AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (5) TMI 570
X X X X Extracts X X X X
X X X X Extracts X X X X
....r who was intercepted in Mumbai Airport carrying the gold ornaments weighting 3500 gm (approx.) from Mumbai to Chandigarh by Flight No. IT 3185 as declared by him, the gold ornaments were purchased from the assessee company. In order to verify the claim of the said passenger, the verification u/s 131 of the Act and sworn statement of Shri Pankaj Kumar H. Jagawat, Director of assessee company were record. 4. During the course of assessment proceedings, assessee was asked why, the jewellery of 3500 gm sold to SBM jewelers should not be added as income of the assessee as the same is not recorded in sales register on the day of verification u/s 131 of the Act. Further stock of jewellery of 3863.697 gms was physically found on the day of verification and taking into consideration the list of cancelled bills in the possession of the assessee, why the stock of jewelery of 3863.697 gms should not be considered as income of the assessee. 5. In response, assessee submitted that the sales to M/s SBM Jewellers covering gold jewellery of 3500 gms was duly recorded in the books of accounts on the day of verification u/s 131 of the Act and the physical stock of 3863.697 gms found during ver....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hree Mangal Jewels Pvt Ltd Rs. 3,72,80,121/- M/s. Hemratna Jewellers Rs. 1,72,45,231/- M/s. Shiv Jewellers Rs. 45,83,292/- M/s. Bhatia & Co Rs. 45,01,411/- M/s. Sajawat Jewellers Rs. 23,41,657/- M/s. L K Jewellers Rs. 2,11, 22,7807- M/s. V K Bangles Rs. 30,19,608/- Total Rs. 9,92,85,783/- 7.4 The total value of sales of the alleged tax invoice are Rs. 9,92,85,783/-, whereas AO has wrongly estimated Rs. 9,79,35,783/-. Assessee submitted before Ld. CIT(A) that AO estimated gross profit of Rs. 48,96,789/- which is 5% of the alleged unaccounted sales. In support of its contention, assessee submitted a detail submission on sales of various parties which are given below:- M/s. SBM Jewellers: The Id AO has estimated GP @ 5% on alleged sales of Rs. 91,91,683/- affected to M/s. SBM Jewellers. The appellant has sold jewellery weighing 3500.260 gms vide its Tax Invoice No. um/02/196 dated 14th February, 2012 to M/s. SBM Jewellers for Rs. 91,91,683/- (Page 9 of paper book) From the copy of the impounded Sale Register as provided by the AO it can be seen that the said Tax Invoice [No. Mum/02/196 dated 14th Febru....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of GP on this count may be deleted. M/s. Bhatia & Co: The Ld AO in his order has estimated GP @ 5% on alleged sales of Rs. 45,01,411/-affected to M/s. Bhatia & Co. The appellant has sold jewelers worth Rs. 4,99,339/- only on 12th October, 2011 to M/s. Bhatia & Co. Except this sale no other sale was affected to M/s. Bhatia & Co. It has also undertaken Labour Job to make jewellery for M/s. Bhatia & Co. This can be seen from the copy of account of the appellant as appearing in the books of M/s Bhatia & Co for the year under consideration (Page No 28 of Paper Book) Thus the appellant has not affected alleged sales to M/s. Bhatia & Co. It is therefore humbly prayed that the addition of GP on this count may be deleted. M/s Sajawt Jewellers: The Id AO in his order has estimated GP @ 5% on alleged sales of Rs. 23,41,657/-affected to M/s. Saiawat Jewellers. The appellant has undertaken only Labour Job to make jewellery for M/s. Sajawat Jewellers. This can be seen from the copy of account of the appellant as appearing in the books of M/s. Sajawat Jewellers for the year under considera....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at Source as per applicable provisions and rate. During the year under consideration it has paid interest of Rs. 2,25,000/- & Rs. 3,60,000/- to M/s. A2 Jewels & M/s. Maximum Gems. After deducting tax at source a sum of Rs. 2,02,500/- & Rs. 3,24,0007- was credited to the accounts of M/s. A2 Jewels & M/s. Maximum Gems respectively. The assessee has furnished necessary confirmations from the respective parties alongwith copies of acknowledgements of filing of return of income by them & their bank statements /pass books in support of the deposits during the course of assessment proceedings. While framing the order u/s. 143(3) of the I T Act, the AO has added a sum of Rs. 70,85,000/- (Principal Rs. 65,00,000/- & Interest thereon of Rs. 5,85,000/- for the year) being bogus loans. The AO then rectified his order u/s. 143(3) dated 25th March, 2015 by order u/s. 154 of the I T Act dated 17th March, 2016 deleting the addition of Rs. 65,00,000/- being the principal amount of loans and retaining the addition of Rs. 5,85,000/- being interest on such loans for the year (Page No. 33 of Paper Book). The principal amount of Rs. 65,00,000/- has b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he circumstances of the case and in law, the learned CIT(A) erred in deleting the addition without appreciating the fact that as per Page No.3, 4 & 5 of Annexure-A-1 of impounded material wherein details of cash receipts and expenditure of the company are mentioned proves that cash sales have been made by the assessee out of the books." 3. "On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 5,85,000/- constituting interest on bogus loans and advances made by the AO without appreciating the fact that the entry of these unsecured loans and advances in the books of accounts are bogus accommodation entries which has been provided by Mr. Bhanwarlal Jain Group in F.Y. 2009-10 pertaining to A.Y.2010-11." 4. "On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition without appreciating the fact that the appeal of the assessee for the A.Y.2010-11 in respect of bogus unsecured loans and advances is pending before the learned CIT(A) for adjudication." 5. " The appellant prays that the order of the CIT(A) on the above grounds be set aside and tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....minor variation and the same were already disclosed as stock in trade in the books of accounts maintained by the assessee. 11.3 With regard to ground no. 3 & 4, he brought to our notice the alleged bogus loans and advances taken by the assessee from M/s A2 Jewellers and M/s Maximus Gems were added twice by the AO for which AO has already passed rectification order u/s 154 of the Act rectifying the above addition. 11.4 With regard to addition on interest payment of above said loan, he agreed that above said loans were taken in the AY 2010-11 and assessee is in appeal against the above said order and he submitted that transaction is genuine and interest payment is against the above said loan. 12. Considered the rival submissions and material placed on record, we notice from the record that revenue is in appeal against the relief given by Ld. CIT(A) to the assessee and revenue has raised before us mainly 4 grounds. 12.1 With regard to ground no. 1, addition of Rs. 91,91,683/- on account of peak investment with regard to interception of gold jewellery in Mumbai airport which was sold to M/s SBM Jewellers, we notice that interception of above said jewellery was made on 14.02....