AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2024 (12) TMI 256
X X X X Extracts X X X X
X X X X Extracts X X X X
....he same is also allowed. 3. In this group of Appeals, the appellants have challenged the order passed by the Tribunal under Section 260A of the Income Tax Act, 1961 (for short 'the Act') raising the proposed questions of law. The facts relating to each of the Appeals are summarised in the chart below : Name of Assessee ITA No. AY Addition CIT(A) Order ITAT Order Dilkhush Annaraj Babel 443/2023 2008-09 1.14 Crores 12.03.2019 (Pgs 15-34) 13.04.2022 (Pgs 35-69) 444/2023 2012-13 3.39 Crores 09.10.2019 (Pgs 9-28) 13.04.2022 (Pgs 29-63) 448/2023 2014-15 13.86 Lakhs 31.12.2018 (Pgs 21-38) 13.04.2022 (Pgs 39-73) 456/2023 2013-14 33.25 Lakhs 31.12.2018 (Pgs 12-28) 13.04.2022 (Pgs 29-63) Narayan Tulsiram Sharma 445/23 2007-08 2.49 Crores 08.06.2017 (Pgs 7-27) 13.04.2022 (Pgs 28-62) 446/23 2008-09 1.23 Crores 22.02.2018 (Pgs 25-59) 13.04.2022 (Pgs 60-94) Ashish Mohan Mahawar 447/23 2007-08 26.02 Lakhs 31.12.2018 (Pgs 13-33) 13.04.2022 (Pgs 34-68) 4. The proposed questions which are substituted by draft amendment are as under : "(a) Whether in the f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nds. For the relevant Assessment Years, the cases of the appellants-assessees were re-opened on the basis of the information received from DIT (Inv.), Mumbai that assessees are beneficiaries of bogus purchase bills provided by Pravin Kumar Jain Group. On Pravin Kumar Jain Group a search and seizure action was carried out by Investigation Wing on 01.10.2013 and during course of search, it was established that this group concern was managing various firms, companies, proprietorship firm with no real business and solely operating for the purpose of facilitation of fraudulent financial transaction providing accommodation entries in the form of unsecured loan to interested parties, issuing bogus sales and purchase bills and providing funds to concerns who do not want to import diamonds in their own hands. On the basis of such credible information, the Assessing Officer formed his opinion that income to the extent of purchases/sales shown from various concerns of Pravin Kumar Jain has estimated assessment. The Assessing Officer further noted that during the relevant period, the purchases made by the various appellants-assessees were bogus and after recording the modus-operandi and reason....
X X X X Extracts X X X X
X X X X Extracts X X X X
....IT (Appeals) considering the addition on account of disputed bogus purchases shown from various entities managed by associates of Pravin Kumar Jain held that the Assessing Officer has not rebutted or discharged the material evidence furnished by the assessee nor doubted the sales and considering the documentary evidence produced on record by the assessee, the CIT (Appeals) followed its earlier order in case of Gangani Impex for Assessment Year 2013-14 and relying upon various other decisions of the Tribunal of the similarly situated appellents-assessees in whose case the additions were made due to the search operation in case of Pravin Kumar Jain Group restricted the addition to the extent of 5%. 5.5. Being aggrieved by the order of the CIT (Appeals), both the appellants-assessees and revenue preferred the Cross-Appeals before the Tribunal. The assessees were aggrieved by the addition of 5% of the disputed/bogus purchases whereas, the Revenue has filed the Cross-Appeals restricting such addition to 5%. 5.6. It was canvassed before the Tribunal that the case of the assessees are similar to that of the case of the Jitendra Kumar Jain where a survey was conducted under Section 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n entries. The assessee for the first time after more than ten years has raised this plea that assessee is a part of syndicate of operator who were earning commission by providing entries. At the time of hearing, we are specifically asked Ld. AR of the assessee to show if such plea was ever raised before lower authorities or any statement of facts filed before Ld. CIT(A) while hearing submission of admission of additional evidence. The Ld. AR of the assessee submits that these facts were nowhere pleaded; however, the assessee came to know about the facts only on when the assessee lays his hand on the assessment order of Jitendra Kumar Jain. In our considered view, the fact required for adjudication of additional ground of appeal are not emanating from the order of lower authorities, therefore the additional ground of appeal raised by assessee are not admitted." 