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TMI Blog2018 (5) TMI 1695X X X X Extracts X X X X X X X X Extracts X X X X ..... n the present case is a partnership firm which is carrying on the business of jewelers. The return of income for the year under consideration was filed by it originally on 31.10.2007 declaring a total income of ₹ 5,20,450/-. The said return was initially accepted by the A.O. under section u/s 143(1) on 27.02.2009. The A.O, thereafter received information that M/s. Vitrag Jewels was one of the firms providing bogus entries. In his statement recorded by the department, Shri Rajendra Jain, employee of the said concern confessed that he was managing various concerns in order to provide bogus sale bills to domestic concerns for the diamonds. He stated that the concerns which were purchasing diamond in cash from Grey Market were taking bogus bills to regularise their purchases in the books and such bills were provided by the various concerns including M/s. Vitrag Jewels. The names of various concerns which had taken such bogus bills were also provided by Shri Rajendra Jain. Since the assessee firm was one of such concerns who had taken bill of ₹ 12,39,532/- from M/s. Vitrag Jewels on 20.02.2017, the assessment was reopened by the A.O. and a notice under section 148 was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y persons who may have attempted to benefit from the alleged racketeering. When investigation wing of Income Tax Department has busted the racket of bogus accommodation entries; and when the alleged entry operators have admitted on oath that they ran this racket; and when name of the assessee is discovered as one of the beneficiaries of the alleged racket; and when amounts are actually found in the books of assessee to be credited in the name of alleged entry operators; burden was on the assessee to prove that it was not a beneficiary of the racket . In this case the appellant failed to prove that his transaction was affected through delivery and no attempt was made to produce the parties from where the purchase has been made. Keeping in view of the aforesaid fact and decision of Hon ble Supreme Court in case of N.K. Protiens Ltd. (SLP) 269 of 2017, wherein entire bogus purchase was treated as income of the appellant. The action taken by the A.O. is hereby upheld and the grounds of appeal are dismissed. Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal. 4. In ground no 1 and 2, the assessee has raised the preliminary issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for deduction. The purchases would be eligible for deduction only when the source for such purchases are explained. In the instant case it is the case of the revenue that the assessee had issued account payee cheques to M/s Vitrag Jewels (supplier of diamonds to assessee) and had received cash in return from them and the said cash is utilized by the assessee for purchase of diamonds from unknown parties in the grey market. We find that there is absolutely no evidence that is brought on record to prove that the assessee had indeed received cash back from Vitraj 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. We also find that Shri Rajendra Jain had subsequently retracted his statement by way of an affidavit deposing before the Notary Public on 9.1.2014 (enclosed in pages 96 to 100 of 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 (lnv) who recorded the stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner: It has been asked to explain manner of receipt of above said items of purchases in the hands of the assessee. It is to submit that normally as a general business practice, brokers/dealers from sarrafa bazaar/jewellery market (mainly from Surat and Mumbai), visit a prospective buyer s business place and display various items of diamonds and precious/semi-precious stones and the buyer makes the final selection and bills are subsequently raised by the seller directly. Naturally we 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, orders are also placed over phone and goods are sent through trusted and regular couriers. 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 7.2 We find that the assessee had furnished the summary of diamonds movement for the period 1.4.2005 to 31.03.2007 indicating the quantity and value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payments are not genuine or that the payments having been made by the assessee to the recipients have found their way back to the assessee some way or the other. Such being the case, we find that the authorities below were not Justified in rejecting the claim of the assessee for payment of commission. Since all the ingredients necessary for genuine business transaction exist in this case we do not find any merit in the addition made by the AO and in the action of the Ld. CIT(A) in confirming the same. In reversing their orders, and respectfully following the decision of the Hon'ble Calcutta High Court in the case of Masther Plant (India) Ltd., (supra) and the case of the Tribunal, Mumbai Bench (Third Member) discussed herein above, we allow the appeal of the assessee'' Heard Mr. Das, learned advocate appearing for the appellant revenue and Mr. J.P, Khaitan, learned senior advocate appearing for the respondent assessee. Before us the revenue could not demonstrate either the money was not paid or the money was paid and routed back to the assessee. In the circumstances interference with the order of the Tribunal is not warranted. No. question arise for adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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