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2022 (3) TMI 1384 - ITAT MUMBAIReopening of assessment u/s 147 - assessee was not carrying genuine business of trading in diamonds and was engaged only in providing accommodation entries - undisclosed commission income on protective basis - HELD THAT:- We find that this addition made by the A.O has been deleted by the ld. CIT(A) and revenue is not in appeal against the said deletion. GP estimation - gross profit rate declared by the assessee in the year under consideration is too low i.e 1.19% as compared to the gross profit percentage declared by other such concern of the Shri Bhanwarlal Jain group - A.O adopted average gross profit rate of 11.5% and made addition for the difference in gross profit rate of 10.31% [11.5 (-) 1.19] - HELD THAT:- As assessee submitted that the Income-Tax authorities cannot blow hot and cold in the same breath. According to him if Income Tax Department has accepted the assessee as controlled and managed by Shri Bhanwarlal Jain for providing accommodation entries, then addition to compensate gross profit rate is not justified. The ld. D.R also could not controvert the fact that the assessee has been held a concern controlled by Shri Bhanwarlal Jain engaged only for providing accommodation entry bills. In our opinion such circumstances, the lower authorities are not justified in sustaining the addition to cover the low gross profit rate on the basis of books of account of the assessee which has not been accepted by the department and percentage commission has been assessed treating the purchase and sales recorded in books of accounts. Similarly commission income has also been estimated on the unsecured loan advanced by the assessee also. We have noted that in the case of Bhanwarlal Jain, the department has taken stand that accommodation entries have been provided through the assessee concern. The revenue has to take one stand and cannot treat the assessee simultaneously as accommodation entry provider as well as genuine concern engaged in trading of the diamond. In view of the above discussion, we set aside the finding of the ld. CIT(A) on the merit of the addition and direct the A.O to delete the addition - Since, we have already allowed the appeal of the assessee on merit the Ground No. 1 raised by the assessee challenging the legality/validity of reassessment proceedings has been rendered only academic, and therefore we are not adjudicating upon the same. The Ground is rendered infructous and therefore is dismissed.
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