TMI Blog2022 (11) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... of similar disputed purchases, either from Rajender Jain, Bhanwar Lal Jain, Gautam Jain or PK Jain, we have consistently restricted or increased the similar addition to 6% of such purchases. Taking the consistent view, the disallowance restricted by ld CIT(A) @ 5% are increased to 6% of the total aggregate of impugned / bogus purchase. Appeal of the Revenue is partly allowed. - ITA No.63/SRT/2019 - - - Dated:- 31-10-2022 - Shri Pawan Singh, Judicial Member And Dr Arjun Lal Saini, Accountant Member For the Assessee : None For the Revenue : Shri Ashok B Koli, CIT-DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of ld. Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of purchase from Shri Gautam Jain Group, wherein Investigation Wing, Mumbai made a search on 03.10.2013. during search action huge incriminating materials were found which proves that Gautam Jain Group and his was indulging and providing accommodation entry without actual delivery of goods. The statement of Gautam Jain Group under section 132(4) of the Act was recorded, wherein he has admitted the entire nature of bogus transactions by his various business concerns. The assessee is one of the beneficiary who has shown purchase from Rajan Gems and Rajat Diamond Exim Pvt. Ltd., of aggregating of Rs.6.170 crores. On the basis of such information, the Assessing Officer issued show cause notice as to why the addition of aggregate pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00%) diamond purchases were sold during the trading activities which resulted into nil closing stock of the year. The sale of assessee was accepted by the Department. Thus, the corresponding purchase should also be accepted as genuine. The Assessing Officer has not rejected the sales of assessee. The payments made to the suppliers through account payee cheques. The assessee also relied on certain case law. The assessee M/s Euro Traders, Prop. Pwan Chippadeals in all type of diamonds gold jewellery and having turnover of Rs.112,79,73,501/- in assessment year 2013-14. The business of assessee was carried out from Surat and Mumbai and return of income filed by the assessee accompanied with audit report under section 44AB of the Act. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly profit element embedded in the bogus/ unverifiable purchases may be taxed. Accordingly, Ld. CIT(A) after considering all facts and circumstances of the case, restricted the disallowance to the extent of 5% of purchases from the entities managed by Praveen Kumar Jain Group. Aggrieved by the order of Ld. CIT(A) the Revenue has filed present appeal before the Tribunal. 5. None appeared on behalf of assessee despite service of notice of hearing on more than two occasions. Initially the assessee was represented through Authorized Representative (AR), who later on withdraw his authority letter from this case on last date of hearing i.e., 23.08.2022 and informed the assessee. Such letter sent by ld AR is on record. Today none appeared on beh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of Ld. CIT(A. To support his submissions, the ld CIT-DR for the revenue relied on the decision in Urmila Co Vs Dy CIT (2013) 35 taxmann.com 589(Mum-Trib). 7. We have considered the submissions of ld DR for the revenue and have gone through the orders of the lower authorities carefully. We find that during assessment the Assessing Officer made addition of 100% of the purchases shown from the entity managed by Gautam Jain and his group. We find that no finding was given by the assessing officer on various evidences furnished by the assessee. The sales of the assessee was not rejected by assessing officer. It is a fact of common knowledge that sale cannot be affected without having purchases. Before, ld CIT(A) the assessee filed cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t view, the disallowance restricted by ld CIT(A) @ 5% are increased to 6% of the total aggregate of impugned / bogus purchase. So far as reliance on case law by ld CIT-DR for revenue in in Urmila Co Vs Dy CIT (supra) is concerned, the facts of the said case are entirely different. In the said case, the expenses were claimed on payment made to fisherman as protection money, which is prohibited under the provisions of Indian Penal Code (IPC), thus, the deduction of such expenses were hit by the proviso of section 37 of the Act. In the result, the grounds of appeal raised by the revenue is partly allowed. 9. In the result, appeal of the Revenue is partly allowed. Order pronounced in the open court on 31/10/2022 and the result was also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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