Tribunal, the assessee filed an application for admitting the additional evidence under rule 29 of the Income Tax Rules, 1963. The ld. AR of the assessee has submitted that the AO and ld. CIT(A) has conclud....

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.... 38 * CIT vs. Text Hundred India (P.) Ltd. 197 Taxman 128. * CIT vs. Gani Bhai Wahab Bhai 97 taxman 310. 4. On the other hand, ld. DR has submitted that the assessee has never done any business of trading of diamonds and was doing some job of accountancy. Neither in earlier years nor in the subsequently years the assessee has carried out any trading of diamonds therefore, the transactions during the year are not genuine as the only purpose to show the trading in diamonds is to setting of the bogus loss against the short term capital gain arising from sale of flat. Thus, the ld. DR has submitted that it is admitted case that the assessee has never done any business activity except during the year under consideration that too only....

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....ot disputed that the assessee has made 5 purchases and 7 sales transactions only with two parties each for purchases and sales. To verify the genuineness of the transactions and particularly in view of the facts that the assessee has claimed loss of Rs. 54,43,913/- to be set off against the short term capital gain the AO conducted the enquiry and investigation through ADIT, Surat as these two parties namely M/s Makoda Exim Pvt. Ltd. and M/s Pulkit Impex Pvt. Ltd. were stated from Surat. Even the notices issued u/s 133(6) were received back with the postal remarks the parties were not available at the given address. The AO issued commission u/s 131(b) of the I.T. Act to the ADIT investigation, Surat to verification the genuineness of the tra....