TaxTMI 
TaxTMI 
2024 (12) TMI 1256
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...., 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2013-14. 2. The assessee has raised the following grounds of appeal: 1. The Ld. CIT (A) has erred in law and on facts in restricting the disallowance made on account of unexplained bank deposit and withdrawal u/s. 68 of IT Act of Rs. 88,83,16,516/- to Rs. 16,67,100/- @ 0.30% of total Circular Trading Transaction of Rs. 55,57,00,000/- 2. The Ld. CIT (A) has erred in law and on facts in holding that the circular trading is not a case of estimation of net profit on circular purchase but it was a case where the assessee had incurred expenses of circular purchases but it was a case where the assessee had incurred expenses of circular purchases being intermediate....
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....ssee. The assessee filed the response vide reply dated 25.09.2021. The Assessing Officer observed that during the search in the case of Sanjay Govindram Agrawal various documents relating to financial transactions, most of which were in cash, were also found and seized. During search/post search action 8 name mentioned in para 4 of the Assessment Order who were employees of the Sanjay Govindbhai Agrawal and the bank accounts opened in their name which was stated as accommodation entries provided. The statement u/s 131 of Act was also taken as mentioned in assessment order. During the search proceedings, statement of Sanjay Tibrewal was recorded under Section 132(4). The Assessing Officer further observed that the inquiry report of the ADIT ....
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....ns have common parties for debit and credit transactions. The Ld. DR also relied upon the original assessment under Section 143(2) of the Act wherein the accommodation entry trail was also mentioned and therefore, as regards to 0.30% restricting the original trading transaction on part of the CIT(A) is not justifiable. The Ld. DR further submitted that the assessee has incurred expenses of circular purchases being intermediately charges not for the purpose of business, ignoring the fact that the Assessing Officer had concluded that the purchases were not reliable and the extent of such purchases could not be ascertained nor the assessee came forward to explain the same. Thus, the assessee entered into circular trading transactions which sho....
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.... of ADIT, (Inv) Unit-1(2) and assessee took accommodation entries totaling to tune of Rs. 88,83,16,516/-. It was also submitted by the ld. AR that the Assessing Officer, while reopening the case, relied on letter of DDIT (Inv.) Unit 1(2), Ahmedabad dated 14-03-2020, date wise transaction details & bank statement, and statements of Shri Sanjay Tibrewal, Shri Pradeep Agrawal, Shri Harish M. Purohit, Shri Hasmukh Purohit, Ms. Alpa Shah, Ms. Jigna Shah Sandeep Parmar, Shri Vivek Agrawal, Shri Nitantan Makwana, and Shri Pradeep Agrawal. The Ld. AR also submitted that the Assessing Officer, except reasons for reopening, not provided any document/evidence/statement; and merely relied upon and acted upon borrowed information from DDIT (Inv) Unit- 1....
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....uared off through cheque entries i.e. He further submitted that the accommodation entries were against paper purchases and sale transactions. He also submitted that all such transactions of taking accommodation entries are recorded in books against sale transactions, where against paper sale transaction, cheque through accommodation entry is taken such cheque was issued by POL against paper purchases and rotate back in books/bank through entry provider. However, funds for such transactions are provided by POL to entry provider, entry provider rotate it internally through OFSPL and finally funds revert back in the books/bank of POL. He also submitted that the assessee also placed reliance on its own Assessment Order dated 30-06-2016 wherein ....
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....ating to various sales bills which were issued and circulated amongst these fictitious concerns and finally ended up in sales to M/s. Pradeep Overseas Ltd. by the last entity. This observation has been made by the Assessing Officer in paragraph No.5.1 of the assessment order of assessee M/s. Pradip Petrofils Pvt. Ltd. for AY 2013-14. The Tribunal in the case of M/s. Pradip Overseas Ltd. in paragraph No.6 (ITA No. 790/Ahd/2018, order dated 16.09.2021) observed that M/s. Pradip Overseas Ltd. admitted that it was engaged in Circular Trading wherein the bills/invoices changed hands without movement of physical goods. The Tribunal has categorically observed that this was not a case of estimation of net profit on circular purchases, but this was ....