5.7. With regard to the admission of additional evidence in case of Navratan Jain, the Tribunal held as under : "13. Now adverting to the admission of additional evidence, the assessee is seeking permission to file the assessment order of Jitendra Kumar Jain for assessment years 2007-08 and 2008-09 respectively a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o.3 relates to rejection of books of account under section 145 of the Act as recorded above that no submission was made by either of the parties on this ground as well. During assessment the assessing officer held that the purchase shown by assessee in the books of account is bogus. Mere filing evidence in support of purchase and showing payments through account payee cheque cannot be a conclusive in case where genuine of transaction is doubted to the payments made by account payee cheques are not sacrosanct. On the basis of aforesaid observation, the Assessing Officer held that the purchases made by assessee from the said disputed parties and claim expenses in his profit and loss account are not genuine and rejected the books result of assessee. The Id CIT(A) upheld the action of assessing officer. In absence of any specific submission, we do not find any reason to deviate from the order of Ld. CIT(A). This ground of assessee's appeal is dismissed." 5.10. With regard to the grievance raised by both the appellants-assessees and revenue for restricting the addition to 5% of the purchases, the Tribunal enhanced the same to 6% by observing as under : "16. Ground No.4 i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ogus purchase and on first appeal before CIT(A) the disallowances were maintained. However, the Tribunal gave partial relief to the assessee directing to sustain the addition @12% of such bogus purchases. And on further appeal, the Hon'ble High Court sustained Gross Profit Rate @ 5% being average rate of profit in industry. 18. We find that considering the aforesaid overall facts and circumstances of the present case, we are of the view that disallowances 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. 4 raised by the assessee is dismissed and that of ground of appeal raised by Revenue are partly allowed." 5.11. The aforesaid observations were made in case of the Navratan Jain in ITA No. 105/SRT/2019 by the Tribunal which were also decided by the common order passed by the Tribunal along with the cases of the appellants-assessees. 5.12. This Court by order dated 17.04.2023 in Tax Appeal Nos.11 and 12 of 2023 arising out of the ITA No.105 of 2019 in case of Navratan Gautam Singh Jain considered the above proposed questions of law in these Appeals while dismissing the Appeals....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ional grounds of appeal are concerned, the same are not emanating from the order either Assessing Officer or from the Commissioner of Income Tax (Appeal), hence, the same were rejected. So far as the admission of additional evidence is concerned, the learned Tribunal has observed that the said documents have no relevance with the facts of the case. On perusal of the decision rendered by the Assessing Officer, it is found that the Assessing Officer received information from DIT (Inv.), Mumbai that the appellant is one of the beneficiaries of bogus purchase bills provided by one Pravin Kumar Jain Group. Upon investigation, it was found that the assessee was one of the beneficiaries for providing accommodation entries in the form of bogus sales/purchase bills and thereby assessed the income on account of bogus purchases at Rs.25,65,84,238/-. 5.2 Both the Assessee as well as the Revenue preferred respective appeals before the Income Tax Appellate Tribunal challenging the order of CIT(Appeals)-1. The Tribunal partly allowed the appeal of the Revenue and the appeal of the assessee came be to dismissed. The Tribunal after taking into consideration all the materials available on r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....be admitted on the proposed questions of law. 6.3. It was further submitted that these are the cases of the appellants-assessees that the Assessing Officer ought to have invoked the provisions of Section 153C of the Act instead of reopening the assessement under Section 147 of the Act as the Assessing Officer has relied upon the material seized during the course of search for making addition in the hands of the appellants-assessees. 7. Having heard the learned advocate for the appellants-assessees, it is not in dispute that the Tribunal has followed its decision in case of Navratan Gautam Singh Jain in ITA No.105/SRT/2019 which has been considered by this Court while dismissing the Tax Appeals being Tax Appeal Nos.11 and 12 of 2023 as stated herein above. Therefore, in the facts of the cases when both the CIT (Appeals) and the Tribunal have not given any independent finding while exercising the jurisdiction under Section 260A of the Act which is akin to Section 100 of the Code of Civil Procedure, 1908, in order to maintain the consistency and in absence of any finding arrived at by the Tribunal or the CIT (Appeals) in the order pertaining to the grounds raised by the assessee....