2019 (7) TMI 2084

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....equired to prove the genuineness of the purchases. Assessing Officer also issued notice u/s. 133(6) of the Act to various parties and the said notices were returned unserved with the remarks "not known" by the Postal Authorities. Assessee could not produce the parties. It is the finding of the Assessing Officer that assessee could only furnish the copies of ledger account and bank statements to prove its claim that the transactions were genuine. Finally, the Assessing Officer estimated the profit element at 12.5% from the purchases made from the supplier M/s. Kingstar. On appeal the Ld. CIT (A) sustained the addition. 4. Before me, the Ld. Counsel for the assessee submits that there is no justification in making the addition @12.5% of the bogus purchases on the facts of the assessee's case. Ld. Counsel for the assessee submits that assessee has furnished the confirmation of supplier before the Assessing Officer and the Ld. CIT (A) which was also placed in the Paper Book. Ld. Counsel for the assessee submits that stock reconciliation and quantitative details were furnished before the Assessing Officer and the Ld. CIT (A) and they were also part of the Paper Book. Ld. Counsel for ....

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....DR vehemently supported the orders of the authorities below. 9. Heard rival submissions, perused the orders of the authorities below. In this case the Assessing Officer estimated the profit element at 12.5% from the purchases made by the assessee on the ground that assessee has obtained only accommodation entries without any delivery of goods. Assessing Officer was of the opinion that assessee has made purchases from gray market and has obtained only accommodation entries. Assessing Officer has relied on the statements of Gautham Jain & Others and how the concerns of Gautham Jain have been operated. It is the submission of the assessee that the Gautham Jain Group has nothing to do with the concerns from which the assessee has purchased the diamonds i.e. M/s. Kingstar. It is the submission of the Ld. Counsel for the assessee that the proprietor of M/s. Kingstar is one Mr. Pramod Ranka and he has confirmed the sales made to the assessee. Mr. Pramod Ranka also replied to the summons issued u/s. 133(6) of the Act confirming the sale of goods and physical delivery. Therefore, Ld. Counsel submits that the assessee has filed all the information regarding the purchases including confirm....

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..../2013, wherein you will find the quantitative details of diamonds purchased and sales made against them. ........Pgs94-95A 3. Shri Pramod Kumar Ranka proprietor of King Star is assessed to income tax and under PAN No. ADEPJ3002A 4. He is also registered dealer under the Sales Tax Act and his VAT No. is 27230833585V and his registration number under Central Sales Tax Act is 27230833585C 5. M/s King Star is a regularly filing sales tax return under the above registration number with Sales Tax Authorities. 6. He has filed returns of sales tax for year ended 31/03/2012 and 31/03/2013 wherein he has also included the sales made to me for the year 31/03/2012 Rs. 5637449/-(including VAT Rs. 55816/-} and for 31/03/2013 Rs. 17765461 (including VAT Rs. 175303) 7. I enclose herewith Form No. 704 being Audit Report of M/s King Star under Section 61 of Maharashtra Value Added Tax audited by M/s Nitesh Mahendra Kothari, Chartered Accountants for the years ended 31/02/2012 and 31/03/2013, which gives the entire summary of purchases, sales etc. for the above 2 years which is summarized as under: No. Particulars ....

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....n sales invoices in respect of sales made by me against the purchase of M/s King Star for the year 31/03/2013 totaling to Rs. 18857213 (including Vat) ......Pgs 182-191 17. Enclosed please find bank statements of M/s King Star having their bank account with ING Vysya Ltd for the year ended 31/03/2012 (Five statements), wherein you will find all the payments made towards purchases are appearing in their bank statement and the same are highlighted by yellow mark. .....Pgs 192-195 18. Enclosed please find bank statements of M/s King Star having their bank account with ING Vysya Ltd for the year ended 31/03/2013 (Twelve statements), wherein you will find all the payments made towards purchases are appearing in their bank statement as the same are highlighted by yellow mark. .....Pgs 196-207 19. You will observe from the bank statements of M/s King Star that all the payments made by me towards purchases are through cross account payee cheques. 20. I enclose herewith Statement of Accounts as appearing in the books of M/s King Star for the year ended 31/03/2012 & 31/03/2013. .....Pgs 208-209 21. Enclosed please find copy of affidavit dated 30/1....