TaxTMI 
TaxTMI 
2018 (10) TMI 1489
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....ts 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. Ladies Hostel, Navrangpura, Ahmedabad. 27,32,038/- Not Served 39,72,198/-  ....
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....ns/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 assessee during the remand proceeding. However, the assessee in his rejoinder dated 19.05.2015 submitted as under: 1. The books of accounts were duly audited under the Companies Act....
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....e 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 01/03/2011 through cheques. Further, there was opening balance payable by the appellant as on 01/04/2010 at Rs. 8,84,688/- with the closing balance payable as on 31/03/2011 at Rs. 14,99,059/-. It has been noticed that the appellant has made the payment through account payee cheques at 15 occas....
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....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 judgments / decisions of the Hon'ble Courts cited below, the disallowance of the purchases to the extent of 12.5% is found correct and justified and the same is confirmed which comes to Rs. 1,55,020/-. Relief is granted for the balance amount." Being aggrieved by order of ld. CIT(A) Revenue is in appeal before us. The ld. DR b....
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....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 not considered the same during the assessment proceedings. Similarly, the AO has not commented anything negative about the reply filed by the A-Star Jewellery during the remand proceedings. Therefore, in the absence of any defect as pointed out by the AO, we are inclined not to interfere in the order of ld. CIT(A). Similarly, we note that the assessee has shown purchases and ....
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....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 offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the 59 [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The provision of Section 68 can be attracted if there is any sum found credited in the books of accounts of the assessee. The term sum denotes to the cash received by ....