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2023 (3) TMI 1418
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....take up appeals in case of late Shri Gautam Bhanwarlal Jain filed through legal heir Ms Pooja Jain for assessment year 2008-09 to assessment year 2014-15. 03. We take the lead appeal in ITA No. 885/Mum/2019 for assessment year 2008-09 filed by the assessee against the order of the Commissioner of Income-tax (Appeals)-50, Mumbai [the learned CIT (A)] passed on 30th November, 2018 in a consolidated order for A.Ys. 2008-09 to 2014-15. 04. By this order, the appeal filed by the assessee against the assessment order passed by the Dy. Commissioner of Income Tax, Central Circle 8(3), Mumbai (the learned Assessing Officer) dated 18th March, 2016 and 23rd June, 2017 for different assessment years passed under Section 153A read with section 143(3) of the Income-tax Act, 1961 (the Act), wherein income was returned at Rs.2,74,000/- for A.Y. 2008-09 assessed at Rs.2,02,38,223/- by the learned Assessing Officer and further, the learned CIT (A) enhanced the income by further Rs.20,53,87,498/- for all these years on account of various assessment years. 05. The brief fact of the case shows that assessee is an individual. Search and seizure operation under Section 132 of the Act and survey ....
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....ed that Mr. Gautam Bhanwarlal Jain has retracted the statement and the statement of other parties can be used against them. It was further stated that the accounts of the assessee are audited and details of purchase and sales along with the bank statements have been produced. Accordingly, the profit of 1% of the sales is estimated as accommodation entry commission in the hands of the assessee and 2.4% of the accommodation commission on loans and advances was added. Accordingly, against the return of income of Rs.2,74,000/-, the income was assessed at Rs.2,05,12,220/- by passing an assessment order under Section 153A of the Act read with section 143(3) of the Income-tax Act, 1961 (the Act) dated 18th March, 2016. 09. Aggrieved assessee preferred the appeal before the learned CIT (A). 010. At the time of hearing before the learned CIT (A), assessments for A.Y. 2009-10 to 2014-15, were also resulted into the similar addition for the respective years. The learned CIT (A) confirmed the above addition. Over and above, the learned CIT (A) found that there is no addition of commission income on imported purchases and local purchases and therefore, he also computed 1% accommodation en....
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.... subject assessee company were transferred to the charge of undersigned on 12.02.2021 due to decentralization of the case of the assessee from DCIT central circle 8(3) Mumbai who had passed assessment orders u/s. 153A r.w.s 143(3) of the Act. On going through the assessment folder, which is the only record I have in my possession, it is seen that there is nothing available on record in respect of seizure of documents. Therefore, a letter has been written to the DCIT central circle 8(3) Mumbai for providing required documentary evidence in respect of details of seizure if any made and the premises covered, during the course of search. In response to the same, the DCIT C.C. 8(3), Mumbai vide email dated 15.11.2022 has made his reply wherein he has not stated any facts regarding seized material. Therefore, it is requested to seeks an adjournment as I am unable to offer authentic information on the subject matter in view of the above circumstances. Without prejudice to the above, the assessment records as available with the undersigned were examined and my comments on the contentions raised by the assessee are offered as under. 3. In respect of assuming jurisdiction u....
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....ee Company were dealing only in accommodation entry business on commission instead of outer facade of genuine import and trading in Diamond trade. Moreover, had any stringent action like a search and seizure by investigation wing was not conducted, this most vital and shocking evidence of accommodation of entry business cum hawala business would not have come to lime light. This piece of evidence constitutes valid ground for issue of Notice under section 153A of the Act. The asset detected in the course of comprehensive search and seizure, is in the form of a concealed commission income of the assessee company. This fact further strengthens the addition made by the AO and validity of invocation of section 153A of the Act. Thus contention of the assessee is unsubstantiated and unfounded. Without prejudice to the above, it is submitted that the assessee's contention that additions are made without any incriminating documents found during search proceedings is not acceptable, as for the purpose of computing income u/s. 153A the Assessing Officer was not required to confine himself only to the material found during the course of search operation and the AO while computing ....
