9911796707
TMI Blog2022 (3) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant while relying on a third party statement as the same was also in violation of principles of natural justice. (3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in estimating the profit @ of 5% of the purchases of Rs. 3,32,03,131/- as alleged bogus purchase by treating genuine purchases as non-genuine. (4) The appellant craves leave to add, alter or delete all or modifyany or all the above grounds of appeal." 2. Brief facts of the assessee that the assessee is a proprietor of Parvati Exports and engaged in the business of diamond. The assessee filed his return of income for the A.Y. 2009-10 on 26.09.2007 declaring total income of Rs. 1,71,850/-. Scrutiny assessment was competed under section 143(3) on 28.12.2010 determining the total income of Rs. 2,31,000/-. Thereafter, the case of assessee was reopened under section 147 of the Act. Notice under section 148 of the Act was issued on 29.03.2016 served on 30.03.2016. The case was reopened on the basis of information received from DGIT (Investigation) Mumbai. In the information received from Investigation Wing, Mumbai it was informed that a search and seizure action was carried out by I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes of the assessee. The Assessing officer recorded that reply furnished by assessee was considered, however the same was not accepted. The Assessing Officer on the basis of certain case laws and by referring the modus operandi of transaction carried out by entry provider made addition of 25% of such purchases shown from Rose Gems Pvt. Ltd. The Assessing Officer worked out the disallowance of Rs. 83,00,782/-. 4. Aggrieved the additions the assessee filed an appeal before ld. CIT(A) challenged the validity of reopening as well as addition on merit to the extent of 25% of purchases. The assessee filed detailed written submission this tribunal, the ld. CIT(A) against the validity of reopening as well as on addition. The ld. CIT(A) after consideration the submissions of assessee uphold the validity of reopening by following decisions in case of Pushpak Bullion (P) Ltd. (2017) 85 taxmann.com 84 (Gujarat), however on merit, ld. CIT(A) restricted the addition to the extent of 5% of the bogus purchases the filed present before us. 5. We have heard the submissions of both the parties and have gone through the orders of lower authorities. At the outset of hearing, the ld. AR of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t and thus the action of AO in reopening is justified. 18.We find that the Hon'ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd Vs DCIT (supra) while considering the validity of 19 similar notice of reopening, which was also issued on the basis of information of investigation wing that they have searched a person who is engaged in providing accommodation entries, held that where after scrutiny assessment the assessing officer received information from the investigation wing that well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified in re-opening assessment. Further similar view was taken by Hon'ble Jurisdictional High Court in Pushpak Bullion (P) Ltd Vs DCIT (supra). Therefore, respectfully following the order of Hon'ble High Court, we find that the assessing officer validly assumed the jurisdiction for making re-opening under section 147 on the basis of information of investigation wing Mumbai. So far as other submissions of the ld AR for the assessee that there is no live link of the reasons recorded, we find that the Hon'ble Jurisdictional High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% being average rate of profit in industry. 20. Now adverting to the facts of the present case, the ld.CIT(A) held that in some other similar cases; though he had sustain 5% of Gross Profit Rate, considering the fact that where Gross Profit shown by those assessee's are more than 5%. However, in the present case, the assessee has merely shown Gross Profit Rate only at 0.78% of turnover, accordingly, the ld. CIT(A) was of the view that disallowance of 12.5% of impugned purchases/bogus purchases would be reasonable to meet the end of justice. 21. We have seen that during the financial year under consideration the assessee has shown total turnover of Rs. 66,09,62,458/-. The assessee has shown Gross Profit @ .78% and net Profit @ .02% (page 11 of paper Book). The assessee while filing the return of income has declared taxable income of Rs. 1,81,840/- only. We are conscious of the facts that dispute before us is only with regard of the disputed purchases of Rs, 4.34 Crore, which was shown to have purchased from the entity managed by Bhanwarlal Jain Group. During the search action on Bhanwarlal Jain no 22 stock of goods/ material was found to the investigation party. Bhanwarlal Jain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , without appreciating the fact that the party appeared before the Ld. A.O. and given the full detail of purchase of Rs. 38,53,943/-. (8) The appellant craves leave to add, alter or delete all or modify any or all the above grounds of appeal." 29.The assessee in ITA No.247/SRT/2017 (AY 2008-09) raised the following grounds of appeal: (1) On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in not considering that the assumption of jurisdiction by the Ld. Assessing Officer is bad in law as the conditions laid down under the Act for initiating reassessment proceeding have not been fulfilled. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in estimating the profit @ 12.50% on alleged bogus purchase, without appreciating the fact that the payment was made through cross account payee cheque and the same goods were subsequently sold and quantity is tallied and the addition was made without providing any opportunity of cross examination, without any corroborative evidence and without providing copy of statements relied upon. (3) The appellant craves leave to add, alter or delete all or modify any or all the abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
