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TMI Blog2018 (5) TMI 1695X X X X Extracts X X X X X X X X Extracts X X X X ..... sing diamond in cash from Grey Market were taking bogus bills to regularise their purchases in the books and such bills were provided by the various concerns including M/s. Vitrag Jewels. The names of various concerns which had taken such bogus bills were also provided by Shri Rajendra Jain. Since the assessee firm was one of such concerns who had taken bill of Rs. 12,39,532/- from M/s. Vitrag Jewels on 20.02.2017, the assessment was reopened by the A.O. and a notice under section 148 was issued by him on 29.03.2014 after recording the reasons. In reply, a letter dated 28.04.2014 was filed by the assessee requesting the A.O. to treat the return originally filed by it on 31.03.2007 as the return filed in response to notice under section 148. During the course of reassessment proceedings, reasons recorded by him for reopening the assessment were furnished by the A.O. to the assessee and vide letter dated 26.09.2014, the assessee raised its objections challenging the validity of reopening. The A.O. did not find merit in the said objections and rejected the same vide a separate order passed on 29.09.2014. During the course of reassessment proceedings, documentary evidence was filed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase has been made. Keeping in view of the aforesaid fact and decision of Hon'ble Supreme Court in case of N.K. Protiens Ltd. (SLP) 269 of 2017, wherein entire bogus purchase was treated as income of the appellant. The action taken by the A.O. is hereby upheld and the grounds of appeal are dismissed." Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal. 4. In ground no 1 and 2, the assessee has raised the preliminary issue challenging the validity of the assessment made by the A.O. under section 143(3)/147 on the ground that the reopening of assessment itself was invalid while in ground no 3 and 4, the assessee has challenged the addition of Rs. 12,39,532/- made by the A.O. and confirmed by the Ld. CIT(A) on account of the alleged bogus purchase of diamonds. 5. I have heard the arguments of both the sides and also perused the relevant material available on record. As agreed by the learned representatives of both the sides, the issue involved in ground no 3 and 4 of the assessee's appeal relating to addition made on account of the alleged bogus purchase of diamonds is squarely covered in favour of the assessee inter alia by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajendra Jain. We also find that Shri Rajendra Jain had subsequently retracted his statement by way of an affidavit deposing before the Notary Public on 9.1.2014 (enclosed in pages 96 to 100 of paper book). He had also explained the circumstances under which the original statements had been recorded and effectively stated that the same was recorded under coercion and the statement recorded therein were as per the desire and will of the DDIT (lnv) who recorded the statement. Shri Rajendra Jain had also initially filed an affidavit on 21.10.2013 (enclosed in pages 91 to 95 of paper book) retracting the statement recorded by DDIT (lnv) . He also filed a letter to DCIT, Central Circle -4, Surat on 31.10.2014 explaining the entire facts of the case and the circumstances warranting him to file two affidavits (i.e on 21.10.2013 and 9.1.2014 reiterating the same) [enclosed in pages 88 to 90 of paper book]. Hence the version of the revenue that the assessee had received cash back in lieu of cheques issued to suppliers of diamonds, stands negated pursuant to the retraction of statement of Shri Rajendra Jain which is the only source of evidence available with the revenue and which has been hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders are also placed over phone and goods are sent through trusted and regular couriers. As a normal business practice, goods are regularly received in the above stated manner. However, at the moment it is not possible to exactly recollect how the above consignments were received because of long time gap' 7.2 We find that the assessee had furnished the summary of diamonds movement for the period 1.4.2005 to 31.03.2007 indicating the quantity and value in opening balance, purchases, sales and closing balance (enclosed in page 53 of paper book). We find that the assessee had also filed the purchase bills of M/s. Vitrag Jewels (enclosed in pages 68 to 72 of the paper book) together with the ledger account of M/s. Vitrag Jewels as appearing in the books of the assessee firm for the period 1.4.2006 to 31.03.2007 and for the period 1.04.2007 to 31.03.2008 wherein the payments were made to M/s. Vitrag Jewels by account payee cheques. Admittedly the payments were made to M/s. Vitrag Jewels through account payee cheques on 22.02.2008 (Rs. 10,00,000/-) and on 27.03.2008 (Rs. 5,57,470/-). Hence the primary allegation of the Ld. AO that the assessee had received the csh back in lieu of ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, we allow the appeal of the assessee'' Heard Mr. Das, learned advocate appearing for the appellant revenue and Mr. J.P, Khaitan, learned senior advocate appearing for the respondent assessee. Before us the revenue could not demonstrate either the money was not paid or the money was paid and routed back to the assessee. In the circumstances interference with the order of the Tribunal is not warranted. No. question arise for adjudication. The application and the appeal are dismissed 7.4. We also find that similar issue had been addressed by this tribunal in respect of purchases made from M/s Vitrag Jewels in connection with the statement of Shri Rajendra Jain in the case of Manoj Begani vs ACIT in ITA No. 932/Kol/2017 for Asst Year 2008-09 ; ITA Nos. 933 to 935/Kol/2017 for Asst Years 2010-11 to 2012-13 and ITA No. 936/Kol/2017 for Asst. Year 2014-15 vide consolidated order dated 15.12.2017, wherein this tribunal had elaborately discussed the modus operandi of all the transactions from various angles and decided the issue in favour of the assessee. The findings given thereunder are not reiterated herein for the sake of brevity. 7.5 In view of the aforesaid finding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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