TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 1668
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....ent assessment years. In all appeals, the assessees have raised certain common grounds of appeal, facts in all cases are almost similar except variation of figures of amounts. Therefore, with the consent of the parties, all the appeal were clubbed, heard and are decided by consolidated order to avoid conflicting decision. With the consent of parties, appeals of assessee, Navratan Jain in ITA No.105/SRT/2019 Assessment Year 2008-09 was treated as "lead" case and the decision thereof would apply on all appeals. 2. The assessee has raised following grounds of appeal: 1. On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in reopening the assessment u/s 147 by issue of notice dated 30.03.2015 which is barred by limitation in view of the first proviso to sec 147 of Income Tax Act, 1961. 2.On the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) erred in reopening the assessment u/s 147 by issue of notice dated 30.03.2015 u/s 148 which is merely due to change of opinion and therefore the reopening is bad in law. 3.On the facts and circumstances of the case and in law, the Ld. Commiss....
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....nds in the name of Proprietary concern 'Sai Krupa Trading Co'. The assessee filed his return of income for assessment year 2008-09 declaring of Rs.2,89,947/- on 25.09.2008. The case of assessee was reopened on the basis of information received from DIT(Inv.), Mumbai that assessee is one of the beneficiaries of bogus purchase bills provided for Pravin Kumar Jain Group. On Pravin Kumar Jain Group, a search and seizure action was carried out by Investigation Wing on 08.10.2013. During the course of search, it was established that this group concern was managing various firm, company proprietorship, firm with no real business and solely operating for the purpose of facilitation of fraudulent financial transactions which providing accommodation entry in the form of unsecured loan to interested parties, issuing bogus sales and purchase bills and providing front to concerns which 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 concerned of Pravin Kumar Jain as estimated assessment. The Assessing Officer further noted that during the relev....
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....stated that documents furnished by assessee, clearly show that purchase are made and subsequently goods were sold to other parties which are evident from the stock register. The statement of third party cannot be used against the assessee. Pravin Kumar Jain Group is neither proprietary nor signatory in all the concerns from which the assessee has shown purchases. The assessee is not provided the statement of Pravin Kumar Jain nor any opportunity of his cross-examination as provided the assessee relied on a number of case law and prayed that no addition can be made on the statement of third party without any concrete evidence against the assessee. The purchases of assessee are genuine. The reply of assessee was not accepted by Assessing Officer. The Assessing Officer on the basis of report of Investigation Wing held that during the search & seizure action, which was conclusive group and Pravin Kumar Jain and his group, was engaged in the business of providing accommodation entry. The assessee has shown purchases from such bogus entity with a modus operandi to reduce his true income by inflating expenses. The books of assessee to the extent of purchases shown from such bogus parties ....
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....atement, evidencing the payments and the stock register and claim that they have discharged their onus to substantiate the genuineness of said purchases. 8. The Ld. CIT(A) after considering the submission of assessee on validity of re-opening held that quashing the re-opening and assessment would mean to given undue benefit of mistake of individual officer, which is neither fair nor equitable for the Revenue. However, on the addition on account of disputed / bogus purchases shown from various entities managed by associates of Pravin Kumar Jain, the Ld. CIT(A) held that the Assessing Officer has not rebutted or discarded the material evidence furnished by assessee nor doubted the sales. The Assessing Officer has not made any efforts to find out whether Pravin Kumar Jain is a proprietor / partner or director of the concern from whom the assessee made purchases. The assessee in his submission has demonstrated that purchases in quantity are duly entered in the stock register and corresponding sales have been made. The sale could not be made in absence of purchases. Hence, the impugned purchases cannot be denied in the quantitative terms. The Ld. CIT(A) held that on identical issue in ....
