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TMI Blog2017 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... nd evidences to show the corresponding amounts of sales against the impugned bogus purchases and then the amount of addition sustained @ 8% by the Ld. CIT(A) shall be further reduced by the amount of gross profit actually shown on these purchases. The addition shall be sustained on the balance amount. The AO shall give adequate opportunity to the assessee before deciding this ground afresh. Thus, assessee would get part relief. This ground may be treated as allowed for statistical purposes. - I.T.A. No. 7310, 7311, 7312, 7313, 7314/Mum/2016 - - - Dated:- 19-5-2017 - Shri Saktijit Dey (Judicial Member) And Shri Ashwani Taneja (Accountant Member) Appellant by : Shri Vimal Punmiya Respondent by : Shri Purushottam Kumar (Sr AR) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there are purchases from various other parties also which were controlled and managed by one Mr. Rajendra Jain in whose case search and seizure action was carried out by the Investigation Wing of the department and his statement was recorded u/s 131 of the Income-tax Act in which it was admitted that he was involved in the activities of providing accommodation entries through various concerns. In response, during the course of assessment proceedings, the assessee submitted that purchases made by the assessee were genuine and in support of its claim, the assessee submitted details of purchases and corresponding sales of the goods purchased, copies of bills, invoices, other evidences and stock register also showing quantitative reconciliati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aining accommodation entries to avoid the impact of levies and defrauding revenue. We can find such a restraint advised by the Hon ble Gujarat High Court in the case of Simit P Seth (supra) without which avoiding payment of levies and defrauding revenue will continue unabated. However, in the present case the decision of Simit P Seth is not applicable in a cash-iron straight-jacket way except the theory of restraint laid down by them since the nature of business in the case before them was different from the present case. Therefore, 12.5% GP cannot be adopted in the present case which is into diamond business. Since the appellant itself has agreed before the AO to adopt 8% as GP instead of 12.5% as proposed by him during the course of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced true profit though Alleged purchases. If the assessing officer contention is accepted than it will be lead unexpected OP which will be unpractical. 11. Assessing officer relied on merely on statement of Rajendra Jain which is already retracted by him. 12. Sample of Bills payment thought banking channels. Bill at page 54 and payment at page 71 Bill at page 48 and payment at page 69 In support of aforesaid arguments, Ld. Counsel relied upon various judgments wherein it was held that no addition could be made solely on the basis of third party s statement. 6. In addition to the above, the Ld. Counsel made an alternative submission that in case addition was to be sustained on the basis of offer made by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that how much addition should be made. Ld. CIT(A) has sustained the addition @ 8% The revenue is not in appeal before us. Therefore, the addition is sustained at 8% as has been done by Ld. CIT(A). However, the only grievance of the assessee which is now left is that the amount of profit which is already disclosed by the assessee should be deducted; otherwise it will lead to excessive addition. We have carefully considered in the facts of this case and find that the peculiar facts and circumstances of the case demand that proportionate amount of gross profit already disclosed by the assessee corresponding to the amount of bogus purchases should be deducted from the addition made. The assessee emphatically stated before us that if this is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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