TMI Blog2019 (4) TMI 1105X X X X Extracts X X X X X X X X Extracts X X X X ..... rary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, there are no reasons for us to interfere into or deviate from the findings so recorded by the Ld.CIT(A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned - Decided against assessee - I.T.A. No. 2649/Mum/2017 - - - Dated:- 11-2-2019 - Hon ble Sh. Shamim Yahya, AM And Hon ble Sh. Sandeep Gosain, JM For the Appellant : None For the Respondent : Shri Chaitanya Anjariya, DR ORDER PER SANDEEP GOSAIN, JUDICIAL MEMBER: The present Appeal filed by the assessee is against the order of Ld. CIT (Appeal) 10, Mumbai dated 20.01.17 for AY 2012-13 on the grounds mentioned herein below:- 1. The LD CIT (A) -10, Mumbai has erred in treating the genuine purchases of Rs. ₹ 4,94,35,647/- as an accommodation entries inspite of proper justification, documentary evidences and explanations submitted by the appellant. 2. The LD CIT (A) -10, Mumbai has erred in reducing the addition made by the LD AO @ 9% i.e. ₹ 44,49,209/- to @ 3% i.e. ₹ 14,83,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entries inspite of proper justification, documentary evidences and explanations submitted by the assessee, therefore we thought it fit to dispose of the same by this common order. 5. We have heard Ld. DR and we have also perused the material placed on record as well as the orders passed by revenue authorities. Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above ground raised by the assessee in para no. 4.2 to 4.2.4 of its order and the same is reproduced below:- 4.2 I have carefully considered the facts of the case and submissions of the Id.AR. I have also gone through the decisions relied on by the Id.AR. As seen from the facts of the case the AO was in receipt of information from the DGIT(lnv.), Mumbai on the basis of search and seizure action conducted by the investigation wing of Mumbai office u/s 132 during the course of which Bhanwarla! Jain and his appointed directors/partners have given categorical statements clearly stating the modus operand! followed by them in providing the accommodation bills for purchase of diamonds to various buyer concerns including the appellant compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer having found that some of alleged suppliers of steel to assessee had not supplied steel to assessee but had only provided sale bills, he/d that purchases made from said parties were bogus - He, accordingly, added entire amount of purchases to gross profit of assessee - Commissioner (Appeals) having found that assessee had indeed made purchases, though not from named parties but other parties from grey market, sustained addition to extent of 30 per cent of purchase cost as probable profit of assessee - Tribunal however, sustained addition to extent of 12.5 per cent - Whether since purchases were not bogus but were made from parties other than those mentioned in books of account, only profit element embedded in such purchases, could be_ added to assessee's income - Held, yes - Whether hence, order of Tribunal needed no interference - Held, yes [Paras 6,7 9J {In favour of assessee] . (emphasis supplied). 4.2.1. In the instant case, when independent enquiry was conducted by the AO by issue of notices u/s 133(6) only one party has responded but the other not. The appellant also has expressed its inability to produce the party before the AO. The AO has liberally quoted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es before the AO for giving evidence and not the other way round. Assessee's argument that the AO should allow them to cross-examine the parties would amount to putting the cart before the horse instead of putting the horse before the cart. 4.2.3. Even though the AO could not prove substantively that the amounts given to the sellers in cheque form have come back to the appellant in cash form, the activities of accommodation entries in the trading community is not unheard of. Further, the disturbing facts revealed by Bhanwarlai Jain group during the course of search and seizure proceedings conducted by the investigation wing of the income tax department itself, cannot be lost sight of. Furthermore, one should not be carried away by the myth that any amount rooting through bank channels would definitely establish the genuineness of the transaction as held by the Honorable Bombay High Court in the case of Naresh K Pahuja (2015) 54 taxmann.com 258. It was held in this case that mere rooting of a gift through a banking channel would not by itself establish that gift was genuine . Similar views were also expressed by ITAT Jaipur in the case of Kachwala Gems, in ITA No. 134 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ays inevitable as we cannot encourage such malpractice of obtaining accommodation entries to avoid the impact of levies and defrauding revenue. We can find such a restraint advised by the Hon'ble Gujarat High Court in the case of Simit P Seth (supra) without which avoiding payment of levies and defrauding revenue would have continued unabated. However, in the present case the decision of Simit P Seth is not applicable in a cast-iron straight-jacket way except the theory of restraint laid down by them since the nature of business in the case before them was different from the present case. Keeping in view the above instruction of the Board on the one hand and the saving gained by the assessee by involving in accommodation entries to the extent of levies on the other, I find it appropriate to take 3% of the reported bogus purchases for adding u/s 69C over and above the regular profits disclosed by the appellant instead of adding 9% as was done by the AO. The ground is partly allowed. 6. After having gone through the orders passed by revenue authorities and considering the facts as discussed above, we find that Ld. CIT(A) after considering the facts of the case had grante ..... X X X X Extracts X X X X X X X X Extracts X X X X
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