TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 1418
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....al 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 under Section 133A of the Act was conducted by the Addl. D....
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....d 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 entry commission on these entries. Accordingly, in case of Mihir Diamonds, he enhanced income of Rs.1,36,33,352/-, in case of Parshwanath Gems Pvt. Lt....
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....o 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/s. 153A of the Act. The requirement of for issue of notice under section 153A of the Act is Initiation of search under section 132 of the Act. Ongoing through the available records, it ....
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....vestigation 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 income u/s. 153A is well within his powers to compute taxable income on the basis of material on record even though such material was not found during the course of search operation in view of sec 15881 w.e.f. 01.06.200....
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....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 recorded during the search in the case of M/s.Karishma Diamond Pvt Ltd at 204, Santok Diamonds, Somnath Devni Gurjar Falia, Haripura, Surat and in his statement he stated that he was working since last six to seven years in the premise as watchman and he never heard o....
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....dditions 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 business income, the learned Assessing Officer was correct in making the addition. He further relied upon the decision of the Hon'ble Supreme Court in case of V. Jaganmohan Rao Vs. CIT (1970) 75 ITR 373 (SC) dated 31st July, 1969 and decision of Delhi High Court in case ....
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....ourse 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 incriminating material. 020. Further, Hon'ble Delhi High Court recently in PCIT Vs. Shiv Kumar Agarwal [2022] 143 taxmann.com 55 (Delhi) has categorically held that the additions solely made relying on the disclosure made by a MD of a company the additions are not justified. Further, i....
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.... 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) of the act holding that assessee has provided accommodation entries of purchased various parties which are stated in the profit and loss account as sales. The AO has made an addition of Rs. 2,31,04,106/-. The learned CIT-A has and hence to this addition by holding that the assessee has car....
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.... 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 before the learned that lower authorities. Merely producing documentary evidences without actually supporting that in fact such transactions have taken place in ordinary course of business, the books of accounts of the assessee cannot be stated to be showing the correct picture. It is the duty of the as....
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.... 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 assessees are disposed of as above. ITA Nos. 873/Mum/2019 (Assessment Years 2007-08) ITA Nos. 874 to 877/Mum/2019 (Assessment Years 2011-12 to 2014-15) [ 5 Appeals] Krishna Diam 037. These are the five appeals of the same assessee involving the similar facts. 038. For assessment year 2007-08 assessee filed its return of income on 16/10/2007 ....
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.... 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 with a direction to determine the income of the assessee afresh, with similar direction, all these three appeals are also restored back to the file of the learned assessing officer. 046. Accordingly, all these three appeals of the assessee are allowed for statistical purposes. ITA Nos. 2275 & 2276/Mum/2019 (Assessment Year 2014-15 & 2013-14) [Two Appeals] Frontline Diamond Put Ltd ....