TaxTMI 
TaxTMI 
2018 (9) TMI 2075
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....us purchases in all these four years and the learned CIT(A) reduced the same to 3% of the value of bogus purchases. The Revenue is contesting relief granted by the learned CIT(A) in all these years and the assessee is challenging the addition sustained by the learned CIT(A). 4. The assessee is engaged in the business of manufacture and export of gems and jewellery. 5. Learned AR submitted that the Assessing Officer, during the course of assessment proceedings relating to A.Y. 2011-12 called for the details/evidence of purchases made from three parties namely MN/s. Aadi Impek, M/s. Kalash Enterprises & M/s. Maniprabha Impex Pvt. Ltd., who were controlled and managed by Rajesh Jain Group (Rajendra Jain group). One of the persons related to the group had admitted during the course of search proceedings carried out u/s. 132 of the Act that the group was merely providing accommodation entries without actually supplying the material. Hence, the Assessing Officer disallowed the purchases made from the above said parties in A.Y. 2011-12. In the appellate proceedings, the learned CIT(A) had restricted the addition to 12.5% of the value of purchases. 6. Based on the assessment order pass....
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....Assessing Officer has made the impugned addition on the basis of specific information received that the companies belonging to Rajendra Jain group are providing only accommodation entries and not actually supplying the goods. He further submitted that the Assessing Officer has followed the decision rendered by Hon'ble Gujarat High Court in the case of Simit P. Sheth (356 ITR 451) and also in the case of Bholenath Poly Fab P. Ltd. (355 ITR 290) and has came to the conclusion that profit element embedded in the bogus purchases should be assessed as income of the assessee. Accordingly, he submitted that the order passed by the Assessing Officer should be confirmed. 10. In the rejoinder, learned AR submitted that the facts available in the case of Simit P. Sheth (supra) are different. The assessee, in the case before Hon'ble Gujarat High Court, did not furnish any confirmation letter from the suppliers and also did not produce them before the Assessing Officer. On the contrary, in the instant case, the assessee has produced the suppliers before the Assessing Officer and they have been examined by the Assessing Officer u/s. 131 of the Act on oath. Suppliers have also confirmed ....
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....der of reads as under: "2.Effective Ground of appeal is about addition made to her income with regard to purchases. The AO received an information from the investigation wing that the sales tax department, Govt. of Maharashtra had made enquiries about bogus purchases/hawala transactions. The sales tax authorities had forwarded the list of beneficiaries who had taken bills from the hawala dealers. The AO observed that assessee had purchased goods worth Rs. 1.35crores from three parties namely Shri Ganesh Trading (Rs. 27.73 lakhs); Kishna Chemical Works (Rs. 27.85 lakhs) and Shreyas Marketing Agency (Rs. 80.40 lakhs). The AO issued a notice u/s.148 of the Act .In response to the notice the assessee stated that return filed on 24/9/2009 should be treated as return filed in response to re-assessment notice. After considering the submission of the assessee and the various details filed by her the AO issued notices u/s. 133 (6) of the Act to above mentioned three parties. As per the AO, notices were returned back by postal authorities as same could not be served. He held that in absence of authentic confirmation from the parties the genuineness of the transaction was not verifiable. He....
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....channels. He referred to the cases of Shri Mahesh Shah (ITA No.5194/Mum/2014 A.Y.2010-11); M/s. Imperial Imp & Exp. (ITA No.5427/Mum/2015 A.Y.2009-10); Shri Ramila Pravin Shah (ITA No.5246/M/2013 A.Y.10-11); Shri Deepak Popatlal Gala (ITA No.5920/Mum/2013 A.Y.2010-11,dated 27/3/2015); Ramesh Kumar and Co.(ITA No.2959/Mum/2014 A.Y.2010-11 dated 28/11/2014); Shri Rajeev G. Kalathil (ITA No. 6727/Mum/2012 A.Y.2009-10 dated 20/08/2014);Shri Ganpatraj A. Sanghavi (ITA No.2826/ Mum/ 2013 A.Y. 2009-10 dt.5/11/2 014 and Shri Hiralal Chunilal Jain (ITA No.4547/Mum/2014 dated 01/01/2016. The DR supported the order of the FAA. 5.We have heard the rival submissions and perused the material before us. We find that in the case of Imperial Imp.& Exp.(supra) identical issue has been deliberated upon and has been decided by the Tribunal .We are reproducing the relevant portion consisting the facts of the case, order of the FAA, arguments advanced by AR and DR before the Tribunal and the operative part of the order of the Tribunal which reads as under :- 2.In this appeal, although the assessee has raised multiple Grounds of appeal, but the s....
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....nt to prove payments to such parties. The details of goods sold by the assessee was also furnished, which corresponded to the purchases effected from such four parties. The CIT(Appeals) has primarily affirmed the stand of the Assessing Officer based on the information stated to have been received from the Investigation Wing of the Department relating to the finding of the Maharashtra VAT Department. Additionally, the CIT(Appeals) also noticed that assessee could not prove the existence of the suppliers and, therefore, the circumstantial evidence also suggested that the entire purchases from the four parties was unverifiable. However, he restricted the addition to 5.41% of the amount of such unexplained purchases, instead of 12.5% adopted by the Assessing Officer. The CIT(Appeals) has applied the rate of 5.41% being the gross profit rate of the assessee for the year under consideration. Accordingly, out of an addition of Rs. 9,68,937/- made by the Assessing Officer, the CIT(Appeals) retained an addition of Rs. 4,19,356/- and deleted the balance. 4. Before us, the Ld. Representative for the assessee has vehemently pointed out that the enti....
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....htra. Quite clearly, the Assessing Officer as well as CIT(Appeals) have taken note of the fact that no sales could have been effected by the assessee without purchases. In the present case, assessee has explained that all its sales are by way of exports. The books of account maintained by the assessee show payment for effecting such purchases by account payee cheques and also the vouchers for sale and purchase of goods, etc. Notably, no independent enquiries have been conducted by the Assessing Officer. Under identical circumstances, our Co-ordinate Benches in the cases of Deepak Popatwala Gal (supra), Shri Rajeev G. Kalathil(supra)and Ramesh Kumar and Co.(supra) have held that the Assessing Officer was not justified in making additions merely on the basis of information obtained from the Sales Tax Department of the Government of Maharashtra without conducting any independent enquiries. Before the CIT(Appeals), one of the points raised by the assessee was with respect to an opportunity to cross examine the four (Assessment Year : 2009-10) parties, but we find that no such opportunity have been allowed. Considering the entirety of facts and circumstances of the case and the aforesai....