TaxTMI 
TaxTMI 
2021 (8) TMI 859
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.... in the circumstances of the case and in law, the Id. CIT[A), having allowed certain relief, erred in confirming the addition to the extent of Rs. 7,95,773/- made by the AO to the income of the Appellant on account of possible profit element to the extent of 3% embedded in purchases made from alleged non-genuine parties on the basis of information received from DGlT(Inv.) Wing, Mumbai. (b) The Id, CIT(A) failed to appreciate that :- (i) all the purchases are genuine beyond doubt and supported by sufficient materials; (ii) every purchase is backed by corresponding sale; (iii) the gross profit ratio shown by the Appellant is quite reasonable; (iv) the payment of purchases are made by account payee cheques only; and (v) nothing h....
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.....Y. 2013-14 on 21.09.2013, declaring an income of Rs. 10,37,450/-. The return of income filed by the assessee firm was initially processed as such u/s 143(1) of the Act. Subsequently, the case of the assessee firm was selected for scrutiny assessment u/s 143(2) of the Act. 3. During the course of the assessment proceeding, the A.O was in receipt of information from the DGIT(Inv.), Mumbai, wherein it was conveyed that search and seizure proceedings conducted on Shri Bhanwarlal Jain and his group concerns had revealed that the assessee as a beneficiary had obtained accommodation entries of bogus purchase of Rs. 2,65,25,767/-, as under: Name of the hawala parties Amounts(in Rs.) Prime Star 2,15,16,029/- Mohit Enterprises 50,09,738/- To....
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....purchases was liable to be restricted only to the extent of the profit which the assessee would had made by procuring the goods in question at a discounted value from the open/grey market. Quantifying the said profit element @ 8% of the value of the impugned purchases of Rs. 2,65,25,767/-, the A.O made an addition of Rs. 21,22,061/- in the hands of the assessee. 4. On appeal, the CIT(A) observing that the net profit in diamond manufacturing was in the range of 1.5% to 4.5%, while for that in diamond trading was in the range of 1% to 3%, therefore, scaled down the addition to 3% of the value of impugned purchases. Accordingly, the CIT(A) restricted the addition to an amount of Rs. 7,95,773/-. 5. The assessee being aggrieved with the order ....
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.... were furnished with the A.O. Our attention was drawn by the ld. A.R to the "affidavits" of the proprietor/partner of the aforesaid parties, viz. (i). M/s Mohit Enterprises; and (ii) M/s Prime Star, at Page Nos. 137 -140 of the APB. It was submitted by the ld. A.R that now when the assessee had substantiated to the hilt the authenticity of the purchases made from the aforementioned parties, therefore, there was no justification on the part of the lower authorities to have made/sustained any part of the disallowance qua the purchases in question. In order to buttress his aforesaid claim reliance was placed by the ld. A.R on the order passed in the case of its sister concern, viz. M/s Sejal Exports (India) & Ors. Vs. DCIT, Central Circle-1(2)....
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....assessment order, we find that the A.O had dedicated his entire efforts towards demonstrating at length the modus operandi that was generally adopted by accommodation entry providers a/w the facts attending to their dummy businesses. As observed by us hereinabove, the assessee in the course of the assessment proceedings had furnished supporting documentary evidence to substantiate the authenticity of the purchases claimed to have been made from the aforementioned parties. Nowhere in the assessment order, the A.O had arrived at an observation that the assessee had failed to place on record any specific document that was called for by him in order to verify the authenticity of the purchase transactions in question. On the contrary, we find th....
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....re as under: - Sr. No. Date Bill No. Carats Amount (Rs.) 1. 02.04.2012 PS/PD/APR/05/2012-13 305.56 51,60,071/- 2. 13.04.2012 PS/PD/APR/21/2012-13 295.68 32,62,607/- 3. 03.08.2012 PS/PD/AUG/05/2012-13 310.61 67,91,954/- 4. 08.11.2012 PS/PD/NOV/09/2012-13 318.76 48,53,360/- 5. 15.01.2013 PS/PD/JAN/12/2012-13 115.56 16,63,197/-" On a perusal of the aforesaid, we find that complete details as regards the sales carried out by both the aforementioned parties, viz. invoice numbers, weight of diamond (carats) and sale consideration have been specifically mentioned. Also, we find that the assessee had in the course of the assessment proceedings filed the confirmations of both of the aforementioned parties. In the backd....