TaxTMI 
TaxTMI 
2024 (1) TMI 1065
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.... declaring total loss of Rs. 2,915/-. Later, the case of the assessee was reopened u/s 147 of the Act by issuance of notice u/s 148 of the Act dated 21.03.2018. And since we are adjudicating the merits of the addition made after reopening the assessment, we are not discussing about the action of re-opening the assessment. According to the AO, he received information that from the Investigation Wing, Mumbai that Shri Bhanwarlal Jain (known entry operator) was managing and controlling M/s. Mohit Enterprises from which concern, the assessee has shown to have transacted/purchased diamonds worth of Rs. 59,53,440/- which was bogus. Therefore, according to the AO, he show caused the assessee as to why the said purchases be disallowed. Pursuant to such notice, the AO acknowledges that assessee filed the following documents found placed from page no. 39 of PB to establish the genuineness of the purchases from M/s. Mohit Enterprises viz (i) copies of the bills of the suppliers, (ii) bill wise details of the purchases so made, (iii) details of the corresponding sales of the said items of purchases with the copies of some of relevant sales bills, (iv) copies of the accounts of the concerned pa....
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....10 onwards. And thus it is the first year of its business. And the assessee inter-alia has purchased gold and diamonds worth of Rs. 1.9 crores out of which assessee purchased diamonds worth Rs. 59,53,440/- from M/s. Mohit Enterprises, which AO alleges to be bogus, since M/s. Mohit Enterprises was a concern run by Shri Bhawarlal Jain Group a known entry operator. According to the AO, Shri Bhawarlal Jain Group of concerns were involved in providing bogus accommodation bills in lieu of commission which fact has been admitted by Shri Banwarilal during search operation carried out at his premises. Therefore, according to AO, the entire transaction shown by assessee with M/s. Mohit Enterprises was bogus. Therefore, he show caused the assessee as to why the entire purchases from M/s. Mohit Enterprises should not be rejected, and added as income of the assessee. Pursuant to show cause notice, assessee filed to following documents to prove the genuineness of the purchases(i) copies of the bills of the suppliers, (ii) bill wise details of the purchases so made, (iii) details of the corresponding sales of the said items of purchases with the copies of some of relevant sales bills, (iv) copies....
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....ee has purchased the diamonds from the grey market and has utilized services of M/s. Mohit Enterprises for providing bills and has sold it. In such a scenario, we are of the opinion that only profit embedded in such sale should only be brought to tax. And for that we rely on the decision of the Hon'ble Bombay High Court in the case of PCIT Vs. Nitin Ramdeoji Lohia (2022) 145 taxmann.com 546 (Bom) wherein the Hon'ble Bombay High Court held as under: - "Both these appeals under section 260A of the Income-tax Act, 1961 ("the Act") challenge the order dated 05^th July, 2017, passed by the Income-tax Appellate Tribunal, Bench "B", Pune ("ITAT") in Income-tax Appeal No. 1408/PUN/2015 relevant to the assessment year 2010-11 and Income-tax Appeal No. 1409/PUN/2015 relevant to the assessment year 2011-12, respectively, whereby the appeals filed by the Revenue have been dismissed. 2. The facts and issues arising in both these appeals are identical, however, for the sake of deciding the issue, reference is being made to the facts in ITA No. 673 of 2018. 3. The following questions of law have been proposed for our consideration: a. Whether in the facts and c....
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.... and 142(1) of the Act and the order of assessment under section 143(3) r/w section 147 of the Act was passed on 30^th March, 2015 and total income assessed at Rs. 1,46,82,548/-. The A.O. thus made an addition of Rs. 1,42,34,578/- on account of alleged bogus purchases from Hawala dealers/parties. 5. An appeal was preferred by the assessee before the CIT (Appeals). The appeal was allowed inter alia on the ground that the A.O. having not disputed the sales, it was not a case of bogus purchases and that it was at best a case of inflated purchases. The CIT (Appeals), however, was of the opinion that the gross profit shown by the assessee at 0.69% was very low in that particular kind of trade and, therefore, estimated the gross profit at 5% and further directed the A.O. to make an addition in the gross profit ratio and delete the balance addition made. 6. Both the Revenue as also the assessee preferred appeals against the order passed by the CIT (Appeals), whereas the Revenue in its appeal challenged the deletion of Rs. 2.45 crores on account of alleged bogus purchases, the assessee questioned the order to the extent the gross profit rate was calculated at 5% as agains....