TaxTMI 
TaxTMI 
2019 (3) TMI 1958
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....osed off by this common order for the sake of convenience. 3. The brief facts of this issue are that the assessee is a public limited company and engaged in the business of trading in diamonds and in the manufacture and sale of diamond studded jewellery. It has a unit located in Special Economic Zone and a selling store at Hotel Oberoi. The assessee filed its return of income for the A.Y.2008-09 on 25/09/2008 declaring total income of Rs. 1,77,93,630/- and assessment was completed u/s.143(3) of the Act on 01/02/2010 determining total income of Rs. 1,78,01,131/-. Later the assessment was sought to be reopened by issuance of notice u/s.148 of the Act dated 25/02/2015 on the basis of information received from office of DGIT Investigation, Mumbai in respect of certain accommodation entries obtained by the assessee for purchase of diamonds from Rajendra Jain Group and bogus companies controlled by this group. 3.1. The assessee filed a reply in response to notice u/s.148 of the Act stating that the return already filed may be treated as return in response to 148 notice and sought for reasons recorded for reopening the assessment. The reasons were duly furnished to the assessee and asse....
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....it did not sell goods locally, that the AO had not doubted the sales, that the suppliers had appeared before the AO and admitted that they had sold the goods to the assessee, that they had filed affidavits in that regard. We find that DJ had admitted of issuing bogus bills. But, nowhere he had admitted that he had issued accommodation bills to the assessee. In our opinion, there is subtle but very important difference in issuing bogus bills and issuing accommodation bills to a particular party. The difference becomes very important when a supplier in his affidavit admits supply of goods. In this matter, the assessee had made no local sales and goods were exported, as stated earlier. So, as far as sales are concerned there is no doubt about the genuineness of such sales. It is also a fact that suppliers were paying VAT and were filing their returns of income. In response to the notices issued by the AO, under section 133(6) of the Act, the supplier had admitted the genuineness of the transaction. Here, we would like to refer to order of the Tribunal in the case of Romila M. Nagpal (supra),wherein in the similar circumstances, addition confirmed by the FAA were deleted. In that order....
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.... banking channels, that the stock register and the consumption chart showed the nexus between the purchases and the sales made by the assessee, that details of closing stock were available on record, that there was no evidence to prove that assessee had received back the money in cash, that the AO had not rejected the books of account of the assessee, that the assessee was maintaining quantitative details of purchase and sales, that the AO had not pointed out any specific defects in the books maintained by her. After considering available material, the FAA held that the AO had made efforts beyond getting information from the investigation wing, that he had directed the AO to produce the parties, that the supplier were not found at the given addresses, that it was a case of purchases made form bogus parties rather than a case of bogus purchases, that without making purchases it was not possible for assessee to complete the sales, that the AO had rightly invoked the provisions of section 147, that he was justified in making the disallowance of Rs. 16.99 lakhs. Finally, he dismissed the appeal filed by the assessee. 4. During the course of hearing before us the Authorised Represent....
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....rchases. According to the Assessing Officer, assessee did not make actual purchases from such four parties because as per the information received from the Investment Wing, the four parties in question were found to have been VAT dodgers by the Mahrashtra VAT Department. The Assessing Officer noted that since sales have been effected by the assessee, which showed that assessee was actually in possession of goods, the material would have been procured from grey market without bills in order to cover up the purchases, and thus assessee would have taken accommodation bills for purchases from the said four parties amounting to Rs. 77,51,496/-. Accordingly, the Assessing Officer brought to tax the profit margin in relation to such non-genuine purchases, which he computed by applying the rate of 12.5% on the total amount of Rs. 77,51,496/-, which came to Rs. 9,68,937/-. 3.1 The plea of the assessee before the Assessing Officer as well as before the CIT(Appeals) was that the purchases in question were duly supported by the bills of purchase. Moreover, the assessee pointed out that all its sales were by way of exports and that there was no evidence to say that the purchases in question w....
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....essee is that the entire addition is liable to be deleted. 5. On the other hand, the Ld. Departmental Representative supported the orders of the authorities below by pointing out that the addition has been made on account of the enquiries conducted by the Sales Tax Department of the Government of Maharashtra and no effort has been made by the assessee to controvert such information. 6. We have carefully considered the rival submissions. The entire discussion in the assessment order reveals that purchases from four parties namely Dhruv sales Corporation - Rs. 13,67,640/-; Subhlaxmi Sales Corp. - Rs. 20,20,800/-; Dharshan Sales Corporation - Rs. 9,64,656/-; and Paras (India)- Rs. 33,98,400, totalling to Rs. 77,51,496/- have been treated to be bogus based on the purported enquiries conducted by the Sales Tax Department of the Government of Maharashtra. Ostensibly, the Assessing Officer ought to have brought on record material which is relevant to the transactions of the assessee with the aforesaid four parties instead of making a general observation about the information received from the Sales Tax Department of the Government of Maharashtra. Quite clearly, the Assessing Officer ....