TMI Blog2020 (9) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. There is nothing on record in respect of any comparable third party data and therefore, we deem it appropriate to set-aside the matter to the file of the AO for the limited purposes of identifying the comparable third party data and the comparison thereof with gross profit of 8.5% so declared by the assessee and then decide, the quantum of addition basis such variation, if any. The assessee is also directed to identify such comparable data and bring it to the notice of the Assessing officer for his examination and verification. - ITA No. 92/JP/2019 - - - Dated:- 11-9-2020 - SHRI VIJAY PAL RAO , JM And SHRI VIKRAM SINGH YADAV , AM Assessee by : None Revenue by : Ms Chanchal Meena ( JCIT ) ORDER PER : VIKRAM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly decided to hear the matter considering the written submissions and other material available on record. 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of manufacturing and trading of jewellery studded with diamond and other precious stones items. During the course of assessment proceedings, the Assessing Officer issued a showcause notice dated 13.01.2016 stating that purchases made by the assessee from M/s Surya Diam and M/s Maximus Gems are in the nature of bogus purchases being made from concerns which are related to M/s Bhanwar Lal Jain Group on whom the Investigation Wing of the Department has carried out search operations on 03.10.2013 and his statements were recorded wherein he has adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making the trading addition. It was submitted that complete details of the parties and transactions consisting of the firm s account, purchase bill copies and bank accounts vide which the payments of purchases were made were filed during the course of assessment proceedings. It was submitted that it is only the presumption of the AO as he has not brought any evidence on record which indicates that the money paid to both these parties against the purchases made was returned back in cash or by other mode to the assessee company. It was submitted that the Assessing Officer has not issued any notice u/s 133(6) and issued summons u/s 131 and thereby denying the opportunity of cross examination to the assessee. It was further submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of section 145(3) and held that these are unverified purchases and the profit has been inflated by the assessee and accordingly, she has reduced the loss claimed by the assessee and to that extent, the addition has been confirmed. It was accordingly submitted that the order so passed by the ld CIT(A) may accordingly be confirmed. 7. We have heard the rival contentions and perused the material available on record. We find that it is a case where the AO based on investigation carried out during the course of search in case of Bhanwar lal Jain Group has come to be conclusion that the assessee has taken accommodation entry of bogus purchases from two concerns to the extent of ₹ 1,34,77,995/- and the additions have been made to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loss claimed has been disallowed by the ld CIT(A) exercising its co-terminus powers with that of the Assessing officer. The Assessing officer while exercising his jurisdiction cannot act arbitrarily or capriciously. The assessment must proceed on judicial considerations in light of relevant material available on record. In other words, in any case of best judgment, though the element of guess work is involved, however the guess work should have nexus with the material on record and discretion must not be exercised arbitrarily or capriciously. For the purposes of making the best judgment assessment, past history of the assessee has been held as reliable and reasonable basis for estimation of profits. In the instant case, though the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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