TMI Blog2018 (5) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... I.T.A. No.1696/Mum/2017 - - - Dated:- 25-4-2018 - SHRI C.N PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Ms. Mrugakshi K. Joshi For The Revenue : Shri Rajat Mittal (DR) ORDER PER RAMIT KOCHAR, Accountant Member This appeal, filed by the assessee, being ITA No. 1696/Mum/2017, is directed against appellate order dated 27.01.2017 passed by learned Commissioner of Income Tax (Appeals)-44, Mumbai (hereinafter called the CIT(A) ), for assessment year 2007-08, the appellate proceedings had arisen before learned CIT(A) from the assessment order dated 23.03.2015 passed by learned Assessing Officer (hereinafter called the AO ) u/s 143(3) r.w.s 147 of the Income-tax Act, 1961 (hereinafter called the Act ) for AY 2007-08. 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called the tribunal ) read as under:- Ground No. 1 : Passing exparte order 1. The learned CIT(A) erred in passing an order without providing the appellant sufficient opportunity of being heard. Ground No. 2 : Re-opening assessment u/s. 147/148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DGIT, Mumbai wherein a confession was apparently made that it indulged only in issuing bogus purchase entries to parties that approached them. The said Affidavit formed the basis of the entire addition and the same should have been provided to the Appellant. 5. The learned CIT(A) failed to consider the fact that the learned AO did not give the Appellant an opportunity for cross- examining the above mentioned 2 vendors from whom alleged bogus purchases were said to be made. 6. The learned CIT(A) failed to consider that the goods purchased from M/s Sun Diam and M/s Moulimani Impex Pvt. Ltd. were exported to the foreign buyers who could be identified from the appellant's stock register. 7. Without prejudice, the learned CIT(A) erred in not restricting the disallowance to the gross profit of the alleged bogus purchases instead of disallowing the entire Purchase amount The Appellant craves leave to add, alter or amend the Grounds of Appeal at the time of or before the hearing of the appeal. 3. The brief facts of the case are that the assessee is a firm engaged in the business of export and import of diamonds and precious and semi precious stones . A Sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to me before recording the statement. Further I declare that I have read , understood its contents and that the same has been recorded correctly. Sd/-06-10-13 sd/-06-10-13 (R.K. Kedia) (Rajendra Sohanlal Jain) DDIT(Inv.)- Unit- II(4), Mumbai (DEPONENT) I, Surendra S Jain, S/o. Sobhagmal Jain, aged about 43 years, residing at 303, Laxmi Sadan, Paranjpe Scheme A, Road No. 2, Subash Road, Vile Parle(E), Mumbai- 400 057 in the capacity of business partner of Shri Rajendra Sohanlal Jain confirm that I have read over the above statement, further confirm that whatever stated above is correct and true and I shall abide with like same. Sd/-06-10-13 sd/- 06-10-13 (R.K. Kedia) (SURENDRA KUMAR JAIN) DDIT(Inv.)- Unit-II (4), Mumbai Q13. Please furnish details of all the business concerns which are directly or indirectly controlled by you alongwith shri. Surendra Jain. Ans. Sir, we are operating through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hawala transactions as under: 7.3 In view of the above, it is evidently clear from the chart that Shri Rajendra Jain with Shri Surendra Jain had directly or indirectly controlled various business concerns of all the three nature i.e. Proprietorship firm, Partnership firm and Companies in the name of various persons including their employees and such firm includes Moulimani Impex Pvt. Ltd. (Directors Sh. Rajendra Jain Sh. Sachin Pareek) and Sun Diam (Partners Sh. Rajendra Jain Sh. Manish Jain). 7.4 After taking into account all the details submitted, it is necessary and expedient to narrate about the modus operandi involved in such unscrupulous transactions, as it will help in arriving at the judicious conclusion: The person who wants to inflate his expenses to reduce the total income and there by tax liability, approaches the hawala giver. The hawala giver provides him a purchase invoice, accepts the cheque for which the bill is prepared. The cheque so obtained from the so called buyer is deposited in the account of the hawala giver then the hawala giver passes on this amount to three to four layers and ultimately cash is withdrawn from first account which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the appellant. It is also seen from the assessment order that the AR of the assessee had attended before the AO and had filed details/explanations called for. In view of the above, the grounds of appeal no. 1 is dismissed. 6. Decision on grounds of appeal no. 2: 6.1 This ground relates to disallowance of ₹ 1,57,77,971/- u/s 69C of the Act, The relevant facts are like this. The appellant is a firm engaged in the business of import and export of diamonds and semiprecious stones. The AO has received information from the Investigation Wing, Mumbai that the appellant had obtained accommodation entries of ₹ 1,57,77,971/- through certain group concerns of Rajendra Jain Group of cases. After discussing the modus operandi of the group the AO came to a conclusion that the appellant had shown bogus purchase transaction to the extent of ₹ 1,57,77,971/-. The AO accordingly made addition of ₹ 1,57,77,971/- to the total income of the appellant u/s 69.C.of the Act. 6.2 During the course of appeal proceedings no one appeared nor was any written submission made. In absence of any written submission and/or document to substantiate the argument of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... / bogus purchases as stated by Shri. Rajendra Jain in his statement recorded on oath recorded before DDIT(Inv) Mumbai. Thus, he prayed for sustaining the additions or in alternative prayed that the matter be restored to the file of the learned CIT(A) for fresh determination of the issue on merits. 6. We have considered rival contentions and perused the material on record. We have explained the facts in extenso in the preceding para s. . The assessee did not appear before learned CIT-A and claim is made before us by learned counsel for the assessee that there was a change in address which could not be notified to learned CIT-A inadvertently which led to dismissal of appeal ex-parte by learned CIT(A). Since there was no representation of the assessee before the learned CIT-A as there were a change in address of the assessee from M/s Purna Purshottam Export, 304, Veena Niketan, Vayuduta Complex, Opp, Blue White MTNL Bldg., Devidas Lane, Borivali (W), Mumbai-400 092 to M/s. Purnapurshottam Exports, Gala no. 6A, Ground floor, Hi-tex Industrial Compound, Behind Petrol Pump, S.V. Road, Dahisar (E), Mumbai-400068 which could not be notified to the learned CIT(A) inadverantly as claime ..... X X X X Extracts X X X X X X X X Extracts X X X X
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