9911796707
TMI Blog2019 (11) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the Hon'ble ITAT erred in deleting the addition u/s.36(i)(ii) of Rs. 3,28,36,400/, without considering the judgment of Special Bench of the Hon'ble ITAT in the case of Dalal Broacha Stock Broking Pvt. Ltd. v. Addl. CIT, Ranger4(1), Mumbai, 131 ITD 36 (Mumbai) (SB)? 2. Whether on the facts and in circumstance of the case, the order of the Hon'ble ITAT is correct as the Hon'ble ITAT has erred in reducing the addition of bogus purchase to 3% despite the dissimilarities between the bills of purchase submitted by the assessee and those submitted by the vendors to the assessee?" TAX APPEAL No.73 OF 2019: "1. Whether on the facts and in circumstance of the case, the Hon'ble ITAT erred in deleting the addition u/s.36(i)(ii) of Rs. 7,12,65,000/, without considering the judgment of Special Bench of the Hon'ble ITAT in the case of Dalal Broacha Stock Borking Pvt. Ltd. v. Addl. CIT, Range4(1), Mumbai, 131 ITD 36 (Mumbai) (SB)?" TAX APPEAL No.74 OF 2019: "1. Whether on the facts and in circumstance of the case, the Hon'ble ITAT erred in deleting the addition u/s.36(i)(ii) of Rs. 5,38,20,000/, without considering the judgment of Special Bench of the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Nikunt Raval, learned advocate for the appellant, invited the attention of the court to the decision of the ITAT, Mumbai Bench in case of Dalal Broacha Stock Broking (P) Ltd. v. Additional Commissioner of Incometax Range 4(1), Mumbai (supra) to submit that the Tribunal has failed to consider the said decision while deciding the issue in favour of the respondent assessee. It was submitted that, therefore, the matter requires consideration and the appeal deserves to be admitted on this question. 3.5 On the other hand, Mr. J.P. Shah, Senior Advocate, learned counsel for the respondent, invited the attention of the court to the order passed by the Tribunal, to point out that such payment of commission made by the assessee to the Directors since assessment year 200607 was allowed up to assessment year 201011, that is, continuously for a period of five years, whereafter the dispute has been raised. It was submitted that it is a settled legal position that the rule of consistency is required to be followed by the Incometax authorities and that in the absence of any difference in the facts and circumstances of the case for the assessment year under consideration, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cy also supports the case of the assessee as the facts and circumstances of the present case are quite similar and identical in the present assessment year 201112 and it is not the case of the Assessing Officer that there was any difference in the facts and circumstances of the present assessment year as compared to the immediately preceding years. 3.7 At this juncture it may be apposite to refer to the decision of the Supreme Court in the case of Radhasoami Satsang, Saomi Bagh, Agra v. CIT, (1992) 1 SCC 659, wherein has held thus: "13. One of the contentions which the learned senior counsel for the assesseeappellant raised at the hearing was that in the absence of any change in the circumstances, the Revenue should have felt bound by the previous decisions and no attempt should have been made to reopen the question. He relied upon some authorities in support of his stand. A Full Bench of the Madras High Court considered this question in T.M.M. Sankaralinga Nadar & Bros. v. CIT, 4 ITC 226 (Mad) (FB). After dealing with the contention the Full Bench expressed the following opinion: "The principle to be deduced from these two cases is that where the question relating to ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year. 17. On these reasonings in the absence of any material change justifying the Revenue to take a different view of the matter - and if there was no change it was in support of the assessee - we do not think the question should have been reopened and contrary to what had been decided by the Commissioner of Income Tax in the earlier proceedings, a different and contradictory stand should have been taken. We are, therefore, of the view that these appeals should be allowed and the question should be answered in the affirmative, namely, that the Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under Sections 11 and 12 of the Income Tax Act of 1961." [Emphasis supplied] 3.8 Thus, as held by the Supreme Court in the above decision, where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso shown from its books of account that the sale of diamond jewellery shown in the Profit and Loss account could not have been made without the purchases of the polished diamonds. The Commissioner (Appeals) observed that this led to a situation where the suppliers, that is, M/s. A2 Jewels and M/s. Amit Diamonds are proved to be bogus/paper entities providing accommodation entries, whereas the evidence indicates purchase of polished diamonds from the said two parties and the use of the same in the making as well as sale of diamond jewellery. The Commissioner (Appeals) was of the view that the finding of the search of the Investigating Wing, Mumbai as regards entry provider is also an undeniable fact. He further found that the same could be explained from the statement of Bhanvarlal Jain and his associates under section 132(4) of the Act, wherein the whole modus operandi of diamond trade was explained. It was stated that the group's concerns import diamonds on behalf of the cash/grey market operator, who take away the physical stock of imported diamond and the concerns of Bhanvarlal Jain and others end up having fictitious stock. The cash/grey market operators provide funds through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hases is against the principles of sections 68 and 69C of the Act. It was submitted that therefore, the Tribunal was not justified in confirming the order passed by the Commissioner of Income Tax (Appeals) restricting the bogus purchases to 3% only. It was, accordingly, urged that the matter requires consideration. 4.4 On the other hand, Mr. J.P. Shah, learned counsel for the respondent, submitted that after duly considering the facts of the case, the Tribunal has restricted the addition to 3%. It was submitted that the percentage of addition is a matter of estimation, which does not give rise to any question of law. It was also submitted that it is an admitted position that the respondent assessee has shown sale of diamond jewellery manufactured from diamonds stated to have been purchased from M/s. Amit Diamonds and M/s. A2 Jewels. The Assessing Officer has found that M/s. A2 Jewels and M/s. Amit Diamonds were bogus entities. However, as rightly held by the Commissioner (Appeals), though the two entities were found to be bogus, the assessee had, in fact, purchased diamonds which were used for the purpose of making diamond jewellery and therefore, the sale of such diamond jeweller ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise, whether the estimate should be at a particular sum or at a different sum, can never be an issue of law. 4.8 This court is in agreement with the concurrent findings recorded by the Tribunal and the Commissioner (Appeals), namely, that the assessee had shown purchases as well as sales. If the sales were accepted, the Assessing Officer could not have rejected the purchases. Once the purchases are accepted, the difference between the inflated and actual price of purchases would be required to be disallowed and as to what would be the extent of difference would be a matter of estimate. 4.9 In the present case, the Commissioner (Appeals) has estimated this difference at 3% of the bogus purchases and the Tribunal has accepted the same. As has been held by this court in Sanjay Oilcake Industries v. Commissioner of Incometax (supra), whether an estimate should be at a particular sum or at a different sum can never be an issue of law. Under the circumstances, this ground of appeal also does not give rise to a question of law, much less, a substantial question of law. 5. Insofar as questions No.2 and 3 of Tax Appeal No.74 of 2019 are concerned, the learned counsel for the Revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
