TMI Blog2022 (11) TMI 520X X X X Extracts X X X X X X X X Extracts X X X X ..... the profit margin in such suspicious purchases to 4% as against estimation of 8% made by the AO. Thus we are of the considered view that addition made by AO should be restricted upto 4% of the total addition made. We delete the addition made by the AO and restrict the same upto 4%. Appeal filed by the assessee partly allowed. - ITA No. 1981/Mum/2021 - - - Dated:- 8-9-2022 - SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER Appellant by : Mr. Suchek Anchaliya Respondent by : None ORDER PER GAGAN GOYAL, A.M: This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi [hereinafter referred to as [ NFAC ] dated 11.09.2021 passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as [ the Act ] for the Assessment Year (AY) 2012-13. The assessee has raised the following grounds of appeal: 1. On the facts and in the circumstances of the case and in law the Ld. CIT (A) erred in not considering that the assumption of jurisdiction by the Ld. Assessing Officer is bad in law as the conditions laid down under the Act for initiating reassessment proceeding u/s 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation from the DGIT (Investigation), Mumbai that assessee had taken accommodation entries from a transactions with Bhanwarlal Jain Group (who are entry/Accommodation bill providers) of Rs.5,30,530/- the details are as under: Sr. Name of the hawala entities Amount involved (in Rs.) 1 Naman Exports (Bhanwarlal Jain Group) 5,30,530/- Total 5,30,530/- 7. Before proceeding further, a brief background of the conclusion derived by the Investigation Wing in respect of the modus operandi involved in the Diamond industry for issuance of fake bill is first discussed. The Mumbai Investigation Wing, through some discrete enquiries, came to know about one Syndicate Groups operated by a man namely Shri Bhanwarlal Jain who along with his some trusted men, was exclusively engaged in the business of issuing non genuine purchase bills and also unsecured loan accommodation entries' to various interested parties. It was well established during the search and seizure operation that the concerns managed by Shri Bhanwarlal Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice from assessee. Hence, AO made addition of Rs. 5,30,530/-. 11. Being aggrieved with the order of AO, assessee preferred an appeal before the Ld. CIT (A)-30, Mumbai (NFAC). Here also assessee was not succeeded and order of AO was upheld, in turn assessee preferred an appeal before ITAT. 12. We have gone through the order of AO, order of Ld. CIT (A) and Paper Book filed before us on 10.06.2022. We observed that assessee faced similar action in A.Y. 2010-11 also wherein the then Ld. CIT (A)-18, Mumbai dealt with the same issue and we have not found any evidence of further appeal by the assessee against the order of Ld. CIT (A)-18, Mumbai for A.Y. 2010-11. 13. The goods purchased from the above party have been sold and quantitative tally thereof given in the tax audit report u/s 44AB of the Act and the same is perfectly tallied with books of accounts. It is fundamental accounting principal that once the sale is accepted than the purchase cannot be doubted. Reliance is placed in case of G.G. Diamond International v Dy. CIT (2006) 104 TTJ 809 (Mum.] (Trib.) and Balaji Textile Industries (P) Ltd vs. ITO [1994] 49 ITD 177 (Mum.) The quantity details and movement of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch parties were engaged in providing bogus bills and no actual goods or services are delivered by them to their customers and they issued bogus bills after charging small commission. The Assessing Officer has also held that there cannot be any sales/work without purchases being made and hence the Assessing Officer has not doubted the purchases of goods as such and in effect has held that the appellant has inflated such purchases. From the above, it is evident that the Assessing Officer neither has doubted nor has held the purchases under considerations are bogus. The only finding of the Assessing Officer is that the said purchase were not made from the above referred dealer/party, but were purchased from somewhere else, i.e. from open/grey market. Further, the Assessing Officer has not doubted the genuineness of sale/work effected and has taxed the same as such. 16. The facts and circumstances of the case suggests that the appellant had purchased the goods under consideration not from above referred party but from some other suppliers in grey market, may be without bills. Any person indulging in the practice of purchasing the goods from the grey market and obtaining bogus bills ..... X X X X Extracts X X X X X X X X Extracts X X X X
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