TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1910
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....61. 3. As far as second fold of grievance is concerned, it is common with grievance raised by the Revenue in its appeal. The ld.AO has made addition of Rs. 10,15,84,690/- on account of bogus purchase claimed by the assessee. On appeal, the ld.CIT(A) restricted profit element involved in its modus operandi at 12.50% of the alleged bogus purchases. Thus, Revenue is challenging deletion of addition by the ld.CIT(A) over and above 12.50% of the total addition, whereas the assessee in its second fold of grievance is challenging retention of addition by 12.5% of the alleged bogus purchases. The ld.counsel for the assessee, firstly impugned upholding of reopening of the assessment. 4. Brief facts of the case are that the assessee at the relevant....
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....ng to Rs. 10,13,41,508/- from the following parties, -which are accommodation entries only and no real transaction has taken place. Sr. No. Name of the concern PAN no. Amount 1 M/s. Daksh Diamonds AURPS3696K 42934153/- 2 M/s Jewel Diam ABUPV3494J 24929147/- 3 M/s Kothari & Co. ABQPK7967H 33381111/- 4 M/s Little Diam AABFL1469R 970971- Total 101341508/-. A search and seizure operation u/s 132 of the Act was carried out in the case of Bhanwarlal Jain group, which is leading entry provider of Mumbai, The group is involved in providing accommodation entry of bogus unsecured loans and advances through benami concerns. The assesseee M/s Sanket Exports is one of the beneficiary and had received accommodation....
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....y addition under section 68 of the Act on account of unexplained loans. The AO in the assessment order treated it as purchases from these concerns which according to him were bogus. Thus, on the strength of judgment of Hon'ble Bombay High Court in the case of CIT Vs. Jet Airways (I) Ltd., 331 ITR 236, Hon'ble Delhi High Court's decision in the case of Ranbaxy Laboratories Ltd. Vs. CIT, 336 ITR 136 and the decision of Hon'ble Gujarat High Court reported in 355 ITR 172 in the case of CIT Vs. Mohmed Juned Dadani, he contended that if no addition was being made on the basis of an issue, for which assessment was reopened, no addition on other issue can be made. He further contended that there was no information available with the AO for reopenin....
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....h assessment is being reopened, then any other items found during the course of re-assessment as escaped income cannot be added. According to the Hon'ble Gujarat High Court expression "and also" means that if addition is being made on account of escaped income for which assessment was reopened, then any other item found during the course of reassessment of income could also be added. In the present case, the ld.AO has not made any addition under section 68 of the Act on account of unexplained/unsecured loans availed by the assessee. Therefore, no other item can be added. Apart from the above, we are of the view that the AO failed to establish the livelink between information available to him vis-à-vis formation of his belief, because....
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....ls available on record reflected such bogus purchases. It is evident that the Assessing Officer for the purpose of reopening the assessment has placed reliance upon the material from an external source which does not form part of the record. However, the said aspect is not reflected in the reasons recorded. On behalf of the Assessing Officer, the learned counsel is not in a position to point out any material on the record on the basis of which the Assessing Officer could have formed such belief. What is now sought to be stated by way of the order rejecting the objections as well as the affidavit-in-reply filed in response to the averments made in the petitions is that the formation of belief is based upon the information which is received f....
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....t satisfied in the present case. The impugned notice under section 148 of the Act, therefore, cannot be sustained." 8. In present case also, according to the formation of belief, the assessee has availed unsecured loans from concerns of Shri Bhanwarlal Jain. However, while passing assessment order, it revealed to the AO that loans were not availed by the assessee. The assessee in its objection has been contended that he has no concern with Shri Bhanwarlal Jain. He is a commission agent who purchased and sold goods on behalf of principal on commission basis and account only commission in the profit & loss account. The AO has neither transmitted the information received by him to the assessee nor considered while disposing of the objection f....