2018 (5) TMI 2039

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....g grounds relate to the addition of Rs. 35.28 lakhs relating to alleged bogus purchases. 3. The assessee is a partnership firm and is engaged in the business of manufacture and export of diamond studded jewellery. The assessing officer received information that one Shri Praveen Kumar Jain and his group of companies were engaged in providing only accommodation bills without actually supplying materials. It was noticed that the assessee has purchased diamonds from a concern named M/s Mohit International belonging to Praveen Kumar Jain group. Hence the AO re-opened the assessment. 4. During the course of assessment proceedings, the AO issued notice u/s 133(6) of the Act to M/s Mohit International, but the same was returned unserved. The ....

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....d concern, his retraction statement. The assessee submitted that the AO was not correct in observing that it did not maintain stock register. The assessee submitted that it has maintained stock register and the auditor has only reported that he has not examined the same. The Ld CIT(A) refused to accept the additional evidences and also did not accept other contentions of the assessee. Accordingly he confirmed the addition. 7. The Ld A.R submitted that the assessee has discharged the initial burden of proof placed upon it to prove the genuineness of purchases. He submitted that the assessee has furnished invoice copies, payment details, quantity details etc. to prove the purchases. He submitted that the diamonds purchased from M/s Mohit I....

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....bmitted that Shri Nilesh Parmar has retracted from his statement. 9. On the contrary, the Ld D.R strongly placed reliance on the order passed by Ld CIT(A). 10. We have heard rival contentions and perused the record. The assessee is engaged in the business of manufacture of diamond jewellery. We notice that the assessee has reconciled the purchases and sales, i.e. the assessee has shown that the diamonds purchased from M/s Mohit International has been consumed and the jewellery has been exported to Hong Kong. The Ld A.R also took us through the reconciliation statement furnished before the tax authorities. For instance, the assessee was having opening stock of 23.56 carats of diamonds as on 01-04-2006. It purchased diamonds weighing 60....