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....see has accessed to such assessment. The assessee is also able to obtain the statement of Jitendra Kumar Jain, wherein he has also provided my statement recorded, the statement of assessee under section 133A of the Act about blank signed and unsigned cheque book of Sai Kripa Trading Co., the proprietor concern of assessee. The Ld. AR of the assessee by referring the various paragraphs of assessment order of Jitendra Kumar Jain submits that the case of assessee is similar to that case of Jitendra Kumar Jain. The assessee was also earning commission on providing accommodation entries. The Ld. AR of the assessee submits that the additional evidences are vital piece of evidence and require consideration, which has material hearing on the huge addition made against the assessee. 11. On the other hand, Ld. CIT-DR for the Revenue strongly objected the admission of additional evidence. The Ld. Ld. CIT-DR submits that assessee has taken a "U" turn and now came with the fresh plea, which was never reached either before the Assessing Officer or Ld. CIT(A). The case of assessee throughout the proceeding before lower authorities was that he is a trader engaged in the trading of diamond. The as....
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....corded on oath and material found during the survey under section133A of the Act revealed that assessee was engaged in proving accommodation bills. We find that there is no such fact that in the assessment order, or in the order of First Appellate Authority. However, we find that Ld. AR of the assessee is trying to bring this fact on the basis of survey conducted at the premises of Jitendra Kumar Jain and the Assessing Officer of Jitendra Kumar Jain for AY 2007-08 and 2008-09 respectively. We find that this fact referred in case of Jitendra Kumar Jain are not emanating from the order of lower authorities in the present case. Moreover, the stand of assessee, throughout the proceeding before lower authorities are that assessee is a trader and the purchases shown by him are genuine. The assessee is nowhere pleaded that he is a part of syndicate who are engaged in providing accommodation 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....
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....the grounds, we are considering the facts available on record. The Assessing Officer made reopening by recording the reasons on the basis information received from Investigation Wing about the syndicate being operated by Pravin Kumar Jain and his group for providing accommodation entry. The Hon'ble jurisdictional High Court in the case of Pass Industrial Engineers Pvt. Ltd. vs. DCIT 77 taxman.com 185 (Guj) held that when the Assessing Officer received information from Investigation Wing, that hawala entry operator provided bogus entries to beneficiary and assessee was one of such beneficiary. The Assessing Officer was justified in re-opening assessment. Considering the decision of Hon'ble jurisdictional High Court in the case of Pass Industrial Engineering Pvt. Ltd. (supra), the ground Nos .1 & 2 raised by assessee are dismissed. 15. Ground No.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 showi....
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....eal No.CAS-3/512/2015-16 dated 24.11.2016, Ld. CIT(A), he by relying various other decisions of Tribunal restricted the addition to the extent of 5%. The Ld. CIT(A) restricted the addition to the extent of 5% of such disputed / impugned purchases. We also find that the ld.CIT(A) also considered the decision of jurisdictional High Court in Mayank Diamonds Pvt. Ltd. (supra) and compared the fact of the present case with the facts in Mayank Diamonds Pvt Ltd (supra) and noted that assessee in that case was also engaged in the trading of polished diamonds. The ld CIT(A) noted that in that case the AO made disallowance of entire bogus 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 ....
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....the statement on oath given by the entry provider." 23. Considering our decision in para-13, 14 in dismissing the additional grounds of appeal and rejection of admissions of additional evidences and 18 (supra) on merit, wherein we have sustained the disallowance @ 6% of the disputed / bogus purchases, thus, following the principal of consistency the appeal of the revenue is partly allowed and the appeal of the assessee is dismissed. ITA No. 258 & 259/SRT/2019 (AY 14-15 & 15-16) 24. The assessee has raised the following respective grounds in assessment year-wise:- "(AY-2014-15) 1. On the facts and circumstances of the appellant's case and in law the Ld. Assessing Officer failed to provide an opportunity of cross-examination of the parties on whose statements the Ld. Assessing Officer relied upon as per the grounds stated in the order or otherwise. 2. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in confirming the action of rejection of books of account u/s 145, on the grounds as stated in the impugned orders or otherwise. 3. On the facts and circumstances of the appellant's case and in law the Ld.....
