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2018 (3) TMI 730 - AT - Income TaxGenuineness of the transactions of purchase and sale of diamonds - Held that:- Undisputedly the trading in diamond has been claimed by the assessee only during the year under consideration. It is also not disputed that the assessee has made 5 purchases and 7 sales transactions only with two parties each for purchases and sales. To verify the genuineness of the transactions and particularly in view of the facts that the assessee has claimed loss of ₹ 54,43,913/- to be set off against the short term capital gain the AO conducted the enquiry and investigation through ADIT, Surat as these two parties namely M/s Makoda Exim Pvt. Ltd. and M/s Pulkit Impex Pvt. Ltd. were stated from Surat. Even the notices issued u/s 133(6) were received back with the postal remarks the parties were not available at the given address. AO issued commission u/s 131(b) to the ADIT investigation, Surat to verification the genuineness of the transactions of purchase and sale of diamonds. In its report the ADIT has stated that none of the parties from whom the assessee has claimed to have purchased the diamonds were available at the addresses given by the assessee. AO has given its finding on the basis of the report of the ADIT that these parties are not found at the given address and therefore, there was none existence of the parties. CIT(A) has confirmed the action of the AO when the assessee has failed to file any evidence to controvert the facts as reveals in the investigation carried out by the AO. Additional evidence in support of the claim that these parties have shifted their addresses and therefore, they were not found at the given address. The assessee has also sought to produce PAN and return of income filed by these two parties to show the identity and existence of these parties. The assessee has also sought to produce the bank statement of these parties showing the entries of the payments made by the assessee. Thus, the additional evidence sought to be produced by the assessee are very much relevant for adjudication of the issue and most of these evidences are independent and not created by the assessee or the other parties except the confirmation and letter of change of address. The considered view that the matter requires to be reconsidered and adjudicated after carrying out proper verification in respect of the additional evidence filed by the assessee.
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