9911796707
TMI Blog2022 (11) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 69C of the act for Rs.1,49,20,200/-" 2. That on the facts & circumstances of the case and in law, the CIT(A) has erred by not following the principle of natural justice in respect of consideration of the retraction of statement u/s 132(4) of the act of Shri Rajendra Jain without giving an opportunity to the AO of being heard." 3. "That on the facts & circumstances of the case and in law, the CIT(A) has erred in not considering the facts that the assessee failed to fulfill the three criteria, i.e., identity & creditworthiness of the creditor and genuineness of the transaction, laid down by Several Courts despite asked the assessee company in course of scrutiny to do so." 4. "That the appellant craves leave to add to and/or alter, amend, modify or rescind the grounds hereinabove before or hearing of this appeal." 3. The brief facts of the case are that the assessee had filed its return of income showing total income of Rs.10,52,830/-. The return was processed u/s 143(1) of the Act. Thereafter, the Assessing Officer (in short 'the A.O') was in receipt of information from DGIT(Inv.), Mumbai that the assessee company had received bogus entry in the form of purchases from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of confessional statement of one Shri Rajendra Jain made before Investigation Wing, Mumbai, however, the said statement was retracted by said Shri Rajendra jain by way of an affidavit and, therefore, no reliance could be placed on the retracted statement of Shri Rajendra Jain. That all the purchases were made through account payee cheque to the suppliers and that the copies of invoices for purchases and stock statement i.e. stock reconciliation statement giving complete details with regard to opening stock, purchases, sale and closing stock were provided and the books of accounts have not been rejected and even the sales have not been doubted. It was further submitted that the assessee company was engaged in the business of manufacturing and trading of Diamond Jewellery, Diamonds and Gold. The purchases treated bogus by the learned A.O. had been subsequently sold by the assessee company and the sales have not been doubted. It was further pleaded that even legally, entire purchases cannot be treated as bogus. The assessee further relied upon the decision of the Coordinate Mumbai Bench of the Tribunal in the case of "Ashwin Purshotam Bajaj vs. ITC (ITAT Mumbai) ITA. No. 4736/Mum/2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn for the A.Y. 2007-08. 3. Copy of PAN card. 4. Ledger of M/s Shreejee Jewellers Pvt. Ltd. in the books of M/s Vitrag Jewels for the period 01/04/2006 to 31/03/2007 and 01/04/2007 and 31/03/2008. 6. Ledger of M/s Vitrag Jewels in the books of M/s Shreejee Jewellers Pvt. Ltd. for the period 01/04/2006 to 31/03/2007 and 01/04/2007 and 31/03/2008. 6. Copy of bank statements of M/s Shreejee Jewellers Pvt. Ltd. reflecting the relevant transactions. Further the appellant filed its Audited Statement of Accounts and Tax Audit Report for the year ended 31.03.2007 and also filed the copy of the following cases law of 1. Sanju Jalan, Kolkata vs ITO, Ward 36(3), Kolkata, ITA No. 634/Kol/2017 2. M/s. M. B. Jewellers & Sons vs DCIT, Circle 44, Kolkata (ITANo.1/Kol/20 17) - M/s Vitrag Jewels is also one of the disputed purchase of appellant company during year under Consideration, Hon'ble Jurisdictional ITAT elaborately dealt in this order. 3. ITO ward-33(1), Kolkata vs Saraf Jewels & Co. (ITA No. 1581/Kol/2016 and 4. Copy of order of CIT(A)_15, Kolkata in appeal No. 264/CIT(A)-15/18- 19/Cir-8(2)/R&T/KOL passed on 01.10.2019 for the A.Y. 2009-10 in case of M/s. Shreejee Jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee for purchase of diamonds from unknown parties in the grey market. We find that this is absolutely no evidence that is brought on record to prove that the assessee had indeed received cash back from Vitrag Jewels in lieu of Cheque issued to them or from any other party except making a wild allegation to that effect and by placing reliance on the statement of Shri Rajendra Jain. It is observed that Shri Rajendra Jain had subsequently retracted his statement by way of an affidavit deposing before the Notary Publicon 09.10.2014 (enclosed in pages ITA No. 1/Kol/2017 M/s. M. B. Jewellers &Sons AY 2007-08 96 to 100 Or paper book) He had also explained the circumstances under which the original statements had been recorded and effectively stated that the same was