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TMI Blog2020 (4) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... seizure operation in the group cases carried out in Surat based non-genuine diamond concerns on 03.10.2013 and that the group of cases covered are referred to as "Gautam Jain & Others" who were believed to be concerns actively involved in providing non-genuine purchase bills and also unsecured loan accommodation 'entries' to various interested parties. It was further informed that as a result of the search & seizure action, it was conclusively proved that these Diamond concerns are only paper based companies with no real business activities as the Directors/Proprietors of all these concerns admitted on oath that they are nothing but paper companies with no genuine business. It was also informed that on perusal of the compilations of the letters of beneficiaries, the DGIT (Inv.) Mumbai found the name of the concerns in the list of beneficiaries of the accommodation entries and forwarded the same for necessary action to the AO. 3. In view of this information from DGIT (Inv.), Mumbai, the AO verified the information provided to him and found that the assessee firm i.e. H.S. Varma Gems & Jewells had a transaction of Rs. 14,06,860/- with bogus diamond concern "M/s Krishna Diam" in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08 was only accepted by issuance of intimation u/s 143(1) and therefore, it cannot be held that there has been any assessment of income and therefore, within 4 years thereafter, the receipt of information that the assessee is one of the beneficiaries of accommodation entries is a valid reason for reopening of the assessment by issuance of notice u/s 148 of the Act. He also observed that the AO has recorded the reasons for reopening before issuance of a notice u/s 148. Therefore, he upheld the validity of the reopening. 6. As regards the addition made on account of bogus purchases, the CIT (A) held that the assessee has not been able to prove with any evidence that the assessee's representative had travelled to Surat to take delivery of the goods or that the assessee had physical stock with it which has subsequently been sold. As regards payment through banking channels also, the CIT (A) held that it is of little value since in the accommodation entries, the payment was also made through banking channels. 7. As regards the assessee's request for an opportunity to cross examine of Mr. Gautam Jain and others, the CIT (A) held that the burden of proof lies on the person who made the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the assessee has purchased the diamonds from M/s. Krishna Diam as is evident from copies of the invoice bills as well as sale bills and also proved that these diamonds have subsequently been sold to another party and the payment has been received by way of cheques. Therefore, according to him, the assessee has proved the transactions and when the assessee has asked for an opportunity to cross examine the party who has allegedly given a statement that he was giving only an accommodation entries, he ought to have been provided with the same and since no such opportunity was provided, the assessment is bad in law. Similar arguments have been made for the A.Y 2009-10 as well wherein the parties who has been allegedly sold diamonds to the assessee were M/s. Sun Diam and Kriya Impex Pvt. Ltd. In the case for the A.Y 2009-10, the assessee had also submitted the affidavit of Shri Rajendra Jain, Proprietor of M/s. Kriya Impex Pvt Ltd and Sun Diam refuting the evidence of the search and seizure party and also retracting the statement given during the course of search and seizure. 9. The learned DR, on the other hand, supported the orders of the authorities below and submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has placed reliance upon the unreported decision of the Hon'ble Supreme Court in the case of CIT vs. M/s. Odeon Builders Pvt. Ltd. I find that the said case is distinguishable from the facts to the case before the Tribunal. In the above case, the issue was of bogus purchase of raw material for construction business of the assessee and the assessee therein had proved that relevant material has been purchased and also transported to the assessee. It was on the basis of the factual information filed which had been verified by the CIT (A) and had allowed the assessee's appeal and the Hon'ble Supreme Court has also confirmed the same. In the case before us, except for submitting the invoices, the assessee has not been able to prove with any other evidence (such as transportation charges), the receipt of diamonds. However, one thing that is common in both the cases is that though the assessee has asked for an opportunity to cross examine the suppliers, the assessee was not provided with such an opportunity. The CIT (A) has observed that the relevant party has not been examined by the AO and therefore, there is no question of providing an opportunity to cross examine. This findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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