TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 1299
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting that he was in the business of providing entries on commission, the assessee has not contested the assessment order for the A.Y. 2010-11 wherein it was held that the assessee was carrying on the business of providing accommodation entries as in the earlier assessment years and the assessee has not contested the said order in first appeal . 1(c). On the facts and in the circumstances of the case, the Ld. CIT(A) ought to have upheld the order of the Assessing officer. 2(a). On the facts and in the circumstances of the case, the ld. CIT(A) ought to have upheld the assessment of interest receipt of Rs. 1,63,56,600/- and other income of Rs. 992/- and exchange difference of Rs. 13,23,565/- under the head "Income from other sources". The appellant prays that the order of the CIT(A) on the above grounds be set aside and that of the Assessing Officer be restored. The appellant craves leave to amend or alter any ground and /or add new grounds which may be necessary." 2. Briefly stated, the assessee who is a proprietor of M/s Sangam Exports is engaged in the business of manufacturing and trading of precious and semi- precious stones and jewellery. Also, the assessee is a direc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d parties which were routed through his books of accounts as a facilitator i.e @ 2%; (ii). commission on local sales i.e @ 0.75%; and (iii) commission on other purchases i.e @ 0.75%. Also, on a similar footing the income of the aforementioned "sister concerns" of the assessee, viz. M/s Sunshine Imports and Exports Pvt. Ltd and M/s Shine Star Impex Pvt. Ltd. were also estimated by the A.O while framing their respective reassessments under Sec. 143(3) r.w.s 147 for A.Y 2008-09 and A.Y 2009-10. 4. Backed by the facts and reasoning that was adopted by his predecessor while framing the reassessment under Sec. 143(3) r.w.s 147 in the case of the assessee for A.Y 2008-09 and A.Y 2009-10, the A.O, on a similar footing assessed the income of the assessee for the year under consideration i.e A.Y 2011-12, vide his order passed u/s 143(3), dated 14.02.2014. Accordingly, treating the assessee as a facilitator and/or an accommodation entry provider, the A.O rejected the books of accounts of the assessee and estimated his income for the year under consideration i.e A.Y.2011-12, viz. (i) commission income from imports alleged to have been routed through his books of accounts as a facilitator/dumm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....9-10 and his statement that was recorded on 23.01.2009 in the course of the then post-survey proceedings. Not inclined to accept the aforesaid view taken by the A.O, it was noticed by the CIT(A) that the assessee had during the year under consideration maintained regular books of accounts that were duly audited by a Chartered account. It was further observed by him that the fact that assessee was carrying on the business of manufacturing and trading in precious and semi-precious stones and jewellery could safely be gathered from a perusal of his bank books, cash book, sales register, purchase register, stock register, journal and ledger and qualitative details of goods traded and manufactured; in respect of his trading accounts at Surat and Mumbai which had duly been examined and audited by his auditors. It was further noticed by the CIT(A) that the assessee in order to drive home his claim that he was carrying on the business of manufacturing and trading in precious and semi-precious stones and jewellery had submitted the complete details of the import bills and related documents, bills of exports etc., along with a copy of the audit report and certification under the MVAT Act, 20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....antiated statement of the assessee recorded during the course of the survey proceedings i.e without there being any corroborative material was bad in law. It was observed by the CIT(A) that the Tribunal while disposing off the aforesaid appeals had held that a statement recorded u/s 133A of the Act does not carry any evidentiary value unless the same was supported by corroborative evidence. It was further observed by the Tribunal that in the absence of any incriminating material found in the course of the survey action no adverse inferences could have validly been drawn as regards the genuineness of the business transactions of the concerns before it by merely acting upon the standalone statement of the assessee that was recorded during the course of the said proceedings. Apart from that, it was observed by the CIT(A) that the A.O while framing the assessment in the case of the assessee for the subsequent years viz. A.Y. 2012-13, A.Y 2013-14 and A.Y. 2014-15 had accepted that the assessee was engaged in the business of manufacturing and trading of diamonds, precious and semi-precious stones and jewellery. In the backdrop of his aforesaid observations, the CIT(A) was of the view tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed his income by allegedly treating him as a dummy/facilitator and/or an accommodation entry provider and therein worked out his commission income qua his various streams of nefarious activities, viz. (i). @ 2% of imports; (ii) @ 0.75% of the alleged bogus local purchases; and (iii). 0.75% of the alleged bogus local sales during the said respective years. Also, on the same footing the A.O had made similar additions vide his respective assessment orders passed u/s 143(3) r.w.s 147 for A.Y 2008- 09 and A.Y 2009-10 in the case of the assessee's "sister concerns", viz. M/s Shine Star Impex Pvt. Ltd. and M/s Sunshine Imports and Exports Pvt. Ltd. However, the Tribunal while disposing off the appeals in the case of the aforesaid "sister concerns" of the assessee, viz. M/s Shine Star Impex Pvt. Ltd. and M/s Sunshine Imports and Exports Pvt. Ltd., wherein on the basis of the statement of the assessee before us, the A.O, had in the like manner dubbed both the aforesaid concerns too as facilitator/dummy concerns and/or accommodation entry providers and estimated their commission income, had vacated the adverse inferences and the consequential addition made by him. As observed by us hereinabo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ountant further substantiates the genuineness and authenticity of his business transactions for the year in question. Also, the VAT paid by the assessee to the Maharasthra Sales Tax Authority qua the sales made to the various parties during the year under consideration instills confidence as regards the claim of the assessee of having carried out genuine business transactions during the year. On a perusal of the assessment order, we find that the standalone reason for treating the assessee as a dummy/facilitator and/or an accommodation entry provider is his statement that was recorded in the course of the post-survey proceedings i.e way back as on 23.01.2009, which had been acted upon by the A.O without placing on record any material that would otherwise support drawing of such adverse inferences in the hands of the assessee during the year under consideration before us. We are in fact unable to comprehend as to how the unsubstantiated statement of the assessee recorded way back in the preceding year could have formed a solitary basis for concluding that he had not carried out any genuine business during the year under consideration i.e A.Y. 2011-12, and was merely a dummy/facilita....