Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2018 (4) TMI 690

the declared GP ratio will be granted by AO. In a nutshell, the AO is directed to restrict the disallowance of alleged purchase of ₹ 7,16,98,624/- by estimating the same at 3.7% (10% minus 6.30%) for the AY 2006-07. Facts being identical our decision for the AY 2006-07 applies mutatis mutandis to AY 2007-08. Accordingly, the AO would estimate the profit element embedded in the purchase of ₹ 22,11,65,706/- @ 3.37% (10% minus 6.63%) for A.Y.2007-08. We make it clear that we are not disturbing the additional income of ₹ 45,17,013/- offered by the assessee for A.Y. 2006-07 and ₹ 1,46,63,286/- for A.Y. 2007-08. - ITA No. 6651/Mum/2012 And ITA No. 6652/Mum/2012 - Dated:- 19-3-2018 - SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) For The Assessee : Mr. B.V. Jhaveri, AR For The Revenue : Mr. M.C. Omi Ningshen, DR ORDER PER N.K. PRADHAN, AM The captioned appeals filed by the assessee are directed against the order of the Commissioner of Income Tax (Appeals)-40 [in short CIT(A) ], Mumbai and arise out of the assessment completed u/s 143(3) r.w.s. 147 of the Income Tax Act 1961 (the Act ). As common issues are involved, we are proceeding .....

X X X X X X X

Full Text of the Document

X X X X X X X

henu Gems Pvt. Ltd. 4.1 Further it was found that the assessee in the instant case was one of the beneficiaries who had accepted such accommodation bill. Also, in respect of purchases made with the entities namely (i) M/s Simran Gems, (ii) M/s Krishna Diam, (iii) M/s Mihir Diamonds and (iv) M/s Kanak Impex, Shri Anil B. Vanani, partner of the assessee-firm submitted before the AO as under: Your honour, the department had asked the details in connection with the certain purchases made of rough diamonds and polished diamonds and the details of creditors for AYs. 2006-07, 2007-08 & 2009-10. It has been brought to your kind attention that certain purchases of rough diamonds and polished diamonds made during the above said assessment years from the following parties may not be considered genuine purchases by the Income Tax Department (i) M/s Simran Gems, (ii) M/s Krishna Diam, (iii) M/s Mihir Diamonds, (iv) M/s Kanak Impex Your honour, but we had not agreed on this view due to the following reasons- (a) The firm had made the purchases from the above parties by account payee cheques and vouchers support the purchases (b) The above transactions are fully accounted in stock register of .....

X X X X X X X

Full Text of the Document

X X X X X X X

l providers had candidly admitted that they had provided such accommodation entries. Therefore, he made an addition of not only the additional income of ₹ 45,17,013/- offered by the Shri Anil B. Vanani in his affidavit dated 07.02.2009, but also made an addition of ₹ 7,16,98,624/- being undisclosed investment in guise of bogus purchases. 5. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). Since the reopening of assessment was done by the AO on a statement dated 20.10.2008 given by Shri Gautam Jain, during the course of survey u/s 133A, the Ld. CIT(A) directed the AO to provide an opportunity to cross-examine Shri Jain. Such opportunity was provided to the assessee by the AO on 08.02.2012 and a statement on oath of Shri Gautam Jain was also recorded u/s 131. The AO also submitted a remand report incorporating the above to the Ld. CIT(A). The Ld. CIT(A) observed that the declaration of additional income was made by the assessee voluntarily to avoid any prosecution proceeding against the partners and also to buy piece. The assessee then sought to retract from the said declaration contending duress under undue pressure. The Ld. CIT(A) ob .....

X X X X X X X

Full Text of the Document

X X X X X X X

nd also in the stock statements maintained regularly by the assessee-firm which were produced before the AO in the course of the assessment proceedings for AYs. 2006-07 & 2007-08. It is also submitted that in the aforesaid affidavit Shri Anil B. Vanani, without prejudice to the aforesaid, in order to avoid protracted litigation agreed to offer additional gross profit of 6.30% in AY 2006-07 in respect of the purchases of diamonds effected from the aforesaid three concerns and accordingly offered additional profit/income of ₹ 45,17,013/- in the AY 2006-07. The Ld. counsel submits that the AO overlooked the fact that the said purchase of diamonds are already recorded in the stock register and export sales of the said diamonds were effected and recorded in the regular books of accounts and thus income arising therefrom is offered and taxed in the case of the assessee-firm. Our attention is drawn to the affidavit of Shri Gautam B. Jain dated 16.10.2008, wherein he had retracted his statement recorded on 20.12.2008. Therefore, it is stated that the statement of Shri Jain cannot be accepted without there being corroborative evidence in support thereof. The Ld. counsel submits th .....

X X X X X X X

Full Text of the Document

X X X X X X X

v) examination-in-chief and cross-examination dated 08.02.2012 of Shri Gautam Jain, (p. 193-194 of P/B), we are of the considered view that the affidavit dated 07.02.2009 filed by Shri Anil B. Vanani is the fulcrum and it would resolve the contentious issues in the instant case. It is stated therein that the assessee-firm is prepared to offer additional income of ₹ 45,17,013/- (at the GP percentage 6.30 on purchase of ₹ 7,16,98,624/-) for AY 2006-07 and ₹ 1,46,63,286/- (at the GP percentage 6.63 on purchases of ₹ 22,11,65,706/-) for AY 2007-08. The Hon ble Supreme Court in Chuharmal v. CIT (1988) 172 ITR 250 (SC) pointed out to the following guidelines in CIT v. Durga Prasad More (1971) 82 ITR 540 (SC), which reads as under: Science has not yet invented any instrument to test the reliability of the evidence placed before a Court or Tribunal. Therefore, the Courts and Tribunals have to judge the evidence before them by applying the test of human probabilities. Human minds may differ as to the reliability of a piece of evidence. But in that sphere the decision of the final fact finding authority is made conclusive by law. Based on the facts and circumstances o .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||