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TMI Blog2019 (1) TMI 341X X X X Extracts X X X X X X X X Extracts X X X X ..... before us. As the facts and issues arising in all these four appeals are identical, for the sake of convenience they are heard together and disposed off by way of this common order. 3. The ld. Counsel for the assessee submitted that the re-assessment was initiated consequent to a receipt of information from DGIT(Inv.) Kolkata, that the assessee had taken accommodation entry from an entry operator of Mumbai, who had provided bogus entries for purchases. He submitted that the Assessing Officer questioned the assessee during the course of re-assessment proceedings and that the assessee has submitted each and every detail including details of purchases, invoice numbers, payments made through banking channels, stock registers giving quantitative details, corresponding sales/corresponding stock details etc. He submitted that the Assessing Officer issued notice u/s 133(6) to the sellers and all these notices were responded to by the sellers, who confirmed the transactions. He submitted that the only doubt that the Assessing Officer had was the manner in which the diamonds were transported from Surat to kolkata and in reply to this doubt, the assessee had furnished flight details along ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the seller appears to be different. No evidence in this regard was filed before the Bench. He relied on the order of the ld. Pr. CIT and argued that as no proper verification has been conducted by the Assessing Officer, there is an error in the order of the Assessing Officer which has caused prejudice to the revenue. Regarding the judgment of the Hon'ble Gujarat High Court in the case of Tejua Rohitkumar Kapadia (supra), he submitted that, in that case, the sellers had confirmed the transactions and hence it is distinguishable on facts. 3.2.1. In reply, the ld. Counsel for the assessee, Shri Anil Kochar, submitted that this is not assessment proceedings and it is not for the ld. CIT D/R to look at the copies of the documents in the paper book and express doubts on the genuineness of the same without verification. He wanted the ld. D/R to file an affidavit making the above allegations that the documents in the paper book are not genuine and submitted that suitable reply would be given. He filed strong objections and argued that the copies of boarding passes, copies of tickets etc. are genuine documents and that no authority had doubted the same till date. On the ledger accou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the year. The assessee has business of purchase and sale of diamonds and has manufacturing activities whereby jewellery is made out and sold. Kindly refer to the audited statement of accounts which would show the extent of the total purchases which have been made by the assessee and relevant sales and manufacturing of jewellery for sale. Your observation is that the A.O. could not verify the genuineness of the delivery of the alleged purchase material since it was not clarified from assessee side and from the seller as well. In this connection, it is submitted that as already stated earlier, the assessee purchases diamonds from parties situated at Mumbai and Surat and for this purpose the Directors travels to these places and after examining the diamonds take the delivery personally. This, the A.O., has specifically enquired from the assessee and the assessee, in turn, has submitted detailed explanation with regard to the same by submitting a letter dated 25.01.2016 during the course of hearing for the purpose of assessment. For the sake of convenience the extract of the same is being reproduced hereunder: - This refers to the ongoing proceedings U/S 148 of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amonds purchased by the assessee are duly supported by documentary evidences, these have been taken delivery of and brought to Kolkata as is evidenced, entered in accounts, appearing in purchases ledger and duly disposed off and either used for manufacture of jewellery or towards sale. All these evidences have been examined by the A.O. The assessee having not been satisfied with the proceedings u/s 148 and the resultant additions made by the A.O proceeding on the basis about the purchase price that could be estimated has made out a case for addition of amount to the total income by working out 3% of the total purchases. Against which an appeal has already submitted u/s 246A which is pending before the Ld. ClT (A) for disposal. It is to state that the A.O., as the records would reveal has taken into consideration all relevant documentary evidences which not only 'establish the purchases which have been made by the assessee in support of which Bills have been examined by the A.O. and its delivery and ifs arrival in the city along with the Director who travelled back to Kolkata by air, on the production of boarding pass of the airlines, the issue involved in the proceedings in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer. In our view this conclusion of the ld. Pr. CIT, is factually incorrect. The quantitative details have not been found fault with. None of the facts stated, have been controverted. The reply of the assessee extracted above demonstrated that all necessary documents and evidences were furnished before the Assessing Officer. The Assessing Officer had also issued notice u/s 133(6) of the Act, to the sellers at the addresses given by the DGIT-(Inv.), Kolkata. He had received replies from these persons confirming the transactions. He only doubted the mode of delivery of these diamonds. The assessee furnished sufficient evidence to prove the mode of delivery. On these facts, the Assessing Officer chose not to bring to tax 97% of the value of the purchases to tax as bogus purchases. The issue is covered in favour of the assessee by the decision of the Hon'ble Gujarat High Court in the case Tejua Rohitkumar Kapadia (supra), the SLP of which was dismissed by the Hon'ble Supreme Court in S.L.P. No. 12670/2018. In this case also there is no proof of any money being routed back to the purchaser. 5.2. Even otherwise, when the issue is pending before the ld. CIT(A)- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , again the Commissioner must give and record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the Commissioner and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in Law. In some cases possibly though rarely, the Commissioner can also show and establish that the facts on record or inferences drawn from facts on record per se justified and mandated further enquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under section 263. In such matters, to remand the matter/issue to the Assessing Officer would imply and mean the Commissioner has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question. [Para 16] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he had reservations. The Commissioner in the order has recorded that the consideration receivable was examined by the Assessing Officer but was not properly examined and, therefore, the assessment order is 'erroneous'. The said finding will be correct, if the Commissioner had examined and verified the said transaction himself and given a finding on merits. As held above, a distinction must be drawn in the cases where the Assessing Officer does not conduct an enquiry; as lack of enquiry by itself renders the order being erroneous and prejudicial to the interest of the revenue and cases where the Assessing Officer conducts enquiry but finding recorded is erroneous and which is also prejudicial to the interest of revenue. In latter cases, the Commissioner has to examine the order of the Assessing Officer on merits or the decision taken by the Assessing Officer on merits and then hold and form an opinion on merits that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the revenue. In the second set of cases, the Commissioner cannot direct the Assessing Officer to conduct further enquiry to verify and find out whether the order passed is e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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