TMI Blog2021 (1) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee was engaged in obtaining accommodation entries of bogus purchases provided by Sh. Rakesh Gupta, Sh.Vishesh Gupta, Sh.Vaibhav Jain and Sh. Navneet Jain. The case of the assessee was re-opened by recording the following reasons and issue of notice dated 27.02.2015 u/s 148 of the Income Tax Act, 1961 (in short Act ):- A letter bearing F.No.Addl.CIT/(Hq)/(Coord.)/Accommodation entry/2012-13/15016 dated 26.03.2013 was received from the Office of the Chief Commissioner) of I.Tax, Delhi-I, New Delhi therein forwarding letter bearing F.No.CIT(C)-II/2012-13/3898 dated 19.03.2013 received from the Commissioner of I.Tax, Central-II, New Delhi with a CD containing the details of accommodation entries provided by Sh.Rakesh Gupta Sh. Vishesh Gupta and Sh. Navneet Jain Sh.Vaibhav Jain in the shape of bogus purchases and directing this office to take necessary action as per section 148 in respect of entries pertaining to A.Y. 2006-07, which were going to be barred by limitation on 31.03.2013. The information provided by the CIT, Central- II, New Delhi vide his letter dated 19.03.2013 reads as under:- Kindly find enclosed herewith letter dated 13.03.2013 of ACIT, Central Cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 147 of I.Tax Act and notices u/s 148 of I.Tax Act were issued. 3. During the course of assessment proceedings, the Assessing Officer confronted the assessee regarding the statement of Sh. Vishesh Gupta recorded by ACIT, Central Circle-10, Jhandewalan, New Delhi wherein it has been admitted by him that besides his 05 firms and his father namely Sh.Rakesh Gutpa s 5 firms and his brother Sh.Shashank Mittal, he was owning/managing/controlling M/s. Pasupati Enterprises, M/s. Om Agencies and M/s. Shree Bankey Bihari Trading Company. He had further stated that he was engaged in bogus purchase and issue of bogus purchase bills/accommodation entries on commission @ 0.25% to 0.50%. He had also explained the step-wise procedure for providing bogus bills/accommodation entries. This fact was again been confirmed/admitted by Sh.Rakesh Gupta, Sh.Vishesh Gupta. The Assessing Officer issued summons u/s 131 of the Act to Sh.Rakesh Gutpa Sh.Vishesh Gupta and their statements were recorded. After considering the reply of the assessee and the material available before him, the Assessing Officer concluded that purchase of ₹ 19,74,026/- made from M/s Bankey Bihari Trading Company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made by the Assessing Officer is not justified. 6. However, the Ld. CIT(A) was not satisfied with the arguments advanced by the assessee. She not only upheld the re-opening of the assessment but also enhanced the addition to ₹ 21,30,030/- as against ₹ 19,74,026/- made by the Assessing Officer. While holding so, she held that the assessee must have earned profit out of the transactions and since expenses have already been claimed by him in his P L A/c, therefore, profit on such transaction @ 20% of the purchases amounting to ₹ 3,94,805/- had to be added to the total income of the assessee. Further, in this kind of accommodation entries commission @ 0.5% is paid to the accommodation entry provider which in the instant case comes to ₹ 9,870/- She accordingly enhanced the income of the assessee to ₹ 4,04,675/- i.e. (₹ 3,94,805/- + ₹ 9,870/-). 7. Aggrieved by such order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising following grounds:- 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad, both in the eyes of law and on facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting that the inference drawn by the AO merely on the basis of a statement that these firms are not in actual business is baseless and contrary to the facts on record. 8. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee in ignoring the fact that the quantity purchased and sold being completely tallying, the allegation that the assessee has not made purchases cannot be sustained. 9. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in confirming the addition on account of bogus purchases, despite their being adequate material and evidences brought on record by the assessee before the AO to show that the purchases and sales were made in the regular course of business. 10. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law in rejecting the contention of the assessee that the addition so made on the basis of material collected at the back of the assessee, is bad in law and liable to be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Del/2017 dated 27.09.2018 * Jyoti Engineering Works, Sadhna Sharma, Ajay Sharma v. ITO in ITA No. 2719/Del/2018, ITA No. 2720/Del/2018, ITA No. 2721/Del/2018, ITA No. 2722/Del/2018 And ITA No. 2723/Del/2018 dated 26.09.2018 * Rajender Prasad Prop. M/s Priya Enterprises v. ITO in ITA No.7060/DEL/2017 dated 07.09.2018 * M/s Sapra Metal Co. v. ITO in ITA No. 2910/Del/2016 dated 09.3.2017. 9. He accordingly submitted that the addition made by the Assessing Officer and enhanced by the Ld. CIT(A) is liable to be deleted. 10. The Ld.DR on the other hand heavily relied on the orders of the Assessing Officer and Ld.CIT(A). 11. I have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld.CIT(A) and the Paper Book filed on behalf of the assessee. I have also considered the various decisions cited before me. I find Assessing Officer, in the instant case, has made addition of ₹ 19,74,026/- being bogus purchases made by the assessee from Shree Bankey Bihari Trading Company and M/s Vishu Trading Company. I find the Ld.CIT(A) upheld the initiation of re-assessment proceedings and also upheld the addition made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aibhav Jain has provided accommodation entry through thirty seven paper entities. The list of the firms giving accommodation entry is enclosed as annexure-B. The list of accommodation entry recipients, has been obtained from Sh. Naveneet Jain Sh. Vaibhav Jain. It does not give year wise bifurcation. Hard copy of the list is enclosed as annexure-C, duly signed by Sh. Vaibhav Jain. Thus, the firms mention in the list B have provided accommodation entries to the firms mentioned in list C . 5. The soft copy of the information in respect to annexure A, B C is also enclosed. 6. The information of accommodation entry includes A.Y. 2006-07 also, which is a time baring year for taking action u/s 148. 7. This information is forwarded to you for early dissemination to various field offices in Delhi. On examining the list of accommodation entries provided by Shri Rakesh Gupta Shri Vishesh Gupta and Shri Navneet Jain Shri Vaibhav Jain pertaining to A.Y. 2006-07. It is noticed that the following accommodation entries have been taken by the assessee namely M/s Krishan Lal Gambhir Sons: S. No. Accommodation entry provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the party from which the assessee therein had made purchases were also same, as in the case of the present assessee. Therefore, respectfully following the decisions of this Tribunal in the case of Unique Metal (supra) and Shree Radheshyam and Company (supra), we quashed the reassessment proceedings. 10. Now coming to the sustenance of the addition by the ld. CIT(A) to an extent of 20% of the purchases made by the assessee, we note that the Tribunal, vide its order dated 30/11/2015 in the case of Shree Radheshyam Company (supra) have deleted similar addition. 11. The Tribunal in the case of Shree Radheshyam Company (supra), has followed the findings given in the order dated 28/11/2015 in the case of Unique Metal Industries (supra). This Tribunal has observed as under: 7. Now coming to the merit about the sustenance of the addition by the CIT(A) @ 20% of the purchases made by the assessee from Shri Bankey Bihari Trading Co., after hearing the rival submissions and going through the order of the Tribunal, I noted that this Tribunal vide its order dated 28.10.2015 in the case of Unique Metal Industries (supra), deleted similar addition by observing in para 27 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