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....rious entities and were not engaged in any genuine business activity. The instant assessee company is one of the entities controlled by Gautam Bhanwarlal Jain Group and Shri. Gautam Bhanwarlal Jain is Director in assessee company. During the course of search/survey operations, many premises, from where the business was claimed to have been carried out were found closed. During the statement of Shri. Gautam Bhanwarlal Jain, Director M/s. Karishma Diamond Pvt. Ltd dated 06.10.2013 has stated in answer to Q. No. 33 that the business of the company is carried out solely at 5B/1108, A1167/68B, Santok Diamond Office No. 204 2nd Floor, Somnath Mahadev ni Sheri, Gajar Falia, Haripura, Surat and further he stated in answer to Q.no.52 that there is no actual business of trading in diamond that is being carried by me in the M/s. Karishma Diamond Pvt Ltd and that is why during the course of search and seizure action u/.132 of the I.T. Act on 03.10.2013, the business premises were found vacant and not being in use. Further, it can be seen from the para 20.7 of the assessment order for A.Y.2014-15 dated, 18.03.2016 that, statement of Shri. Shri Anup Tiwari, Watchman was recorde....
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.... material. The learned Authorized Representative further referred to the decision of co-ordinate Bench in ITA Nos. 1021 & 1023/Mum/2018 in case of M/s Essel Mining & Industries Limited Vs. DCIT dated 15th November, 2022, where in absence of any incriminating material, the additions are deleted. 017. The learned Departmental Representative in response submitted the decision of co-ordinate bench in case of DCIT Vs. M/s Skyway Infra Projects Pvt. Ltd. dated 28th February, 2023, in ITA No. 2665/Mum/2022 for seven assessment years. In this case, the learned Departmental Representative specifically referred to paragraph no.8.3 to 8.7 stating that information in the form of statement of the supplier parties, absence of evidence in support of transport and delivery of material during the course of search and evidence not found at the premises of the supplier parties by the inspector during the verification in totality stating incriminating material. He further relied upon the decision of Madras High Court in case of B Kishore Kumar Vs. DCIT 229 Taxman 614 (Madras) dated 3rd November, 2014, wherein it was held that when the assessee itself has made a statement that he has a separate....
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....e addition made under Section 68 of the Act on account of statement made by the Assessee's Directors in the course of search under Section 132 of the Act were rightly deleted by the ITAT. Vide Para no.45, it was further held that having regard to the materials seized in the course of search under Section 132 and the statements made on behalf of the Assessee, the assumption of jurisdiction under Section 153A of the Act and the consequent additions made by the AO are not justified. In this case, the Hon'ble High Court was concerned with statement made by Mr. Tarun Goyal and further statement made by the director of the company admitting the concealed income. In these circumstances, after considering the decision of Hon'ble Delhi High Court in case of PCIT vs. Meeta Gutgutia [2017] 82 taxmann.com 287 (Delhi) and Smt. Dayawanti Gupta v. CIT [2016] 390 ITR 496 (Delhi) and further relying on the decision of CIT v. Kabul Chawla [2016] 380 ITR 573 (Delhi) and CIT v. Continental Warehousing Corpn. (Nhava Sheva) Ltd. 374 ITR 645 (Bom.), in paragraph no. 38 of the Act has categorically held that statements under Section 132(4) of the Act do not by themselves constitute incriminati....
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....se circumstances, merely a statement of the assessee where there is no admission of the income cannot be said to be incriminating evidence. Consequent to that the additions made by the learned Assessing Officer and by the learned CIT (A) are not sustainable. Hence, they are directed to be deleted. 023. Accordingly appeal of the assessee for assessment year 2008-09 to assessment year 2013-14 are allowed in absence of any incriminating material. 024. With respect to A.Y. 2014-15, the addition is made by the learned Assessing Officer and further enhanced by the learned CIT (A). This assessment year is open but not concluded assessment at the time of search. As the date of search is 3/10/2013 therefore, the learned assessing officer has to make an assessment of the total income of the assessee based on the material found during the course of search as well as information contained in the return of income. Thus, there is no restriction to make an addition in the hands of the assessee, irrespective of any incriminating material found during the course of search. 025. For this year the learned assessing officer has estimated the profit by invoking the provisions of section 145 (3....
