9911796707
TMI Blog2023 (10) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.02.2019 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 28.03.2016 by the Assessing Officer, Ward 50(3), New Delhi (hereinafter referred to as 'ld. AO'). 2. The issue in dispute in assessee's appeal as well as in Revenue's appeal is only on account of disallowance made for unverifiable purchases. 3. We have heard the rival submissions and perused the material available on record. We find that the assessee is an ownership firm carrying on the business of trading in jewellery. The return of income for the AY 2013-14 was filed by the assessee firm on 14.09.2013 declaring total income of Rs. 3,82,119/-. During the course of assessment proceedings, the entire books of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supplier in respect of M/s Dharam Impex and M/s Chintamani Exports; e) Certificate of Import-Export Code and Central Sales-tax Registration in respect of Dharam Impex; f) Gujarat VAT and Maharashtra VAT registration certificate of M/s Dharam Impex; g) VAT returns of all the parties; h) CST returns of M/s Chintamani Exports; and i) Affidavits duly notarized from all the aforesaid parties confirming the supply of diamonds duly mentioning the quantity, invoice number, date of invoice and value thereon and also confirming the fact of receipt of monies for the same from the assessee through regular banking channels. These affidavits are enclosed in pages 45-49 of the paper book. 5. The ld. AO disbelieved the entire documents fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut with the assessee by furnishing the necessary documentary evidences. The fact of enquiries conducted by the ld. AO and the documents submitted by those five suppliers are enclosed in pages 114 to 135 of the paper book. 8. It is a fact that the transactions carried out by the assessee on account of the first five parties listed supra, was treated as bogus by the ld. AO based on the statements recorded from Shri Rajendra Jain and Surendra Jain u/s 132(4) of the Act during the course of their search u/s 132 of the Act. Further, DCIT, Central Circle-4, Surat had also submitted a report that all the premises of the suppliers were found to be closed on the Inspector's visit thereof. The assessee submitted before the ld. CIT(A) that a search w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee in respect of these purchase transactions from five parties. Accordingly, he applied the gross profit rate of 19.84% on the value of disputed purchases from five parties in the sum of Rs. 2,67,66,150/- and added the profit embedded in the value of such purchases at Rs. 53,10,404/- (Rs. 2,67,66,150/- x 19.84%) as income of the assessee. 9. In respect of the purchases made by the assessee during Anshika Jewellers, the ld. CIT(A) similarly applied the gross profit rate of 19.84% as profit embedded in the value of such purchases and added a sum of Rs. 16,82,928/- (Rs. 84,82,500/- x 19.84%) as income of the assessee. 10. Aggrieved by the aforesaid action of the ld. CIT(A), both the assessee as well as the Revenue are in appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchases made by the assessee from the five suppliers merely based on search statements recorded from certain third parties at Surat during the course of search conducted in AY 2008-09 which are absolutely not relevant for framing the assessment in the AY 2013-14 in the hands of the assessee. Hence, we hold that the ld. CIT(A) erred in bringing to tax the profit element of 19.84% on the value of disputed purchases. In fact, no addition could be made in these peculiar facts and circumstances of the case in view of the fact that the purchases made by the assessee together with the corresponding sales thereon and the profits derived thereon (which includes profit on disputed purchase and undisputed purchase) have already been disclosed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other means to verify the existence of the said supplier by the Revenue in the manner known to law. The assessee had duly discharged its primary onus to prove the veracity of the purchases. The corresponding sales is also duly disclosed by the assessee. Hence, there is absolutely no justification for making any addition by disbelieving the purchase made from Anshika Jewellers. Hence, we hold that no addition should be made by disbelieving the purchases from Anshika Jewellers. Accordingly, the grounds raised by the assessee are allowed and the grounds raised by the Revenue are dismissed.
13. In the result, the appeal of the assessee is allowed and the appeal of the Revenue is dismissed.
Order pronounced in the open court on 26.07.2023. X X X X Extracts X X X X X X X X Extracts X X X X
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