recorded under coercion and the statement recorded therein were as per the desire and will of the DDIT(inv) who recorded the statement Shri Rajendra Jain had also initially filed an affidavit on 21.10.2013 (enclosed in paged 91 to 95 of paper book) retracting the statement recorded by DDIT(Inv.). He also filed latter to DCIT Central Circle-4, Surat on 31.10.2014 explaining the entire facts of the case and the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... buyer's business place and display various items of diamonds and precious/semiprecious stones and the buyer makes the final selection and bills are subsequently raised by the seller directly. Naturally appellant had also been purchasing diamonds precious and semi-precious stones from outside dealers in the above manner. Furthermore, at time partners their close family members or family friends also visit the sellers place partners. Sometimes order are also placed over phone and goods are sent through trusted and regular couners. As a normal business practice goods are regularly received in the above stated manner However at the moment it is not possible to exactly recollect how the above consignments were received because of long time gap. The assessee had furnished the summary of diamonds movement for the period 1. 4. 2006 31.03.2007 indicating the quantity and value in opening balance purchases 53ies and closing balance (enclosed in page 53 of paper book) The appellant had also fled the purchase bills of M/S. Vitrag Jewels (enclosed in pages 68 lo 72 of the paper book) together with the ledger account of M/S. Vitrag Jewels as appearing in the books of the assessee firm for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances and the judicial pronouncement of the Hon'ble ITAT in the case of M/s M.B. Jewelers & sons vs. DCIT, Circle-44 Kolkata (1TA No.1/Kol/2017), Hon'ble Jurisdictional High Court in the case of CAT vs Alpha Hydronics Pvt Ltd in ITA No. 549 of 2004 dated 10.11.2014 wherein the facts are identical and similar to this appeal and in the case of appellant for the A.Y. 2009-10 wherein Hon'ble CIT(A)-15 Kolkata has granted full relief. Reliance upon the various Hon'ble Courts aforesaid jurisdictional pronouncements. I have considered the facts and find merit in the submission of the appellant full relief to the appellant by deleting the addition made by the AO of Rs. 1,49.20,200/- and the grounds of appeal 1 to 4 is allowed." 6. A perusal of the above order reveals that the ld. CIT(A) has thoroughly examined the evidence on record and found that the assessee has produced all the relevant evidences including complete details and bills and vouchers and further that the books of accounts of the company have been duly audited and further that the assessee has been maintaining quantitative details of purchases and sale and opening and closing stock. Further, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty and value in opening balance, purchases, sales and closing balance (enclosed in page 53 of paper book). The appellant had also filed the purchase bills of M/s. Vitrag Jewels (enclosed in pages 68 to 72 of the paper book) together with the ledger account of M/s. Vitrag Jewels as appearing in the books of the assessee firm for the period 1.4.2006 to 31.3.2007 and for the period 1.4.2007 to 31.3.2008 wherein the payments were made to M/s. Vitrag Jewels by account payee cheques. Admittedly the payments were made to M/s. Vitrag Jewels through account payee cheques on 22.2.2008 (Rs.10,00,000/-) and on 27.3.2008 (Rs.5,57,470/-). Hence the primary allegation of the AO that the ATA No. 1/Koi/2017 M/s. M. B. Jewellers & Sons A. Yr. 2007-08 assessee had received the cash back in lieu of account payee cheques issued from M/s Vitrag Jewels (based on the statement of Shri Rajendra Jain) and used the said cash for purchasing diamonds from unknown parties in the grey market. Gets defeated on this count also, in as much as the AO had accepted the fact that factum of purchases of diamonds indeed has been made by the assessee in the Asst Year 2007-08 (i.e. the year under appeal) and whereas the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021 for assessment year 2012-13 - The Revenue in this appeal has taken the following grounds of appeal: "1. "That on the facts & circumstances of the case and in law, the CIT(A) has erred in deleting the addition made u/s 68 of the act for Rs.1.30 Crore and interest on the alleged unsecured loan of Rs.7,18,357/- ignoring the ratio laid down in the case of CIT -vs- PRECISION FINANCE PVT. LTD. 208 ITR 465 (CAL), CIT -vs- UNITED COMMERCIAL AND INDUSTRIAL Co. (P) Ltd. 1871TR 596 (CAL); CIT -VS- BIJU PATNAIK 160 ITR 674 (SC) and in the case of NRA Iron & Steel Pvt Ltd (SC)." 