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....13.03.2015 u/s 148 which is merely due to change of opinion and therefore the re-opening is bad in law. 3. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in confirming the action of rejection of books of account u/s 145, on the grounds as stated in the impugned orders or otherwise. 4. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in restricting the disallowance of Rs.21,58,482/- as unexplained purchases being 5% of the alleged bogus purchases on the grounds as stated in the impugned orders or otherwise." 27. Further, the assessee has filed following additional grounds of appeal on 01.04.2022:- "The assessee prefers an additional grounds of appeal against an order passed by Ld. Commissioner of Income Tax (A)-1, Surat dated 30/01/2019 on following amongst other grounds each of which are without prejudice to any other:- 1. On facts and circumstances of the case and in law, the addition of nongenuine purchases made in assessment order and partly sustained in 1st appeal is erroneous, since the assessee's statement recorded on oath and ....
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..... On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in confirming the action of Ld. AO in reopening the assessment u/s 147 by issue of notice dated 29.03.2014 u/s 148 which is barred by limitation in view of the first proviso to section 147 of the Income Tax Act 1961. 3. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in confirming the action of LD. AO in holding that the assessee has entered into accommodation transactions of bogus purchases with Pravin Kumar Jain group without any material evidence on record. 4. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in disallowing a sum of Rs.5,18,60,076/- being 12.5% of the alleged bogus purchases amounting to Rs.41,48,612/- in an arbitrary manner as per grounds stated in the order or otherwise. 5. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in estimating the gross profit on alleged bogus purchases @ 12.5% without any cogent material on record." 32. Fu....
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....t recorded on oath and material found during survey u/s 133A revealed that the assessee was engaged in providing accommodation bills, resultantly only real commission income on disputed transactions could utmost be brought to tax; 2. A prayer is made to estimate the brokerage income @ 0.05% of disputed purchases, since the AO, in assessment order of mastermind person Shri Jitendra Kumar Jain, had already estimated the commission @ 0.50% of transaction value. 34. The Revenue has raised the following grounds of appeal: "i) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition of Rs.36,30,20,536/- made on account of accommodation entry pertaining to bogus purchases. ii) On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in estimating income @ 12.5% of total unverifiable purchases of Rs.41,48,80,612/- without appreciating the fact that a search and seizure action was carried out by the Investigation Wing Mumbai co Shri Pravin Jain and others group of cases of Mumbai on 01.10.2013 which resulted in collection of evidences and other findings, which conclusively proved that the said Shri Pravin Ku....
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....e Ld. Commissioner of Income Tax (Appeals) erred in reopening the assessment u/s 147 by issue of notice dated 12.03.2015 u/s 148 which is merely due to change of opinion and therefore the reopening is bad in law. 3. On the facts and circumstances of the appellant's case and in law the Ld. Assessing Officer failed to provide an opportunity of cross examination of the parties on whose statements the Ld. Assessing Officer relied upon as per the grounds stated in the order or otherwise. 4. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in confirming the action of rejection of books of account u/s 145, on the grounds as stated in the impugned orders or otherwise. 5. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in restricting the disallowance of Rs.94,74,320/- as unexplained purchases being 5% of the alleged bogus purchase on the grounds as stated in ethe impugned orders or otherwise. AY 2012-13: 1. On the facts and circumstances of the appellant's case and in law the Ld. CIT(A) erred in confirming the action of ld. AO in holding tha....
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....pon as per the grounds stated in the order or otherwise. 3. On the facts and circumstances of the appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in restricting the disallowance of Rs.2,50,000/- as unexplained purchases being 5% of the alleged bogus purchases on the grounds as stated in the impugned orders or otherwise." 38. Further in all assessment years the assessee has raised identical additional, following grounds of appeal; "The assessee prefers an additional grounds of appeal against an order passed by Ld. Commissioner of Income Tax (A)-1,Surat on following amongst other grounds each of which are without prejudice to any other:- 1.On facts and circumstances of the case and in law, the addition of nongenuine purchases made in assessment order and partly sustained in 1st appeal is erroneous, since the assessee's statement recorded on oath and material found during survey u/s 133A revealed that the assessee was engaged in providing accommodation bills, resultantly only real commission income on disputed transactions could utmost be brought to tax; 2.A prayer is made to estimate the brokerage income @ 0.05% of disputed purchases, since....