TMI Blog2022 (3) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... for the difference in gross profit rate of 10.31% [11.5 (-) 1.19] - HELD THAT:- As assessee submitted that the Income-Tax authorities cannot blow hot and cold in the same breath. According to him if Income Tax Department has accepted the assessee as controlled and managed by Shri Bhanwarlal Jain for providing accommodation entries, then addition to compensate gross profit rate is not justified. The ld. D.R also could not controvert the fact that the assessee has been held a concern controlled by Shri Bhanwarlal Jain engaged only for providing accommodation entry bills. In our opinion such circumstances, the lower authorities are not justified in sustaining the addition to cover the low gross profit rate on the basis of books of account of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y.2015-16 raising the following grounds: 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 u/s 147 of the Act have not been fulfilled. 2. On the fact and circumstances of the case and in law the Ld. CIT (A) erred in estimating an addition of Rs.2,71,98,014/- (being 10.31% of Rs. 26,38,02,270/-) by allegedly treating genuine turnover made by the appellant, as bogus sales. 3. On the fact and circumstances of the case and in law the Ld. CIT (A) erred in making an addition of Rs. 2,71,98,014/- without appreciating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for providing accommodation entries of purchase/sale of diamonds, unsecured loans and advances etc. The A.O reopened the assessment by way of issue of notice u/s 148 of the Act on 05.09.2018 after recording reasons for reopening of the assessment. The reassessment u/s 143(3) r.w.s 147 of the Income Tax Act, 1961 (in short the Act ) was completed on 27.11.2019, wherein the A.O made two additions to the returned income. The first addition is in respect of the commission income amounting to Rs.14,94,462/- on protective basis. Accordingly to the assessing officer Shri Bhanwarlal Jain has used this concern for providing accommodation entry transaction and therefore, substantive addition of earning commission from accommodation entries was ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee for A.Y. 2015-16. It has been proved beyond doubt that the above entity is not carrying out any genuine business of trading in diamond but is solely used for giving accommodation entries by Bhanwarlal Jain and family and the above entity is only an associate. Hence, the commission income earned by the entity mentioned above has to be added in A.Y. 2015-16 and has thus escaped assessment within the meaning of section 147 of the Income Tax Act, 1961, which is attributable to failure on the part of the assessee to make full and true disclosure in the return of Income. 6.1 Further, the A.O in his detailed finding from para 6 to 12 also had the assessee concern as managed and controlled by Shri Bhanwarlal Jain for giving accommodat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccommodation of Bogus Purchases (0.075% of Rs.44,68,70,476/-) Rs. 3,35,152/- 3. Accommodation of Bogus Sales (0.075% of Rs.26,38,02,270/-) Rs. 1,97,851/- 4. Total commission Rs. 16,60,513/- 5. Less: 10% of total commission as discussed above Rs. 1,66,051/- 6. Undisclosed Commission income Rs. 14,94,462/- In the instant case, the total undisclosed commission which is required to be added is Rs.14,94,462/-. However, it is observed that the undisclosed commission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for low gross profit rate. The ld. CIT(A) has also confirmed this addition to compensate low gross profit rate. The ld. Counsel of the assessee submitted that the Income-Tax authorities cannot blow hot and cold in the same breath. According to him if Income Tax Department has accepted the assessee as controlled and managed by Shri Bhanwarlal Jain for providing accommodation entries, then addition to compensate gross profit rate is not justified. The ld. D.R also could not controvert the fact that the assessee has been held a concern controlled by Shri Bhanwarlal Jain engaged only for providing accommodation entry bills. In our opinion such circumstances, the lower authorities are not justified in sustaining the addition to cover the low gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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