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....d the addition of commission income in the hence of assessee with respect to purchase and sales in various concerns of the assessee. 028. The arguments of the assessee were against the reliance on the statement and submitted that those statements have been retracted and not cross-examination of the person based on whose statement assessee is found to be an accommodation entry provider was granted. He further reiterated that the books of accounts are audited and supported by proper basis. In absence of any other material showing that the book result does not disclose the correct profit by finding out the defects in books of accounts, the learned AO could not have rejected the same. 029. The learned departmental representative supported the orders of the lower authorities. 030. We have carefully considered the rival contention and perused the orders of the lower authorities. In this case, when the search took place, there was no material found at the premises where the business of the assessee was stated to be carried on supporting the books of accounts of the assessee. No evidences, except the books of accounts, purchase and sales invoices and bank statement was produced be....
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....s] Shri Gyanchand Bhanwarlal Jain ITA Nos. 867 to 872/Mum/2019 (Assessment Year 2009-10 to 2014-15) [ 6 Appeals] Shri Sukhpal Bijaram Prajapat 033. In case of above captioned 4 assessee is the appeals are pertaining to various assessment years involving similar facts. 034. Therefore, for the reasons given by us in case of appeals filed by late Sri Gautam Bhanwarlal Jain, we hold that for the appeals pertaining to assessment year 2008-09 to 2013-14 are concluded assessments and therefore merely on the basis of the statement which has been retracted no addition could have been made. On this basis, we allow the appeal of the assessee for assessment year 2008-09 to 2013-14 in case of (i) Karishma Diamond Private Limited, (ii) Parshwanath Gems Private Limited (iii) Shri Gyanchand Bhanwarlal Jain and four assessment year 2009-10 to 2013-14 in case of Shri Sukhpal Bijaram Prajapat 035. For appeal of assessment year 2014-15 for all the above four assessees are set aside to the file of the learned assessing officer as per our direction given in the appeal of late Sri Gautam Bhanwarlal Jain for a by 2014 - 15. 036. Accordingly, all 27 appeals in case of these 4 ass....
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.... officer with a direction to the assessee to substantiate the transaction of purchase and sales. Accordingly, with similar direction, the addition on the merits set-aside to the file of the learned assessing officer. 042. In all these, five appeals similar issues are involved with respect to the merit. Therefore, all these five appeals are restored to the file of the learned assessing officer to decide the addition on the merits of the case. 043. Accordingly, all the file appeals of the assessee are partly allowed for statistical purposes. ITA No. 1396/Mum/2019 for A.Y. 2011-12 ITA No. 1397/Mum/2019 for A.Y. 2013-14 ITA No. 1398/Mum/2019 for A.Y. 2014-15 Shri Dharmendra A Babel [ 3 Appeals ] 044. These three appeals of the assessee pertaining to Mr. Gautam Jain group for assessment year 2011-12, 2013-14 and 2014 - 15 are contesting the addition made by the learned assessing officer and further enhanced by Rs. 197,138,162/- by the learned CIT-A on account of alleged accommodation entry. 045. On identical facts and circumstances in case of Mr. Gautam Jain for assessment year 2014-15 via set-aside the issue back to the file of the learned assessing officer w....
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....and 2013-14, for the similar reasons we allow the appeal of the assessee. 054. For assessment year 2014-15, on identical facts and circumstances in case of Mr. Gautam Jain, we have set-aside the addition to the file of the learned assessing officer with a direction to determine the total income of the assessee. With similar direction, we restore back the file for assessment year 2014-15 to the file of the learned assessing officer. 055. Accordingly, appeal of the assessee for assessment year 2012 - 13 and 2013-14 are allowed and appeal of the assessee for assessment year 2014-15 is allowed for statistical purposes. ITA No. 2272/Mum/2019 for A.Y. 2014-15 ITA No. 2273/Mum/2019 for A.Y. 2012-13 ITA No. 2274/Mum/2019 for A.Y. 2013-14 [3 Appeals] Pramod Kumar Ranka 056. These are the three appeals in case of this assessee for assessment year 2012-13, 2013-14 and 2014-15 against the appellate order passed by the learned Commissioner of income tax (appeals)-50, Mumbai dated 31/1/2019 against the addition made by the learned assessing officer and further enhanced by the learned CIT-A on account of commission income earned on accommodation entries. 057. Both the p....