AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 1690
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....bogus purchases." 2. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering that the addition was made on the basis of information received from the DGIT(Inv.), Mumbai, with regard to bogus purchases made by the assessee that all the concerns controlled and managed by them are not doing any real trading in diamonds but indulged in paper transactions only." 3. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not considering that the hawala dealers have admitted before the Investigation wing the modus operandi followed by the above group by the key persons of the group in their statements recorded on oath." 4. "On the facts and in the circum....
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....ciates. During the course of search, Rajendra Jain Group had admitted that they were indulged in issuing bogus bills without their being any business activity. Based on the said information, the case has been reopened u/s 147 of the Act and issued notice u/s 148 of the Act. In response to notice u/s 148 of the Act, the assessee filed letter dated 16/04/2015 and submitted that return of income filed on 09/09/2008 for AY 2008-09 may be treated as return filed in response to notice u/s 148 of the Act. Thereafter, notice u/s 143(2) and 142(1) of the Act, along with questionnaire were issued. In response to notice, the Ld. AR of the assessee, filed various details as called for. In order to verify the genuineness of transaction, the AO issued no....
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....id evidence cannot be treated as accommodation entries. The assessee further submitted that the assessee is in the business of diamond trading, where the profit margin is varies 1 to 3 % and this fact has been further strengthened by the report of task force group of diamond industry, constituted by Govt. of India. After considering the BAP scheme as per which the task force has estimated gross profit of 2 to 3% for manufacturing activity and 3% for trading schemes. 4. The CIT(A), after considering relevant facts and also by taking other facts including VAT rate applicable on diamond products, directed the AO to sustain 3% profit on alleged bogus purchases from concerns which are operated and controlled by Rajendra Jain Group. Relevant ob....
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....Rs. 86,80,048/-. This ground is partly allowed." 5. The Ld. DR, submitted that the Ld. CIT(A) was erred in scaled down the addition made towards alleged bogus purchases from firm controlled by Rajendra Jain Group without appreciating the fact that Rajendra Jain p himself, during the course of search, admitted that he is indulged in providing accommodation entries without actual delivery of goods and this fact was further strengthened by enquiries conducted by the AO where he had conducted independent enquiries as per which none of the parties replied to notices issued u/s 133(6) of the Act, therefore, there is no reason for the Ld. CIT(A) to go on the basis of VAT rate applicable to the diamond industries as well as BAP scheme which are r....
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.... of provisions of section 69C of the Act in light of the decision of ITAT Mumbai Bench, in the case of DCIT vs M/s R.R. Oomerbhoy Pvt. Ltd. and submitted that when sufficient evidence are filed to prove the purchases, no additions could be made u/s 69C of the Act. 6. We have heard both parties, perused the material available on record and gone through the orders of the authorities below. The facts brought out by the AO in the context of DGIT(Inv.) report and also statement of Shri Rajendra Jain, during the course of search proceedings, in his case were not fully controverted by the assessee with any evidence. It is also an admitted fact that the parties from whom purchase of materials stated to have been made by the assessee are not respo....
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.... the considered view, it is difficult to accept the version of the AO that purchases from above parties are bogus in nature which are not supported by valid evidence. Under these facts, the only option left for the authorities is to settle the controversy by estimating income of the assessee from these kind of transactions. The assessee contended that profit percentage in diamond trade varies from 1 to 3% and also VAT rate applicable for diamond products is at 1%, considering these facts, the assessee argued for reasonable estimate of profit on alleged bogus purchases and also as per the Ld. AR for the assessee whatever percentage estimated by the Ld. CIT(A) is quite reasonable, there is no reason to deviate from the percentage of profit ad....