2020 (9) TMI 607

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....rred in enhancing the addition to Rs. 93,04,866/- / as against the addition made by the Ld. AO of Rs. 9,30,487/- which itself is erroneous and ought to be deleted". 3. The brief facts of the case are that the assessee is an individual engaged in the business of trading in Gold Ornaments in the name and style M/s. Vijay Jewellers, filed his return of income for the AY 2009-10 on 23/09/2009 declaring total income of Rs. 9,76,501/-. Thereafter, a search and seizure operation U/s 132 of the Act was conducted in the case of Shri Rajendra Jain, Shri Sanjay Chowdhary and Shri Dharmi Chand on 3/10/2013 by the DGIT (Inv.), Mumbai. During the course of survey proceedings, it was revealed that these individuals were providing accommodation entries ....

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....nced by proper bills and vouchers. It was therefore pleaded that the addition cannot be simply made on the basis of presumptions by treating the transactions to be bogus. The Ld. AR further relied on the decision of the Hon'ble High Court in the case Pr. CIT vs. Tejua Rohit Kumar Kapadia in Tax Appeal No. 691 of 2017, dated 18/09/2017, and the order of the Hyderabad Bench of the Tribunal in the case of Musaddilals Jewellers India Pvt Ltd and pleaded that when the assessee has produced proper bills and vouchers for the purchases and when the payments for the same were made through the banking channel, then the purchases made by the assessee cannot be treated as bogus transactions and the addition made by the Ld. AO which was further enhanced....

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....hrough cheque alone will not establish that the transactions are genuine. Therefore, the Ld. AO was right in relying on the decision of the Hon'ble Apex Court in the case of M/s. Kachwala Gems vs. JCIT and other various decisions of the Tribunal cited in his order and estimating the additional income of 10% on the bogus purchases made from the grey market which works out to Rs. 9,30,487/-. However I am of the view that the order of the Ld. CIT (A) to enhance the addition by treating the entire bogus purchases as the income of the assessee is not appropriate because it is evident that the assessee had made purchases apparently from his accounted money as the payments have made through banking channels. Further it is also a fact that th....