2022 (10) TMI 419

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....leged concerns were bogus and was only to suppress the profit of the beneficiaries which is substantiated by the statement on oath given by the entry provider. (iii). On the facts and circumstances of the case and in Law, the Ld. CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A)-1 Surat may be set-aside and that of the Assessing Officer's order may be restored." 2. Brief facts of the case are that assessee is a proprietary of Manglam Export, engaged in the business of import, export and resale of polished diamond. The assessee filed his return of income qua assessment year 2007-08 on 06.11.2007 declaring income of Rs. 1,25,638/-. The case of assessee was re-opened on 28.03.2014 on the basis of information received from Investigation Wing, Mumbai that a search & seizure action was carried out by DIT(Inv.) Mumbai in case of Praveen Kumar Jain Group & Others on 03.10.2013. In the search action, evidence was collected about the detection of accommodation entry of Rs. 8897 crores. In the search action, it was found that the Praveen Kumar Jain (PK Jain) was indulging in providing bogus sales an....

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....ee submitted that books of accounts of assessee are duly audited and all documentary evidence were furnished before the Assessing Officer. The entire (100%) diamond purchases were sold during the trading activities which resulted into nil closing stock of the year. The sale of assessee was accepted by the Department. Thus, the corresponding purchase should also be accepted as genuine. The Assessing Officer has not rejected the sales of assessee. The payments made to the suppliers through account payee cheques. The assessee also relied on certain case law. 4. In alternative submission, assessee submitted that addition, if any, be made, it should be made on estimate/ad-hoc basis. The assessee in the business of trading of diamond and gross margin are only of 0.15% to 0.50% in the business. The assessee has also shown profit @ 0.40% which is reflected in the books of account and in line of business of diamond and no adverse view is called for. On the service of notice under section 143(2), the assessee contended that there is no proof of service of notice. The signature of Assessing Officer on the notice under section 143(2) does not match with the assessment order and no seal of o....

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....axmann.com 402 (Guj); CIT Vs President Industries (2002)/124 TAXMAN 654 (Guj); CIT vs. Summit P Seth (2013) 38 taxmann.com 385 (Guj); CIT vs. Bholanath Poly Fab (P.) Ltd. (2013) 40 taxmann.com 498 (Guj) and Mayank Diamonds ITA No. 200 of 2003 dated 07.11.2011, wherein the High Court held only profit element embedded in the bogus/unverifiable purchases may be taxed. Accordingly, Ld. CIT(A) after considering all facts and circumstances of the case, restricted the disallowance to the extent of 5% of purchases from the entities managed by Praveen Kumar Jain Group. Aggrieved by the order of Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. 7. We have heard the submission of learned Commissioner of Income Tax-Departmental Representative (Ld. CIT-DR) for the Revenue and Ld. Authorized Representative (AR) for the assessee and have gone through the orders of lower authorities carefully. The ld. CIT-DR for the Revenue submits that assessee is a beneficiary of bogus purchase as the assessee has obtained bogus entries from the entities managed by PK Jain Group, who was well known hawala operator and was indulging in providing accommodation entry without actual delivery of....

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.....2018; * Kamla Devi Sharma Vs ITO, in ITA No. 1026/JP/2016 dated 06.02.2018; * Kusumben D. Tailor Vs ITO in ITA Nos. 2565-2568/AHD/2014 dated 30.09.2019 and * PCIT Vs Sun Pharmaceuticals Industries Ltd. (2017) 86 taxmann.com 148 (Gujarat High Court). 9. On the merit of the case, the ld. AR for the assessee submits that assessee has made genuine purchase and the purchases made by assessee were duly reflected in his stock register. The assessee sold the entire material purchased from the said parties. The sale of the entire materials was not disputed by the Assessing Officer. The books of accounts and books results of assessee was not rejected. The ld. AR for the assessee submits that he has furnished the net profit as well as gross profit ratio for the assessment years 2007-08 to 2010-11 respectively. The assessee has filed sufficient evidence to prove the genuineness of the purchase, however, the lower authorities have not given finding on such evidences. The gross profit and net profit ratio for the year under consideration is considerably on the higher side. Though assessee has shown gross profit @.40% and net profit shown 0.03% respectively, which i....

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...., * CIT Vs BPL System & projects Limited 227 ITR 779 (Ker), * Nitin P Chheda Vs ITO ITA No. 3944-3945/Mum/2018 dated 26.06.2019. 10. In rejoinder submission, Ld. CIT-DR for the Revenue submits that notice under section 143(2) was duly served upon the assessee. The assessee has not contested the assessment proceedings, except making appearance on one or two dates. Notice under section 148 was also served through affixation. The assessee conveniently chose either to appear or not to appear before the assessing officer, as per his convenience. The copy of the impugned notice under section 143(2) is filed by the assessee himself. It is not the case of assessee that copy of said impugned notice was supplied to the assessee either by Assessing Officer or it was obtained by him by way of other means. On the submission of addition on merit, the Ld. CIT-DR submits that he is making prayer to enhance the addition @ 100%. However, in his without prejudice submission of Ld. CIT-DR submits that in a number of similar bogus purchases, the combination of this bench has already enhanced the addition or restricted the addition @ 6% of the similar purchases and dismissed all tec....

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....vice of notice under section 143(2). Besides, service of notice, the objection of assessee is that the signature of Assessing Officer is differ from the signature appeared on assessment order. The assessee is failed to show the basic difference in the signature on the notice viz a viz the assessment order. Moreover, the assessee has not disclosed as to what prejudice is caused to the assessee in mere difference in the signature. It is not the case of assessee that the assessment order or the notice under section 143(2) is not signed by competent officer. Further, the assessee or his AR nowhere took the plea that the signature either at the notice under section 143(2) or on the assessment is forged or the revenue is relying on some fabricated or forged signature. It is not the plea that this notice under section 143(2) was not at all issued by the assessing officer. The assessee want favourable order only from the bench without asserting such contention. In our view, the assessee has raised objection only for the sake of technical reasons, which we reject. 13. Now adverting to the merit of the case. We are conscious of the fact that the assessee has not challenged the order of ld....