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TMI Blog2020 (11) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee for the AY 2011-12 was taken up as the lead case and the decision rendered thereon would apply with equal force for AY 2014-15 , except with variance in figures. 3. The ground No. (i) raised by the assesee challenging the validity of reassessment was stated to be not pressed by the Ld. AR at time of hearing. Accordingly, the same is reckoned as a statement made from the Bar and is hereby dismissed as not pressed. 4. Though, the assesee has raised several sub grounds in main ground (ii), we find the effective issue involved herein is as to whether the Ld. CIT(A) was justified in confirming the addition of Rs. 79,60,882/- made on account of alleged bogus purchases in the facts and circumstances of the instant case. 5. We have heard the rival submissions and perused the materials available on record. We find that the assesee is a company engaged in the business of manufacturing and export of diamond studded, gold and platinum jewellery. The original return of income was filed by the assesee for AY 2011-12 on 15/09/2011 declaring total income of Rs. 38,38,470/-, which was duly processed u/s 143(1) of the Act. The assessment u/s 143(3) of the Act was completed by the Ld. AO on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with any of the concerns of Bhanwarlal Jain group. Hence, it can be safely concluded that in the entire order of the Ld. CIT(A), nothing was pointed out qua the assessee in the modus operandi adopted by Bhanwarlal Jain Group through his various concerns. We find that before the Ld. CIT(A), the assessee had also filed additional evidences comprising of purchase bills, confirmation of accounts, bank statements, financial statements etc., of the various concerns run and managed by shri Bhanwarlal Jain, which has been recorded in para 10.61, page 101 of the order of the Ld. CIT(A). But we find that the Ld. CIT(A) had simply disregarded these additional evidences by stating that such documents and extracts supplied and confirmed by a certified entry operator has no evidentiary value and hence needs to be rejected on merits. Thereafter, we find that the Ld. CIT(A) ignoring the various primary documents such as purchase bills, bank statements, stock register, affidavits and confirmations from the suppliers etc., proceeded to reject the books of accounts of the assessee u/s 145(3) of the Act and upheld the addition made @100% value of purchases in the sum of Rs. 79,60,882/-. While uphol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... give bogus bills. The AO appears to have received information in this case from the investigating wing. It is clear that this information was about the bogus sales made and accommodation entry given by one Sh. Bhanwar Lal Jain. The A.O. seems to have received this information in general and not specifically in the context of the appellant. He had confronted the appellant by means of show-cause notice and asked for production of the concerned parties to establish genuineness of these purchases. As the appellant was unable to produce them, the A.O. simply went ahead and made the addition. 5.4 It is clear that the AO had insisted on production of these parties. The A.O. had however relied upon the information received from investigation wing and the statement of Sh. Bhanwarlal Jain. As such, he was bound to provide an opportunity to the appellant to cross examine this party. While the assessment order is silent on this matter, the appellant has forcefully brought this point out during its submission. In other words, the non- production of this party would not just be an issue against the appellant. It would actually strengthen the claim of the appellant as well. 5.5 It is noted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by five parties for the assessment year 2012-13, confirming that they are tax payers. I) Copy of Audited Balance Sheet, Profit And Loss with Schedules thereto, of five parties showing transactions with assessee and amount recoverable from assessee for assessment year 2012-13. J) Customs certified invoices. confirming exports of Cut & Polished Diamonds studded Jewellery to various parties outside India. K) Customs partywise stock statement/register of cut and polished diamonds studded Jewellery, which was exported. L) Retraction statement of Shri Bhanwarlal Jain along with claim that F statement recorded during search and seizure action, loses its evidentiary value. These evidences clearly establish that the assessee had made genuine purchases for which payments were made through banking channels and exports proceeds of part these diamonds during the year were also received through banking channels and the remaining were reflected in the closing stock summary. These evidences strongly support the case of assessee that there were genuine purchases made by assessee, which could not negated by the general statement of Sh. Bhanwarlal Jain which has since be retracted. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the third party. Moreover, the person whose statement was relied upon by the assessee has retracted from his statement made during the survey action. The documentary evidence on record fully substantiates the contention of the assessee. Hence, there is merit in the contention of the Ld. counsel. On the other hand the AO has not pointed out any cogent evidence to falsify the contention of the assessee. The Hon'ble Bombay High Court in CIT Vs. Nikunj Eximp Enterprises Pvt. Ltd. 372 ITR 619 (Bom) has held that merely because the suppliers had not appeared before the Assessing Officer or the CIT (A) one could not conclude that the purchases were not made by the respondent/assessee. In the Light of the facts of the present case and the evidence on record, we are of the considered view that the findings of the Ld. CIT(A) are based on the principles of law laid down by the Hon'ble Bombay High Court and in accordance with the various decisions of the Tribunals relied upon by the Ld. CIT(A), therefore do not suffer from any infirmity either factual or legal to interfere with. Thus the Ld. CIT(A) has rightly deleted the addition in question. Hence, we uphold the findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the same fact is established by the Assessing Officer, then is it mandatory for the Assessing Officer to limit himself to the mere submission and other documents provided by the assessee even though the purchases are non-genuine ? (C) Whether on the facts and in the circumstances of the case and in law, Tribunal was justified in holding that while applying the provisions of Section 69C of the Income Tax Act, 1961, the Assessing Officer was required to cause further enquiries in the mater to ascertain the genuineness or otherwise of the sham transaction?" In the said case, both the ld CITA as well as the Tribunal had concurrently held that all the primary documents were duly placed on record including the quantitative details of purchases and corresponding sales together with stock register, confirmations from suppliers etc and hence no addition could be merely made u/s 69C of the Act by placing reliance on the statements made by some suppliers and parties before the Sales tax department. We find that the Hon'ble Jurisidictional High Court had agreed with the views expressed by both the CITA as well as the Tribunal in the aforesaid case. We find that the facts before us in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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