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2015 (11) TMI 1537 - ITAT DELHI

2015 (11) TMI 1537 - ITAT DELHI - TMI - Validity of the reassessment - sustenance of the addition to the extent of 20% of the purchases - Held that:- Reassessment quashed as barred by limitation.

Now coming to the merit about the sustenance of the addition by the CIT(A) @ 20% of the purchases made by the assessee from Shri Bankey Bihari Trading Co., after hearing the rival submissions it is held tax has to be levied on real income and the profit cannot be ascertained without deducting .....

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he trading results declared by the assessee cannot be accepted and right course in such case is to reject books of accounts and profit has to be estimated by applying a comparative profit rate in the same trade. Though there can be a little guess work in estimating profit rate but such profit rate cannot be punitive. - ITA No. 1429/Del/2015 - Dated:- 30-11-2015 - SHRI P.K. BANSAL: ACCOUNTANT MEMBER For the Appellant: Shri Ved Jain FCA For the Respondent: Shri P. Dam Kanunjna Sr. DR O R D E R Thi .....

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ened on the allegation that the assessee had made bogus purchases. The assessment was completed by the AO by making addition of ₹ 4,73,855/-, treating the entire purchases made by the assessee from M/s Shree Bankey Bihari Trading Company, to be the accommodation entries. 3. The assessee went in appeal before the CIT(A). The CIT(A) upheld the validity of the reassessment, but reduced the addition to 20% of the purchases, amounting to ₹ 94,771/-. 4. The issues involved in various groun .....

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o. AddI.CIT/(Hq)/(Coord.)/ Accommodation entry/2012-13/15016 dated 26-03-2013 was received from the Office of the Chief Commissioner of I. Tax, Delhi-I, New Delhi therein forwarding letter bearing F. No. CIT(C)-1I/2012-13/3898 dated 19.03.2013 received from the Commissioner of I. Tax, Central-II, New Delhi along with a CD containing the details of accommodation entries provided by Sh. Rakesh Gupta & Sh. Vishesh Gupta and Sh. Navneet Jain & Vaibhav Jain and directing this office to take n .....

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a, Sh. Navneet Jain & Sh. Vaibhav Jain are under process with the ACIT, Central Circle-10. During the assessment proceedings u/s 153A in the aforesaid cases, details regarding accommodation entries given by the above entry providers has been obtained by the A.D. 3. The list of accommodation entry recipients has been obtained from Sh. Rakesh Gupta and Sh. Vishesh Gupta. Hard copy of the list is enclosed as Annexure A, duly signed by Sh. Vishesh Gupta. The list gives the name of the firm which .....

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uly signed by Sh. Vaibhav Jain. Thus, the firms mention in the list 'B' have provided accommodation entries to the firms mentioned in list 'C'. 5. The soft copy of the information in respect to annexure A, B & C is also enclosed. 6. The information of accommodation entry includes A.Y. 2006-07 also, which is a time barring year for taking action u/s 148. 7. This information is forwarded to you for early dissemination to various field offices in Delhi (Soft copy also enclosed). .....

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855/- Total amount of entries= ₹ 4,73,855/- Since Sh. Rakesh Gupta & Sh. Vishesh Gupta and Sh. Navneet Jain & Sh. Valbhav Jain during the course of assessment proceedings u/s 153A of I. Tax Act have admitted that they have given accommodation entries to the parties whose lists have been provided by them to the ACIT, Central Circle-10, New Delhi, therefore, it is fair to conclude that M/s Radhay Shyam & Co., whose name is appearing in the said list, has taken accommodation entri .....

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nsideration and necessary approval u/s 151(2) of the I. Tax Act, 1961 as the same is getting barred by limitation on 31/3/2013. If approved, notice u/s 148 of the act may be issued. Sd/- 28.3.2013 (Pawan Kumar Vashist) Income Tax Officer Ward-39(3), New Delhi. 5. I found that the issue regarding the validity of the reassessment is duly covered by the decision of this Bench in the case of Unique Metal Industries Vs. ITO in ITA no. 1372/Del/2015 in which this Tribunal vide its order dated 28-1-201 .....

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8 dated 19.03.2013 received from the Commissioner of I. Tax, Central-II, New Delhi along with a CD containing the details of accommodation entries provided by Sh. Rakesh Gupta & Sh. Vishesh Gupta and Sh. Navneet Jain & Vaibhav Jain and directing this office to take necessary action as per section 148 in respect of entries pertaining to A.Y. 2006- 07, which is time barring on 31.03.2013. The information provided by the CIT, Central-II, New Delhi vide his letter dated 19.03.2013 reads as u .....

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y providers has been obtained by the A.O. 3. The list of accommodation entry recipients has been obtained from Sh. Rakesh Gupta and Sh. Vishesh Gupta. Hard copy of the list is enclosed as Annexure A, duly signed by Sh. Vishesh Gupta. The list gives the name of the firm which has provided the accommodation entry along with the name and address of the recipients of accommodation entry. 4. Sh. Navneet Jain & Sh. Vaibhav Jain has provided accommodation entry through thirty-seven paper entities. .....

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amp; C is also enclosed. 6. The information of accommodation entry includes A.Y. 2006-07 also, which is a time barring year for taking action u/s 148. 7. This information is forwarded to you for early dissemination to various field offices in Delhi (Soft copy also enclosed)." On examining the list of accommodation entries provided by Sh. Rakesh Gupta & Sh. Vishesh Gupta and Sh. Navneet Jain & Sh. Vaibhav Jain pertaining to A.Y. 2006-07, it is noticed that the following accommodation .....

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Gupta and Sh. Navneet Jain & Sh. Valbhav Jain during the course of assessment proceedings u/s 153A of I. Tax Act have admitted that they have given accommodation entries to the parties whose lists have been provided by them to the ACIT, Central Circle-10, New Delhi, therefore, it is fair to conclude that M/s Radhay Shyam & Co., whose name is appearing in the said list, has taken accommodation entries from Sh. Rakesh Gupta & Sh. Vishesh Gupta and Sh. Navneet Jain & Sh. Vaibhav Jai .....

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g barred by limitation on 31/3/2013. If approved, notice u/s 148 of the act may be issued. Sd/- 28.3.2013 (Pawan Kumar Vashist) Income Tax Officer Ward-39(3), New Delhi. 6. Since in the case of Unique Metal Industries (supra), similar reasons were recorded, as have been recorded in the case of the assessee and the party from which the assessee made the purchases were Shri Bankey Bihari Trading Co., which is a party in the case of the assessee, therefore, respectfully following the decision of th .....

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