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TMI Blog2024 (12) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) has justified in law and on facts in deleting the addition of Rs. 3,51,71,221/- made on account of bogus purchases despite the fact that in an investigation conducted by the department, the director of M/s Delight Diam Pvt Ltd categorically admitted in his sworn statement that his entity did not carry any real business and inter-alia, the transactions carried out through bank channel by his entity was merely transfer entries undertaken against commission. 3. The appellant craves leave to amend or alter any ground or add a new ground, which may be necessary. 4. It is therefore prayed that the order of Ld. CIT(A) may be set aside and that of the Assessing Officer be restored." 3. The assessee is engaged in sarafi business and trading of metals. The case of the assessee has been reopened u/s 147 of the Act based on the information received from DDIT (Inv.), Unit-2, Surat. The information reveals that the company named M/s. Delight Diam Pvt. Ltd. is involved in providing accommodation entries related to diamond trading as confessed by the Director of the company Shri Deepak K. Babel during the course of statement recorded u/s 131 of the Act on 05.03.2018. As per the inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enquiry to establish that the said purchases are bogus considering the assessee has brought on record documentary evidences to establish the genuineness of the purchase transactions. Further the payments for the said purchases were done through proper banking channels and there is no evidence brought on record by the AO to establish that the said payments were routed back to the assessee. Furthermore, the sales have not been doubted by the AO as the assessee has furnished documentary evidences of sales too." 6. Aggrieved, the Revenue is in appeal before us. 7. During the hearing, the ld. DR argued elaborately taking cue from the Assessment order. He argued that the reassessment has been initiated based on the sworn statement given by Shri Deepak Kailash Babel. Since the statement has been given on oath, it cannot be considered as retracted unless the assessee brings any other relevant material on record. He further argued that the balance-sheet of the company namely M/s. Delight Diam Pvt. Ltd. backed by the statement given by the Director Shri Deepak K. Babel clearly proves that there is hardly any item or volume with reference to the assets of the company through which the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeping closing stock as Nil. The ld. AR argued that the assessee could not have sold diamonds to M/s. Isabelle Tours N Travels and M/s. Shreeji Overseas (I) Pvt. Ltd. unless he had purchased diamonds from M/s. Delight Diam Pvt. Ltd. It was argued that M/s. Shreeji Overseas (I) Pvt. Ltd. and M/s. Isabelle Tours N Travels would not have paid an amount of Rs. 3.56 crores unless they have received diamonds and it proves that the assessee had purchased diamonds worth Rs. 3.53 crores. It was also argued that the allegation of the Revenue that the diamond purchases are bogus is countered by the fact that the diamonds have been sold and the assessee has received the money equivalent to the diamond sold. 9. Rebutting the arguments of the ld. Counsel for the assessee, the ld. DR argued that the statement of Shri Deepak Babel clearly proves that he has never sold any diamond to the assessee, and if at all the assessee has sold the diamonds, it is out of the unaccounted purchase of the diamonds which could have been sold to M/s. Isabelle Tours N Travels and M/s. Shreeji Overseas (I) Pvt. Ltd.; and even on that count also the unaccounted purchases needs to be treated as unaccounted investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of money to various persons. The Revenue has also not disputed that the sales parties were bogus to buttress the arguments that the assessee is acting as a conduit for transfer of money. The Assessing Officer has held that the assessee has inflated the purchases by taking accommodation entries to reduce the legitimate tax liability (para 4.5 of the AO). If that is the case, the contention of the Assessing Officer cannot be accepted that, in order to sell goods worth Rs. 3.56 crores the assessee has inflated the purchases by Rs. 3.51 crores. Further, we find that there was a total of 10 transactions entered by the assessee with regard to the sale and purchase of goods. All the 10 transactions involved selling of goods/diamonds which has been purchased and the details are as under:- Deptt Paper Book No. Name of Supplier Date of Purchase Purchase Bill No. Qty in Crts Purchase Amount Deptt Paper Book No. Name of Buyer Date of Sale Sale Bill No. Qty in Crts Sales Amount Profit Margin % marg in 37,47 Opening Stock Opening Stock Opening Stock 9.85 209523.00 85-86 Delight Diam P Ltd 05-01-2012 DD ..... X X X X Extracts X X X X X X X X Extracts X X X X
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