2. That on the facts & circumstances of the case, the CIT(A) has erred in law by allowing appeal of the assessee company in respect of the addition made on account of bogus purchase without appreciating the facts that the assessee failed to prove one or two conditions out of three principal criteria laid down by High courts and by Supreme Court in number of cases including in the case NRA Iron & Steel Pvt Ltd, i.e. identity & creditworthiness of the creditors and genuineness of the transactions." 3. "That on the facts & circumstances of the case and in law, the CIT(A) has erred by not following the principle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doubted to be the purchase from grey market. In view of this, we do not find any infirmity in the order of the ld. CIT(A) so as to the issue raised by the Ground No.2 & 3 in respect of bogus purchases is concerned. 12. Coming to the Ground No.1, the Revenue vide Ground No.1 has contested the action of the CIT(A) in deleting the additions made on unsecured loans and advances. We note that the ld. CIT(A) has given details of the documents furnished by the assessee in respect of each of the party and thereby has arrived at a conclusion that the assessee has duly established the identity and creditworthiness of the parties and genuineness of the transaction. Even the ld. CIT(A) has noted that subsequently the said loan has repaid by the assessee to the concerned parties. The relevant part of the order of the CIT(A) is reproduced as under: "In terms of section 68 appellant was required to establish the 3 ingredients i.e. identity, genuineness and creditworthiness. From the documents places on record, it appeared and all the unsecured loan creditors had furnished/given the following documents to the appellant which are filed before me. 1. Shiv Shambhu Vincom Pvt. Ltd. 1. Ledger Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. for the A.Y. 2012-13 8) Copy of order u/s 143(1) for the A.Y. 2012-13 of Palak Mercantile Pvt. Ltd. evidencing the same is being regularly assessed. 9) Copy of Audited Financial Statements of the Palak Mercantile Pvt. Ltd. for the A.Y. 2012-13. 10) Ledger of Palak Mercantile Pvt. Ltd.in the books of M/s Shreejee Jewellers Pvt. Ltd. for the period 01/04/2011 to 31/03/2012. 11) Copy of bank statements of M/s Shreejee Jewellers Pvt. Ltd. reflecting the relevant transactions. 1. Saraogi Vinimay Pvt. Ltd. 1) Copy of Loan Confirmation. 2) Ledger Copy of Shreejee Jewellers Pvt. Ltd. in the books of Saraogi Vinimay Pvt. Ltd. for the period 01/04/2011 to 31/03/2012. 3) Certificate from Saraogi Vinimay Pvt. Ltd. reflecting the relevant transactions. 4) Copy of trade licence reflecting address proof of Saraogi Vinimay Pvt. Ltd. 5) Copy of PAN Card 6) Acknowledgement of filing income tax return of Saraogi Vinimay Pvt. Ltd. for the A.Y. 2012-13 7) Copy of Audited Financial Statements of the Saraogi Vinimay Pvt. Ltd. for the A.Y. 2012-13. 8) Ledger of Saraogi Vinimay Pvt. Ltd. in the books of M/s Shreejee Jewellers Pvt. Ltd. for the period 01/04/2011 to 31/03/2012. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. v. ITO [2004] 3 SOT 670 (Jodh.) 5. Sumak Powercap Ltd. v. Asstt. CIT [2005] 90 TTJ (Lucknow) 420 The appellant relied upon on various court cases mentioned in its submission. Moreover I also observed in the assessment order that the AO himself contradicting his finding on the facts mentioned in the assessment order, I am unable to accept AO's conclusions that loan creditors cannot be found at their respective address, the loan received from them is also considered to be bogus and repayment is not relevant. I am of the considered view that the appellant proved the identify, genuineness and credit worthiness of all the loan creditors, and therefore on 3 touchstones incorporated in section 68 of the I. T. Act, the addition of Rs. 1,30,00,000/- and Rs.7,18,357/- (on account of interest paid to the unsecured loan creditors) were not justified. The additions are accordingly deleted and ground no. 2 and ground no.3 are allowed." 13. Since the ld. CIT(A) has not only discussed in details the various evidences proving the identity, creditworthiness of the parties and genuineness of the transaction but also the fact that assessee has subsequently repaid the loan amount to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
