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TMI Blog2018 (4) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... luding one namely M/s. Nazar Impex Pvt. Ltd. The modus operandi of providing accommodation entries was found to be as under: "Actual importers of rough diamonds import part of their diamonds through benami concerns operated by Sanjay Choudhury and family with a view to suppress their turnover, profits and capital requirement On receipts of consignments by these benami concerns, the diamond is handed over to the real importer thereby creating a bogus stock in the books of the benami concerns. Against the bogus stock, bogus sales bills are issued to parties who purchase diamonds from the grey market and are of need for bogus purchase bills to regularize the purchase in the books. These parties make payment through cheque which is make payment to the party from whom import is made thereby squaring of this transaction. Against the cheque, the party wants the cash back. The real importer, who purchase the consignment out of books in cash, sells the same in cash in market thereby generating cash. The real importer has its accounts with Angaria. It instructs Angaria to make payment for the imported consignment in cash to the group concerns. The group concerns on receiving the cash from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd. was made after a period of 21 days. He held that it was hard to believe that a seller from Surat would give a credit of 21 days to an unknown buyer in Kolkata. He accordingly treated the purchases claimed to have made from M/s. Nazar Impex Pvt. Ltd. as bogus and added the said purchases amounting to Rs. 4,57,600/- to the total income of the assessee in the assessment completed u/s 147/143(3) vide an order dated 15.12.2016. 5. Against the order passed by the A.O. u/s 147/143(3), an appeal was preferred by the assessee before the Ld. CIT(A) and the submission made before the A.O. un support of its claim that the purchase made from M/s. Nazar Impex Pvt. Ltd. were genuine was reiterated on behalf of the assessee before the Ld. CIT(A). The Ld. CIT(A) however did not find merit in the same for the following reasons: a. There is the clear information and factual finding that certain information was received by the Ld. A.O. and this ws absolutely authentic based on statements recorded by the Investigation Wing during search and seizure operation of the Sanjay Choudhury Group, Mumbai. b. The appellant has not been able to counter in any manner the observations of the Ld. A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the assessee mainly reiterated before the Tribunal, the submissions made by the assessee before the authorities below in support of his issue under consideration. He contended that the purchases in question made by the assessee from M/s. Nazar Impex Pvt. Ltd. were disallowed by the authorities below by treating the same as bogus mainly for the delay in making the payment against the said purchases and there was no adverse material brought on record to show that the same were bogus. He contended that the claim of the assessee for the said purchases was duly supported by the relevant documentary evidence and even though the same was produced by the assessee before the authorities below, they completely overlooked the same. He submitted that a bill raised by the party for the said purchases was produced by the assessee to show the genuineness of his claim. He invited my attention to the copy of the said bill placed at page no 6 of the Paper Book to point out that 91.52 carats of cut and polished diamonds were purchased by the assessee under an authentic bill wherein all the relevant details including VAT and CST no of the supplier were given. He also invited my atte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i concerns of Sanjay Choudhury Group, Mumbai were indulging in providing accommodation entries in lieu of commission. The said information also contained the details of modus operandi of providing accommodation entries followed by the said benami concerns. Since M/s. Nazar Impex Pvt. Ltd. was one of such concerns belonging to Sanjay Choudhury Group and the assessee had claimed to have purchased diamonds of Rs. 4,57,600/- from the said concern, the assessment in the case of the assessee for the year under consideration was re-opened by the A.O. During the course of assessment proceedings, it was explained by the assessee in reply to the query raised by the A.O. that purchase of diamonds made from M/s. Nazar Impex Pvt. Ltd. vide bill No. In IPLS/PD/JUL/16/10-11 dated 14.07.2010 was genuine. It was also pointed out that the payment against the said bill was settled by account payee cheque and the quantity of diamond purchased was not only entered into the stock register, but even corresponding sale of the same was duly recorded. The relevant documentary evidence was also filed by the assessee before the A.O. to support and substantiate his explanation. As rightly contended by the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m foreign suppliers named in Box 'B' and that he admits of receiving the cheques / RTGS from assessee in Box 'E' and when the fact remains that Shri Rajendra Jain's concern M/s. Vitrag and M/s. Arihant utilised the cheques / RTGS given by the assessee (for the diamond purchased by him) and in turn is remitted in foreign exchange towards the bills raised by the foreign exporters (Box 'B'), in no way show that the assessee had made any purchase outside the books or from the grey market. We are unable to understand as to the role of the nine persons (whose names are appearing in Box 'D'). The modus operandi as suggested by Shri Rajendra Jain does not fit into the logic or rational reasoning of a common prudent person. However, the uncontroverted fact remains that Shri Rajendra Jain and his concerns are legally importing the diamonds directly from foreign concerns stated in Box 'B' on credit (we explained earlier), so it is not understood as to what is the role of persons named in Box 'D'. Shri Rajendra Jain's answer to question no 26 that he and his concerns placed the orders with the foreign concerns named in Box 'B' and collets the diamond in his office / show room. Let us pause for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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