TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 1745
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..... 37,52,890 treating as bogus purchases under section 68 of the Act, by relying on third party statement without rejecting books of accounts and without pointing out of any defects in maintenance of books of accounts and ignoring the bills submitted. 4. Succinct facts are that a search and seizure operation carried out on 03.10.2013 in the case of Bhanwarlal Jain Group revealed that this group was involved in providing bogus accommodation entries. During the year under consideration, the assessee has taken accommodation entries of Rs. 16,45,630 from Rajan Diamond and Rs. 21,07,260 from Navakar Diamond aggregating to Rs. 37,52,630 in the form of purchase who are being controlled by the Shri Bhanwarlal M. Jain. Accordingly, notice under section 148 of the Act was issued on 28.03.2014 after recording reasons. In response to which, return of income was filed on 03.06.2014. During the course of assessment proceedings, the AO had issued a summon under section 131 of the Act on 25.02.2015, by speed post to both parties, which did not return un-served. The AO also sent Inspector(ITI) for personal service, who visited the premises and serve summon by affixture. The ITI....
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.... appellant wide his submissions dated 26. 08. 2016 submitted that it is not possible to provide the current addresses of the sellers for verification, nor it is possible to produce these parties. Thus, the appellant has failed to prove the very existence/identity of the 2 parties, in spite of allowing several opportunities. The evidence found by the Investigation Wing duly revealed the modus operandi of providing accommodation entries by Bhanwarlal Jain Group. The examination and analysis of the statement on oath revealed that the actual importers of rough diamonds import part of the diamonds from the benami concerns operated by Shri Bhanwarlal M. Jain, with the view to suppress their turnover, profits and capital requirement. The contention of the appellant that apart from the said statement no other evidence was found but this argument has no force as also not legal support because that is statement recorded under section 132 (4) is an evidence by itself. The retraction by Shri Bhanwarlal M. Jain from the statement on oath is an afterthought to escape the tax liability. Shri Bhanwarlal M. Jain, while retracting from the statement on oath could not bring on record any facts or evi....
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.... assessee. However, the AO has not provided any opportunity for cross-examination and rebuttable of the evidences which were against the assessee. Thus, this is a clear violation of the rule of natural Justice. Therefore, the learned Counsel placing reliance on the decision of Honourable Supreme Court of India in the case of Commissioner of Income-Tax -7 New Delhi vs. M/s. Odeon Builders Pvt. Ltd. in Review Petition(C) Diary No. 22394 of 2019 dated 21.08.2019 (Case laws Paper Book Page No. 23 to 25) wherein the Hon`ble Supreme Court observed as follows : However, ongoing through the judgements of the CIT, ITAT and the High Court, we find that on merits he disallowance of Rs. 19, 39, 60, 866/- was based solely on third party information, which was not subjected to any further scrutiny. Thus, the Ld. CIT(Appeals) allowed the appeal of the assessee is stating: "Thus, the entire disallowance in this case is based on third party information gathered by the Investigation Wing of the Department, which have not been independently subjected to further verification by the AO who has not provided the copy of such statements to the appellant, thus denying the opportunity of....
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....material on record. We find that the assessee submitted that copies of purchase invoices of Rs. 21,07,260 dated 18.01.2007 from Navkar Diamond and purchase invoice of Rs. 16,45,630 dated 15.02.2007 from Rajan Diamond were filed before the AO. The confirmation accounts of both parties were filed for the year under consideration and subsequent assessment year in which payments made by account payee cheques from the appellant were filed, along with copies of bank statement and bank book from two suppliers. Further the day to day stock register of cut & polished diamonds maintained regularly identifying the inward quantity of diamond purchased for above two parties were filed along with copy of purchase register. The assessee has also requested to cross examination of Shri Bhanwarlal M. Jain right from beginning but same was not allowed, on the contrary pressurized the assessee to produce the suppliers. Therefore, nonproduction of suppliers after gap of 9 years cannot be viewed adversely. We find that the CIT (A) vide order sheet entry dated 25.07.2016 has directed the assessee to provide current addresses of suppliers for verification purpose as the AO was not able to locate....
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....is case as in that case the addition was made solely on third party information which was not subjected to further scrutiny, whereas in the present case, the AO has carried out further inquiry through Inspector who did not find the parties on the addresses supplied by the assessee. The assessee has failed to produce the parties before CIT (A) where specifically required and also failed to provide current address of the parties. Further, the parties concerned have not made any compliance of summons issued under section 131 by the AO. Further, Shri Bhanwarlal M. Jain has admitted in his statement recorded under section 132(4) of the Act during the course of search and seizure operation conducted in their case have admitted that they used to provide bogus accommodation bills. However, we note that the AO treated the whole amount of Rs. 37,52,890 as bogus purchases. The assessee has duly produced the copies of bills, invoices and payments is made by account payee cheques. This shows that purchases have been made, but may be not from the party from whom purchases bills have been obtained. The only possibility is therefore, is that the assessee might have inflated the purchases, as ....