TaxTMI 
TaxTMI 
2018 (10) TMI 1489
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. 39,72,198/- without properly appreciating the facts of the case and the material brought on record. 2. On the facts and in the circumstances of the case, the ld. CIT(A) ought to have upheld the order of the AO. 3. It is therefore, prayed that the order of the ld. CIT(A) may be set aside and that of the Assessing Officer may be restored to the above extent. 4. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary." 3. The solitary issue raised by the Revenue in this appeal is that ld. CIT(A) erred in reducing the addition made by the AO for Rs. 39,72,198/- to Rs. 1,55,020/-. 4. The brief facts as culled out from the records are that the assessee is a private limited company and engaged in the business of buying and selling gold, silver, diamond, and ornaments made out of it. The assessee during the year inter alia has purchased gold/diamond from the following parties: Sr. No. Name of the Party Address Purchase amount Rs. Result of 133(6) issued 1. Shree Mahavir Jewellers Manek Chowk Ahmedabad 12,40,160/- Not Served 2. A Star Jewellery 803, Kalash Enclave, Nr. Ladi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the assessee vide letter dated 01.05.2015. The AO filed the remand report vide office letter No.ITO/Ward- 2(1)(2)/Remand Report/Johrisons/2015-16 dated 06/05/2015, as detailed under: 1. The AO considered the facts of filing the reply of M/s A Star Jewellery vide letter dated 10.03.2014 in response to the notice issued u/s 133(6) of the Act. But the same was disregarded on the ground that same has already been considered during the assessment proceedings. 2. The purchases shown by the assessee from M/s. Shree Mahavir Jewellers are bogus due to the fact that the VAT registration of M/s. Shree Mahavir Jewellers has already been cancelled as evident from the website of Gujarat Commercial Tax Department. 3. The bills issued by M/s. Shree Mahavir Jewellers are handwritten, and without any signature, therefore, same cannot be treated as genuine. 4. There is no signature on the bills issued by the M/s. Shree Mahavir Jewellers evidencing the person who has received the goods. 5. There was no mention in the bills of M/s. Shree Mahavir Jewellers describing the goods purchased and sold. 6. There was no stock register produced by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....remand report of the AO has admitted the additional evidence filed by the assessee under the rule 46A of the IT rule. The ld. CIT(A) while attempting the additional evidences file by the assessee has put his reliance on the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Kamlaben Sureshchandra Bhati reported in 44 Taxamnn.com 459, wherein it was held as under: "4. In our view, CIT [A] committed no error nor the admission of additional evidence can be stated to be in breach of the requirement of Rule 46A of the Rules. Particularly when the interest of the Revenue was safeguarded by calling for the remand report and permitting the Assessing Officer to comment on such additional evidence, we see no reason to interfere." The ld CIT(A) after considering the submission of the assessee and remand report of the AO has granted relief to the assessee in part by observing as under: "2.9. It has been noticed that from M/s. A Star Jewellery the appellant has made the purchases of Rs. 27,32,038/- on the various dates starting from 02/04/2010 to 19/01/2011. Likewise, the appellant has also made the payment to the aforesaid party starting from 12/04/2010 to 01/03....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g evidences in the form of delivery notes / any evidence in respect of movement of the goods etc. Thus, the claim of the appellant is not verifiable. The AO in the remand report has also observed that the VAT registration of the aforesaid party was already cancelled by the Gujarat Commercial Tax Department which also creates suspicion over the veracity of the transactions having carried out by the aforesaid party. It has also been noticed that the sales bill issued by M/s. Shree Mahaveer Jewellers did not bear the signature of the supplier party, thus, these purchases could not be said to be fully verifiable as the purchase bills did not authenticate the actual purchases. Even the signature of the person to whom delivery of the aforesaid goods made did not appear on the bills. There was not a single rupee transaction through cheques / bank account which could at least authenticate the transactions having been carried out between the appellant and the aforesaid party. 2.11. In view of the aforesaid discussion, the purchases shown by the appellant from M/s. Shree Mahavir Jewellers could not be said to be fully verifiable, and therefore, in view of the judgm....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., and it is not possible to say as to what extent latter has influenced its mind, the finding is vitiated because of use of irrelevant material. That gives rise to a question of law. Hence, the Tribunal had no material to come to the conclusion that the impugned sum could not be treated as the assessee's income from undisclosed source." The ld. DR also relied on the order Jaipur Tribunal in the case of Khandelwal trading company Vs. ACIT reported in 55 TTJ 261. On the other hand, Ld. AR before us filed a paper book, which is running from pages 1 to 87 and reiterated the submission as made before the ld. CIT(A). 6. We have heard the rival contentions and perused the materials available on record. In the instant case, the addition was made by the AO on account of purchases made from the parties as discussed above. In fact, the notice u/s 133(6) were issued to the above-stated parties for confirmation, but none of the party has replied in response to the notice u/s 133(6) of the Act. However, we note that the reply from M/s A Star Jewellery dated 10.03.2015 was duly filed before the AO prior to the completion of the assessment u/s 143(3) of the Act. But the AO has....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. Sathyanarayan P. Rathi reported in 351 ITR 150. The relevant extract of the order is reproduced below: "6. The present case, thus, being one of only purchase but not from disclosed sources, it would be only profit element embodied in such purchase which could be added in the income of the assessee and thus, rightly so done by the Commissioner (Appeals) and the Tribunal. 7. If this be our conclusion, only question arises whether such profit element should be estimated at the rate of 30% or 12½%. Whenever such a question arises, some reasonable estimation is always permissible. Hardly any question of law on such aspect would arise. Merely, it is pointed out that the assessee was a trader and that the Tribunal retained 12½% of the purchase towards its possible profit, we do not find any reason to entertain the appeal. In the result, Tax Appeal is dismissed." Besides the above, we also find important and relevant to reproduce the provision of Section 68 of the Act which reads as under: Cash credits. ^56 68. ^57 Where any sum is found credited in the books 58 of an assessee maintained for any previous year, and the assessee offe....