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TMI Blog2018 (10) TMI 1741X X X X Extracts X X X X X X X X Extracts X X X X ..... formation that one Shri. Bhanwarlal Jain alongwith Shri. Rajan Bhanwarlal Jain and Shri. Manesh Bahnwarial Jain were running a number of dummy concerns and companies, which were controlled by them and such concerns/companies were providing accommodation entries in the nature of loans, advances and sales to various parties, against commission. It seems Investigation Wing of the Department examined the directors/partners/ proprietors of such concerns and companies controlled by Bhanwarlal Jain and family. As per the Investigation Wing bank accounts of these concerns were managed by Shri. Bhanwarlal Jain, Shri. Rajan Bhanwarlal Jain and Shri. Manesh Bahnwarial Jain. Further, as per such reports, evidence coming out of the records proved that the above group was providing accommodation entries in the nature of bogus purchases and bogus loans through seventy benami concerns. It seems such benami concerns included one M/s. Mohit Enterprises, M/s. Maan Diamonds, M/s.Rajan Diamonds and M/s. Marvin Enterprises which were all located in Surat. Assessee M/s. VBC Jewellery had claimed purchases of E 3,90,780/- from M/s. Rajan Diamonds during the previous year relevant to assessment year 200708 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by him unverifiable purchases. Apart from this, ld. Assessing Officer also made an addition u/s.69C of the Income Tax Act, 1961 (in short ''the Act'') estimating a commission of Rs. 5,000/- to have been paid for each of the accommodation bill. Summary of the additions made for the impugned assessment years were as under:- ITA Assessee A.Y. Purchases disbelieved Addition of 25% Addition for commission u/s.69C 653/CHNY/17 VBC Jewellery 2009-10 M/s. Mohit Enterprises, Surat Rs. 19,58,551/- 4,89,638/- 10,000/- 654/CHNY/17 VBC Jewellery 2011-12 M/s. Maan Diamonds, Surat, Rs. 23,42,050/- 5,85,513/- 5,000/- 1465/CHNY/17 VBC Jewellery 2008-09 M/s. Mohit Enterprises, Surat Rs. 6,52,300/- 1,63,075/- 5,000/- 1464/CHNY/17 VBC Jewellery 2007-08 M/s. Rajan Diamonds, Surat Rs. 3,90,780/- 97,695/- 5,000/- 655/CHNY/17 VBC Jewellers 2009-10 M/s. Marvin Enterprises, Surat Rs. 2,72,320/- 68,080 5,000/- 6. Aggrieved, both the assessees moved in appeal before ld. Commissioner of Income Tax (Appeals). Ld. Commissioner of Income Tax (Appeals) however confirmed the addition made by the ld. Assessing Officer observing that there were mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, having not taken the steps subsequent to issue of notice u/s.133(6) of the Act, disallowance of purchases and additions made on presumptions could not be upheld. Reliance was also placed on a decision of Mumbai Bench of the Tribunal in the case of M/s. Ralf Jems Pvt. Ltd vs. ITO (ITA Nos.3707 and 3761 /Mum/2016, dated 11.12.2017). As per the ld. Authorised Representative in the case considered by the Mumbai Bench, addition was based on a search conducted in the very same M/s. Bhanwarlal Jain Group, for alleged accommodation entries. Contention of the ld. Authorised Representative was that sales having not been doubted, purchases could not have been disbelieved. According to him, Mumbai Bench in the case of M/s. Ralf Jems Pvt. Ltd (supra) had held that 6% disallowances of alleged bogus purchases done by ld. Commissioner of Income Tax (Appeals) was appropriate. 8. Viz-a-viz, commission payment, ld. Authorised Representative submitted that there was no claim made by the assessee for any commission. Addition was made, according to him purely based on presumption. In any case, according to him, only the profit margin embedded in the alleged bogus purchase could be considered for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions from them. Hence, we cannot say that assessee had made all necessary efforts for proving the purchases claimed to have been made from the parties mentioned in the table above, beyond preponderance of probability. A similar case, where an addition was made disbelieving purchases, based on search operations conducted in M/s. Bhanwarlal Jain Group, had come up before the Mumbai Bench of the Tribunal in ITA Nos.3707 & 3761/Mum/2016, dated 11.12.2017). What was held by the Mumbai Bench at paras 9 & 10 are reproduced hereunder:- ''9. We have heard both the counsel and perused the record. As regards the reopening, we find the Commissioner of Income Tax (Appeals) has passed an apposite order. The reopening has been done on the basis of cogent information regarding the assessee dealing with hawala operators. The case laws referred by the Commissioner of Income Tax (Appeals) are germane and support the validity of reopening in this case. 10. As regards the merits of the case, facts of the case indicate that the assessee has engaged into obtaining bogus purchase bills. Since, sales have not been doubted; entire disallowance of purchase is not sustainable in light of Hon'ble jur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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