TMI Blog2018 (4) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... amond in question from M/s. Nazar Impex Pvt. Ltd. which was duly supported by the relevant documentary evidence. - Decided in favour of assessee. - I.T.A. No. 2302/Kol/2017 - - - Dated:- 11-4-2018 - Shri P. M. Jagtap, AM For The Assessee : Shri Miraj D Shah, AR For The Revenue : Shri P.K. Mandal, Addl. CIT ORDER This appeal filed by the assessee is directed against the order of Ld. CIT(A) - 10, Kolkata dated 30.08.2017 and the solitary issue involved therein relates to the addition of ₹ 4,57,600/- made by the A.O. and confirmed by the Ld. CIT(A) on account of alleged bogus purchases of diamonds. 2. The assessee in the present case is an individual who is engaged in the business of manufacturing and trading of ornaments and jewellery. The return of income for the year under consideration was filed by him declaring a total income of ₹ 7,59,290/-. A search and seizure action was conducted by the department in the cases belonging to Sanjay Choudhury Group, Mumbai. As revealed during the course of the said action, the said group was indulging in providing accommodation entries in the nature of bogus sales in lieu of commission in the name of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d back by the assessee from M/s. Nazar Impex Pvt. Ltd. in lieu of the purchase invoice no NIPLS/PD/JUL/16/10-11 dated 24.07.2010 from ₹ 4,57,600/- from any person. The entire quantity of 91.52 carats of diamonds were entered into stock register in July, 2010 and from time to time the stock of diamonds have been sold. Both entries for inward movement and outward movement are reflected in the stock register. The implication of this accounting as well as stock entries suggest that the entire quantity of 91.52 carats of diamonds have been recorded properly which are sold during the financial year 2010-11 or subsequently. The movement of diamonds is controlled and therefore there is no question of there being bogus purchase of diamonds from Nazar Impex Pvt. Ltd. Further the books of accounts and other records like invoices, statements, vouchers etc. are maintained in the proper manner and there are audited as per the provisions of I.T. Act, 1961 and the auditors have not made by adverse remards against the maintenance and appropriateness of the accounts. 4. The explanation offered by the assessee was not found acceptable by the A.O. According to him, the payment against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s absence. d. There is not much merit in the argument of the Ld. AR that payments were made by account payee cheques, as these indicate documents for transfer of money, and remain mere documents without the corresponding documents relating to transfer of goods. In my considered view of the matter, the evidentiary value of payments by bank therefore is enormously diminished for the case at hand. e. I also find that there is no merit in the claim of the appellant that the Ld. A.O. did not conduct any independent enquiry from his side. It is to be observed that at any rate the onus was cast upon the appellant to clearly bring on record that the purchases were made from the alleged parties, especially as the transactions were suspicious in nature. For the case at hand, the appellant has failed to discharge such basic onus of proof of delivery. For the reasons given above and keeping in view the ratio of the various case laws discussed in his impugned order, the Ld. CIT(A) confirmed the addition of ₹ 4,57,600/- made by the A.O. by treating the purchase of diamonds claimed to be made by the assessee by M/s. Nazar Impex Pvt. Ltd. as bogus. Aggrieved by the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 15.12.2017), he contended that the similar claim of the assessee for purchases based on similar documentary evidence was allowed by the Tribunal. 7. The learned DR, on the other hand, contended that specific information was received by the A.O. from the Investigation Wing about M/s. Nazar Impex Pvt. Ltd. indulging in giving accommodation entries. He contended that the said information was sufficient to show that the genuineness of the purchases in question claimed to be made by the assessee from M/s. Nazar Impex Pvt. Ltd. was doubtful and the unusual delay in payment by the assessee against the said purchases further established that it was a case of bogus purchases. He contended that the assessee also failed to establish the mode of delivery of the diamonds claimed to be purchased from Surat party. He contended that all these circumstances were sufficient to show that the purchase of diamonds claimed to be made by the assessee from M/s. Nazar Impex Pvt. Ltd. was bogus and the authorities below were fully justified in disallowing the same. 8. I have considered the rival submissions and also perused the relevant material available on record. It is observed that the infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entary evidence and insisted the assessee to produce the Principal Officer of M/s. Vitrag and since the assessee failed to produce them, he made the disallowance of the entire diamond purchased by the assessee through cheques / RTGS. The assessee has produced the VAT return and VAT audit report also, which is placed at pages 73 to 86 of the paper book. The assessee has also produced the sales bill related to diamonds sold out by the assessee which was made out of the very same purchases disallowed by the A.O. which is found place from pages 56 to 59 of the paper book. We note that the A.O. has not disturbed the sales shown by the assessee in respect of the diamond purchased from M/s. Vitrag and M/s. Arihant and M/s. Kangan (AY 2010-11 to 2012-13). When the sales of the very same diamonds have been accepted by ASSESSING OFFICER/CIT(A) without a murmur, the purchases could not have been disallowed without cogent material. In this case, for whatever reason best known for him, Shri Rajendra Jain who controls M/s. Vitrag and M/s. Arihant have made the statements wherein he explain in detail the modus of the whole operation, which defies logic and can be termed absurd on the fact of it, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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