TMI Blog2021 (8) TMI 962X X X X Extracts X X X X X X X X Extracts X X X X ..... e sanctity of the statement cannot be the sole basis for making an addition. The transaction in the present Assessment Year i.e. Assessment Year 2008- 09 is genuine, identity and the credibility has also been established by the assessee. Therefore, Section 68 will not attract and the additions made by the Assessing Officer which was confirmed by the CIT(A) is not just and proper. - Decided in favour of assessee. - I.T.A. No. 3145/DEL/2018 I.T.A. No. 3146/DEL/2018 I.T.A. No. 3147/DEL/2018 - - - Dated:- 23-8-2021 - MS SUCHITRA KAMBLE, JUDICIAL MEMBER AND SH. PRASHANT MAHARISHI, ACCOUNTANT MEMBER Appellant by Sh. Pradeep Jindal, CA Respondent by Sh. Gaurav Pundir, Sr. DR ORDER PER SUCHITRA KAMBLE, JM These three appeals are filed by the assessee against the order dated 27/03/2018 passed by CIT(A)-16, New Delhi for assessment year 2008-09, 2009-10 2010-11 respectively. 2. The grounds of appeal are as under:- I.T.A. No. 3145/DEL/2018 (A.Y 2008-09) That on facts and in law, the Hon ble Commissioner of Income Tax (Appeals) - 16 erred in upholding the addition made by the AO without fully appreciating the facts and contention of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal) further enhanced the addition by ₹ 4,40,679/- arbitrarily without affording any opportunity of being heard and to explain. Hence, the addition of ₹ 7,75,843/- on account of purchases made from undisclosed sources is bad in law and liable to be deleted. 5. The Hon ble CIT (Appeal) has erred in confirming and enhancing the addition of ₹ 7,75,843/- as bogus purchases in trading account without rejecting the books u/s 145, and without the authority of any specific section of Income Tax Act, which is illegal and not valid in law. I.T.A. No. 3146/DEL/2018 (A.Y 2009-10) That on facts and in law, the Hon ble Commissioner of Income Tax (Appeals) - 16 erred in upholding the addition made by the AO without fully appreciating the facts and contention of the appellant and therefore, the Order of the Ld. Commissioner of Income Tax (Appeals) is bad in law. 1.1 That the learned CIT (A), has erred in affirming the jurisdiction of the AO under section 147, and ignoring that there was neither any satisfaction of the AO nor quantification of escaped assessment at the time of recording of reasons as there was no cogent or definite material on record in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases in trading account without rejecting the books u/s 145, and without the authority of any specific section of Income Tax Act, which is illegal and not valid in law. I.T.A. No. 3147/DEL/2018 (A.Y 2010-11) That on facts and in law, the Hon ble Commissioner of Income Tax (Appeals) - 16 erred in upholding the addition made by the AO without fully appreciating the facts and contention of the appellant and therefore, the Order of the Ld. Commissioner of Income Tax (Appeals) is bad in law. 1.1 That the learned CIT (A), has erred in affirming the jurisdiction of the AO under section 147, and ignoring that there was neither any satisfaction of the AO nor quantification of escaped assessment at the time of recording of reasons as there was no cogent or definite material on record in support of his reasons to believe that certain income has escaped assessment. 1.2 That CIT (A) has failed to appreciate that the AO has solely relied on the vague and scanty report of the Investigation Wing for assuming jurisdiction under section 147 without making any independent enquiry and judicious application of mind The reasons recorded were wrong; without application of min ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which deals in Gold and Diamond Jewellery. The return declaring an income of ₹ 2,11,460/- was filed on 24/09/2008 by the assessee. During the relevant Financial Year, the assessee derived income from business and other sources. During the course of search operation carried out on 3/10/2013 by Investigating Wing, Mumbai, various evidences were collected and statements of various person were recorded including Shri Rajendra Jain, Surendra Jain, and Shri Mudit P. Karnawar who have admitted that all the concern controlled and managed by them are not doing in really trading but indulge in paper transaction in respect of accommodation entry. The Assessing Officer observed that the assessee was one of the entry provider of accommodation entry and provided entries in the nature of bogus transaction in the form of sales/purchases and unsecured loans. The Assessing Officer observed that the assessee had made purchases amounting to ₹ 31,53,093/- from M/s AVI Exports a concern control by Shri Rajendra S. Jain. After taking cognizance of the statements and the evidences the Assessing Officer made addition of ₹ 3,35,164/- thereby holding that the assessee has already offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f purchases made from undisclosed sources only on the basis of statements of proprietors of the firm recorded during the course of search and seizure operation without affording the assessee an opportunity to cross examine the deponents even though specific request has been made by the assessee during the course of assessment proceedings, which is gross violation of the principle of natural justice. The CIT (A) further enhanced the addition by ₹ 4,40,679/- arbitrarily without affording any opportunity of being heard and to explain. Hence, the addition of ₹ 7,75,843/- on account of purchases made from undisclosed sources is bad in law and liable to be deleted. The Ld. AR submitted that the CIT(A) erred in confirming and enhancing the addition of ₹ 7,75,843/- as bogus purchases in trading account without rejecting the books u/s 145, and without the authority of any specific section of Income Tax Act, which is illegal and not valid in law. The Ld. AR further submitted that in assessee s own case for Assessment Year 2007-08 being ITA No. 2266/Del/2017 order dated 6/4/2018, the similar addition was deleted. 6. The Ld. DR submitted that the mere retraction of the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived against the sales through banking channels and the payments for the purchases were also made through banking channels. In my opinion, when the AO had accepted the sales of the same items purchased by the assessee than there was no occasion to doubt the purchases. Moreover, the AO only doubted 90% of the purchases and made the addition to that extent. I am of the view that if the purchases were not genuine, the addition ought to have been made of the whole amount and not only of 90% and when the sales of the same items were accepted as genuine than the addition could not have been made for the purchases. I, therefore, considering the totality of the facts, delete the addition made by the A.O and sustained by the Ld.CIT(A) Since, the issue has been decided on merit in favour of the assessee, therefore, no findings are given on the legal issue which was also not argued by both the parties. The transaction in the present Assessment Year i.e. Assessment Year 2008- 09 is genuine, identity and the credibility has also been established by the assessee. Therefore, Section 68 will not attract and the additions made by the Assessing Officer which was confirmed by the CIT(A) is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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