9911796707
TMI Blog2022 (11) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing grounds of appeal: "1. On the facts and circumstances of the case and in law, the ld. CIT(A) has erred in restricted the addition made by the AO of Rs. 3,88,21,441/- on account of bogus purchases to 5%. 2. On the facts and circumstances of the case and in law, the ld. CIT(A) has failed to appreciate the fact that the entire purchase from alleged concerns were bogus and was only to the suppress the profit of the beneficiaries which is substantiated by the statement on oath given by the entry provider. 3. On the facts and circumstances of the case and in law, the ld. CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the ld. CIT(A)-I, Surat may be set aside and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 33/3/2015 was served upon the assessee. 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 Investigation wing-Mumbai on Gautam Jain and his Group on 01.10.2013, which resulted in collection of evidence that Gautam Jain group and its associates were operating certain benami concerns in the name of their employees and staff for providing bogus accommodation entries of unsecured loans, sale and purchase of different kinds of material. It was unearthed that the assessee is one of the beneficiary of the accommodation entry and that Gautam Jain Group provided accommodation entr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rried out any trading activity and as per the prevailing practices, the assessee is maintaining ledger accounts /bank book/cash book etc. and the ledger of parties to whom transactions were carried out was produced. The reply of the assessee was not accepted by the assessing officer (A.O.). The Assessing officer took his view that the Department has conducted search and seizure in case of Gautam Jain and conclusively proved that he was engaged in business of providing accommodation entry only. The assessee has availed the benefit of modes operandi adopted by Gautam Jain to reduce his profit by inflating expenses of purchase by taking accommodation entry. The books of assessee to that extent is unverifiable and the purchases shown by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of entire aggregate of purchases, which has already been sold. The assessee furnished the details of impugned purchases and revised closing stock at the end of financial year and bills of purchases, confirmation of suppliers and bank statement showing payment through cheques. The assessee also relied on certain case laws. 6. The ld. CIT(A) after considering the submission of assessee, has restricted the addition to the extent of 5% of the amount/bogus purchases by taking view that in identical issues in his earlier order in Gagnani Impex (AY 20013-14) in Appeal No. CAS-3/512//2015-16 dated 24.11.2016 by referring various decisions of the Tribunal and decision of Jurisdictional High Court including in Mayank Diamonds Pvt Ltd Vs ITO (Tax app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation wing during the search action on Gautam Jain gathered sufficient evidence which proved that the said group was indulging in providing the bogus entry without actual delivery of goods. The disallowance made by the A.O. was justified. The ld. CIT(A) restricted the addition to the extent of 5% on the basis of decisions of the various Tribunals without appreciating the facts that the assessee has merely availed entry of bogus purchase without actual delivery of goods. The ld. CIT-DR submits that the facts in the case of Mayank Diamond are at variance, in the said case the director of that assessee himself was controlling the entire affairs, and there were circular transactions from the banks. In the said case the assessee has shown ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding accommodation entry without actual delivery of goods. We find that the A.O. during the assessment found so many discrepancies in the books of assessee and rejected the books result. The ld. AR of the assessee has not challenged such discrepancies nor made any submission that those observations of Assessing Officer are perverse. The limited issue for our consideration is whether the disallowance of alleged bogus purchases/impugned bogus purchases @ 5% are reasonable or justified. The ld. Sr. DR vehemently submitted that the disallowance restricted by the ld. CIT(A) on the basis of decision in the case of Mayank Diamond (supra) and that the ratio in the decision of Mayank Diamond (supra) is not applicable on the facts of the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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