TaxTMI 
TaxTMI 
2020 (10) TMI 1087
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....made when the Assessing Officer had made the trading additions without invoking provisions of Section 145. 2. That the ld. A.O. had erred at law as well as on facts in arbitrarily treating purchases made from Maximus Gems, Surya Diam and Navkar India of Rs. 71,32,000/-, Rs. 10,09,250/- and Rs. 9,01,600/- respectively in total of Rs. 90,42,850/- are non-verifiable purchases and the ld. CIT(A) also erred in confirming that the purchases made from these parties are non-verifiable. 3. That the ld. A.O. had erred at law as well as on facts in taking 25% of the value of total purchases of Rs. 90,42,850/- being Rs. 22,60,712/- as trading addition and the ld. CIT(A) has erred in confirming the trading addition of Rs. 10,00,000/- a....
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....ad addressed the submissions on behalf of the revenue and relied upon the impugned order passed by the ld. CIT(A) and also relied upon the decision of the Hon'ble Supreme Court in the case of C. Vasantlal & Co. Vs CIT 45 ITR 0206. 8. We have heard the ld. DR and have also gone through the written submissions filed by the assessee. We have also deliberated upon the decisions cited in the orders passed by the authorities below as well as cited before us and we have also gone through the orders passed by the revenue authorities. Before we decide merits of the appeal, it is necessary and imperative to evaluate the order passed by the ld. CIT(A) while disposing of the appeal. The ld. CIT(A) has discussed the grounds raised by the assessee in ....
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....nvestigation Wing, Mumbai that the purchases made by the assessee from the firms namely M/s Maximus Gems, Navkar India and M/s Surya Diam are not genuine purchases as the person on whose premises, search was conducted had affirmed in their statements recorded U/s 132(4) of the Act that they have not sold the goods to the assessee but had provided bills and after receipts of the payments of bills, the same were refunded back in cash to the parties. Therefore, on the basis of investigations carried out by the Investigation Wing, Mumbai as well as on the basis of statements recorded U/s 132(4) of the act whereas it was categorically admitted by Shri Bhanwal lal Jain that no goods were sold to the assessee but they had only provided accommodati....
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....ect of material collected by him and had also provided adequate opportunity to the assessee of explaining the same. Even otherwise, from the records, we also noticed that in the statement of Shri Bhanwal Lal Jain recorded U/s 132(4) of the Act, it was specifically admitted that they were involved in providing bogus entries by issuing accommodation bills. The relevant portion is reproduced below: "Q-16 In his statement recorded u/s 131 of IT ACT, 1961 on 05.10.2013, Lunkaran Parasmal Kothari has stated that Import of Diamond in the concerns managed and controlled by you, is made on behalf of certain local parties who do not wish to show such imports in their books of accounts. On receiving the consignment the material is handed over....
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....o real importer out of books. However, in the books of the concerns managed and controlled by me and my son sh. Rajesh Jain, the said consignment still appear as stock since the material has been sold to the real importer out of books. To show sale against the bogus stock outstanding in your books, bogus sale bill are issued to parties against their purchase made in cash. These parties who take accommodation entries from your concerns make payment through RTGS. This RTGS is in turn used to make payment to the foreign parties from whom import has been made. The parties who have been given payment for such bogus purchase through RTGS want their cash back. In the meantime, the real importer on whose behalf import has been made, makes the payme....