TaxTMI 
TaxTMI 
2021 (2) TMI 473
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....her for adjudication for the sake of convenience. 3. The revenue has raised the following grounds: - "1 Whether on the facts and circumstances of the case and in law, the Id. CIT(A) justified in restricting the disallowance to 4% of the alleged purchases of Rs. 3,50,49,136/- against the addition of Rs. 3,50,49,136/- made by the AO on account of Unexplained investment u/s 69C of the IT Act. 1961. ignoring the fact that credible information was received from the office of Director General of Income Tax (Investigation), Mumbai in respect of Search & Seizure action u/s 132 of the IT Act. 1961 conducted on Shri Jain Group? 2. Whether on the facts and circumstances of the case and in law, the Id. CIT(A) justified in restricting the disallowance to 4% of the alleged purchases of Rs. 3,50,49,136/-. ignoring the fact that, during the assessment proceedings, the assessee could not substantiate the transactions made with the concerns of Shri Jain Group? 3. The appellant prays that the order of the Ld. CIT(A) on the above grounds be set aside and that of AO be restored. 4. The appellant craves leave to amend or alter any ground or add a new ground which m....
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....dation bills for purchase, unsecured loan Share capitals, etc. The search & seizure action resulted in to conclusively proving that Shri Rajendra Jain Group, Sanjay Choudhary Group & Dharmichand Jain Group through a web of concerns run, operated and controlled by the group are engaged in providing accommodation entries in the nature of accommodation bills for purchase without supplying goods. Shri Rajendra Jain Group, Sanjay Choudhary Group & Dharmichand Jain Group in their statement recorded u/s 132(4) / 131 has admitted that they are providing only accommodation bills and not carrying out any genuine business activity through all the concerns controlled and managed by Rajendra Jain. The search 86 seizure action revealed that the assessee Shri Vikas Jayantilal Solanki, PAN AAEPS4197A, has taken accommodation entries for the purchase from the following concerns of the Rajendra Jain Group. Name of the bogus concern Director/Partner of the bogus concern PAN of the beneficiary Name of the beneficiary Amount Maniprabha AAEPS4197A Vikas Jayantilal Solanki 1,77,92,384 Kangan AADCK2552R AAEPS4197A Vikas Jayantilal Solanki 90,49,759 Dh....
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.... Ans. Yes. I confirm that my concerns viz. a) Maniprabha Impex Pvt. Ltd., b) Kangan Jewels Pvt. Ltd. & iii) Dharam Impex are engaged in paper transactions for the purpose of purchase bills, accommodation entries and on behalf of actual importer of diamonds. I also confirm that these imports are settled in cash through Hawala transaction or by squaring of related concerns of foreign party in India. Q.31. Do you issue bills/accommodation entries for a commission to various parties, who purchase diamonds in cash from undisclosed parties and need bills to show purchase against sales in their accounts? Ans. Yes. My concerns are providing bills/accommodations entries for commission to few parties for their purchase account: Q.32 Do you providing cheque/loan against cash from builders/persons dealing in real estate. Ans. Yes, I confirm that my concerns are providing cheque/loan entries to only two builders/persons dealing in real estate against cash & they are: (a) Vivek A. Shah, Mumbai Q.33 Whether you are importing diamond on behalf of actual importer who does‟t want to show import in their books of account. ....
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....r concerns. Please confirm the same. Ans. Yes, I do confirm the contents of answer to Q.No. 30 of the statement recorded on 04/05.10.2013. The modus operandi involved in our business as explained in detailed as under: The diamonds are imported from outside India in the name of my company / proprietorship / HUF, but the actual order is placed by some other person. We (through our companies and various concerns) are merely doing the paper transactions instead of carrying out any real business of diamond trading. This is called Chopdeka Dhandha in common parlance, because books of accounts are called "chopda‟' in Marwari language. We actually do business of maintaining 'books of accounts' only and do not do any actual trading of physical commodity i.e. diamonds. In this process, we actually earn commission on IMPORT OF GOODS which is our income and I incur expenses such as foreign exchange fluctuation gain / loss and other requisite expenditure. The commission on import of goods is very nominal and ranging between 0.05% to 0.10% on imports. The commission income has been shown as Gross Profit in my books and offered for taxation in the returns of in....
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.... (first), we again import on longer period of credit basis (second), which was again sold immediately and payment received against such import (second) gets used for making import remittance (first). In this way we generate cheques for giving loans to various parties. We receive cash from loan parties against the cheque given to them. The cash is used to settle the accounts to whom we have sold the goods through angadia. We receive interest on such loan which we return it back in cash after deducting our commission @ 6.5% per annum on loan amount. I further state that I received Sale Considerations immediately in some instances whereas, payment for import was 10 be mace after availing longer period of credit. Therefore, I always have 5uine surplus funds which are known as circulating capital that I have used for giving above loans and advances to my family members and close friends from our group companies. We also export diamonds at the request of actual importers. These parties arrange actual stock of diamonds for export through us. We receive export proceeds on behalf of these Importers. Thereafter on receipt of export proceeds, we make import remittance at the instruct....
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....(Inv.), Mumbai in which it was conveyed that the assessee has taken the bogus purchase entries from the above mentioned parties. The total bogus purchase was in sum of Rs. 3,50,49,136/-. After the receipt of information, the AO issued the notice u/s 131 of the Act to Shri Dharmchand S. Jain proprietor of the M/s. Maniprabha Impex Pvt. Ltd., M/s. Kangan Jewels Pvt. Ltd. and M/s. Dharam Impex who got recorded the statement on 28.11.2017 in which he stated that he was doing genuine business with the assessee and also produced the necessary documents in support of the claim. However, the assessee is claiming the purchases as genuine and also furnished the necessary documents. The CIT(A) relied upon the statement of Shri Dharmchand S. Jain proprietor of above mentioned three entities got recorded on 03.10.2013 which was retracted on 08.10.2013 and 15.01.2014 in connection with the M/s. Maniprabha Impex Pvt. Ltd., M/s. Kangan Jewels Pvt. Ltd. and M/s. Dharam Impex. The assessee produced the ITR which lies at page no. 45 of the paper book, copy of purchase invoices which lies at page no. 46 to 53 of the paper book, Account confirmation which lies at page no. 54 to 57 of the paper book, Ba....
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....oviders operating in Mumbai, indulging in providing accommodation entries in the nature of accommodation bills for purchase, unsecured loan Share capitals, etc. The search & seizure action resulted in to conclusively proving that Shri Rajendra Jain Group, Sanjay Choudhary Group & Dharmichand Jain Group through a web of concerns run, operated and controlled by the group are engaged in providing accommodation entries in the nature of accommodation bills for purchase without supplying goods. Shri Rajendra Jain Group, Sanjay Choudhary Group & Dharmichand Jain Group in their statement recorded u/s 132(4) / 131 has admitted that they are providing only accommodation bills and not carrying out any genuine business activity through all the concerns controlled and managed by Rajendra Jain. The search & seizure action revealed that the assessee Shri Vikas Jayantilal Solanki, PAN AAEPS4197A, has taken accommodation entries for the purchase from the following concerns of the Rajendra Jain Group. Name of the bogus concern Director/Partner of the bogus concern PAN of the beneficiary Name of the beneficiary Amount Maniprabha AAEPS4197A Vikas Jayantilal Solanki 1,77,92,3....