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TMI Blog2018 (4) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... purchased by the assessee than there was no occasion to doubt the purchases -AO only doubted 90% of the purchases and made the addition to that extent but if the purchases were not genuine, the addition ought to have been made of the whole amount and not only of 90% and when the sales of the same items were accepted as genuine than the addition could not have been made for the purchases - additions deleted - decided in favour of assessee. - ITA No. 2266/Del/2017 - - - Dated:- 6-4-2018 - Sh. N. K. Saini, Accountant Member For The Assessee : Sh. Pradeep Jindal, CA For The Revenue : Sh. S. R. Kaushik, Sr. DR ORDER This is an appeal by the assessee against the order dated 28.02.2017 of ld. CIT(A)-16, New Delhi. 2. Following grounds have been raised in this appeal: That on facts and in law, the Hon'ble Commissioner of Income Tax (Appeals) - 16 erred in upholding the addition made by the AO without fully appreciating the facts and contention of the appellant and therefore, the Order of the Ld. Commissioner of Income Tax (Appeals) is bad in law. 1.1. That the learned CIT (A), has erred in affirming the jurisdiction of the AO under section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modify or otherwise amend the grounds before the appeal is heard and finally disposed of. 3. Vide Ground Nos. 1 to 3, the assessee has challenged the validity of the reopening u/s 147 of the Income Tax Act, 1961 (hereinafter referred to as the Act) and vide Ground No. 4, the grievance of the assessee relates to the sustenance of addition of ₹ 27,06,075/-. 4. Facts of the case in brief are that the AO received the information from the Investigation Wing of the department that the assessee was one of the beneficiary of the accommodation entry provided in the nature of bogus transaction in the form of sales/purchases and unsecured loans by Shri Rajendra Jain, Shri Sanjay Choudhary and Shri Dharmi Chand Jain group. A search operation was carried out on 03.10.2013 by Investigation Wing, Mumbai and various evidences were collected, the statements of various persons including Shri Rajendra Jain, Shri Surendra jain and Shri Mudit P. Karnawat were recorded, in those statements, it was admitted that all the concerns controlled and managed by them were not doing any real trading but indulged in paper transaction only. They also explained the modus operandi of their business th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by observing that in the grey market, goods are transacted at the lower price than market price as well as to pay some of the amount in cash to bogus bill providers. 6. Being aggrieved the assessee carried the matter to the ld. CIT(A) who confirmed the addition by observing as under: Ground No.4 5: I have considered all the facts and circumstances of the case. The Assessing Officer in his assessment order has discussed in great details about this particular transaction involving purchase of diamond of ₹ 27,06,075/-. The Assessing Officer has relied on the statement of Sh. Rajendra S. Jain who before the Investigation Wing disclosed and elaborated the modus operandi of bogus transaction, been undertaken through his concerns. The concerns were directly or indirectly controlled by Sh. Rajendra S. Jain. During the previous year under consideration the appellant claimed to have purchased polished diamond of ₹ 27,06,075/- from M/s Vitrag Jewels and M/s AVI Exports. The appellant during the assessment proceedings, to prove the genuineness of the transaction has submitted the sale bill, ledger account, bank statement, stock register, copy of return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee to cross examine Sh. Rajendra S. Jain and Mudit P. Karnawat, an opportunity was provided by the Assessing Officer to the appellant, when he asked them to produce both the proprietors. The first onus to prove the purchases as genuine was on the shoulders of the appellant. He had made purchases of quite substantial amount and it was his responsibility to produce them before Assessing Officer. However, he failed to do so whereas he was ready for any ' paper work . Considering the totality of facts and circumstances and the detailed submission of the appellant, I am inclined to accept the conclusion drawn by the Assessing Officer, because the evidence here, on the principle of preponderance of probability, clearly weigh against the appellant. Therefore, the addition of ₹ 27,06,075/- is confirmed. 7. Now the assessee is in appeal. The ld. Counsel for the assessee submitted that the stock register as well as purchases shown by the assessee were accepted by the AO and that the sales from the said purchases were not doubted, so there was no justification in treating 90% of the purchases from two parties as non-genuine and making the addition. It was further ..... X X X X Extracts X X X X X X X X Extracts X X X X
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