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TMI Blog2021 (3) TMI 469X X X X Extracts X X X X X X X X Extracts X X X X ..... and in the circumstances of the case and in law, the Ld.CIT(A) erred in deleting the addition of Rs. 3,86,04,360/- which was made on account of estimation of accommodation entries at Rs. 25,73,62,400/- and thereafter restricting the addition to 15% of such estimate amounting to Rs. 3,86,04,360/-, without appreciating the findings that the assessee has accepted to have make payment of Rs. 6,43,406/- to Mr. Rami and Mr.Rami has also accepted payment for accommodation entries from various parties. 2. On the facts and in the circumstances of the case and in law, the Ld.CIT(A) failed to appreciate that the decision of the AO is based on binding decision of Hon'ble Gujarat High Court in the case of M/s.Vijay Protien Ltd. vs. CIT 58 Taxmann.com 344 [2015] as well as the decisions of Hon'ble jurisdictional ITAT in the cases of Pavankumar M.Sanghvi v. ITO Ward- 5(1), Baroda and in the case of ACIT, Circle-4, Surat vs. Sunday Exports Ltd. 3. The facts in brief are that the assessee-company has filed its return of income on 30/09/2012 declaring total income at Rs. 3,96,91,870/-. Assessment u/s.143(3) of the Act was finalized on 24/03/2015 and total income was determined on Rs. 55,61,49,80 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided. 2) The copy of statement recorded by the authorities concerning the assessee. 3) Copy of Affidavit. 4) Any other communication made in this regard. However, vide letter dated 14/10/2016, the Assessing Officer has supplied only the following documents. 1) The copy of statement of Shri.Jaymesh R.Rami 2) The copy of Affidavit of Shri Jaymesh R.Rami. However, the assessee was allowed to make inspection of the record received from ACIT, Central Circle-2(4), Ahmedabad. Thereafter, the assessee has made submission of 28/10/2016 stating that it has not entered any transaction of obtaining accommodation entries as alleged on the basis of the statement of Shri Jaymesh Rami furnished to the assessee vide letter dated 14/10/2016. It was also explained that in the Affidavit Shri Jaymesh Rami has stated of providing accommodation entries to several parties but in the list of parties name of the assessee was not reflected. Even in the Affidavit also, nothing was mentioned about transaction with the assessee-company. However, the assessee-company had transaction amounting to Rs. 6,43,406/- with M/s.Rami Brothers in the FY 2010-11 and that transaction had nothing to do with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.9, had given the list of entities to whom accommodation entries were provided which are as under: I. M/s. Kesar Buildcon Pvt. Ltd. II. M/s. Infinity Comptrade Pvt. Ltd. III. M/s. Entire Ceramics IV. M/s. Sampati Securities V. M/s. Prime Commodities VI. Jolly Anureet Kaur VII. M/s. Profile Biochemical Pvt. Ltd. VIII.M/s. B.B. Tradelink Pvt. Ltd. IX. M/s. Rishabh Probuild Pvt. Ltd. X. M/s. Sanskruti Megastructure Pvt. Ltd. : He has also submitted affidavit dated 11.03.2015, contents of which are reproduced as under: "I the undersigned JAYMESH R RAMI, Hindu, adult, present communication address at 35/252, Vandan Apartment Nr. Ankur Cross Road, Haranpura, Ahmedabad-380013 do hereby solemnly affirm on oath that I was involved in the business as well as engaged in providing accommodative entries during FY 2010-11, FY 2011-12 and FY 2012- 13 relevant to AY 2011-12, AY2012-13 and AY 2013-14. Separate submission with regard to papers/documents/accounts was given on 09- 03-2015 along with the submission. In this business of entry provider, rate of commission is ranging from 0.25 paisa to 0.35 paisa per 100 rupees and out of that minimum expenses incurred is about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost of repetition, it is worthwhile to mention here again that the AO could not find even a single instance of purchase from the entities run by Shri Jaymesh R Rami except for an entry of Rs. 7,91,406/-. The Ld. AR has heavily argued that even a survey u/s 133A was carried out in the case of the appellant on 10.12.2014 and no evidence of bogus purchase/accommodation entries was found. On the basis of survey action, assessment u/s 143(3) in the year under consideration was completed on 24.03.2015/27.03.2015. A perusal of the assessment order reveals that there was no iota of evidence regarding accommodation entries and bogus purchases. 4.2.2. The Ld. AR has also pointed out that the AO had allowed him inspection of documents received from ACIT, Central Circle-2(4), Ahmedabad, on 21.10.2016 and there is no adverse material against the appellant except for an entry of Rs. 6,43,406/- at sr. No. 39 of the chart containing names of 69 persons. In order to verify the contentions of the Ld. AR, I have obtained complete report of ACIT, Central Circle-2(4), Ahmedabad dated 08.06.2015 which was the basis for re-opening and additions made. As a matter of fact, on the basis of entries found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of evidence and pleadings and he is entitled to act on material which may not be accepted as evidence on account of law, but in making assessment, he is not entitled to make a pure guess and pass assessment order without reference to any evidence or any material at all. This decision has been followed in various cases and hence still holds good. The ratio laid by the Hon'ble Supreme Court, thus favourably supports the case of the appellant. ; 4.2.4. In view of the above factual and legal position, thus, it emerges that the AO has estimated value of accommodation entries devoid of any documentary evidences or material and hence, the same cannot be sustained. Consequently, the addition made on this account by disallowing 15% of such estimated accommodation entries again on adhoc basis also deserves to be deleted. Accordingly, the addition made by the AO having no legs to stand is directed to be deleted. However, undoubtedly, the appellant has made a payment of Rs. 6,43,406/- in respect of purchase of services of soil filling from Shri Jaymesh R Rami amounting to Rs. 7,91,406/- which certainly should be treated as accommodation entry. Accordingly, the AO is directed to make th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n entries to the amount of Rs. 25,73,62,400/- (6,43,406*100/0.25). The assessee-company has submitted that it has never had any business with the companies named by Shri Rami As in his statement Shri Jaymesh Rami has stated that he was Director of the five companies which were engaged in the business of providing entry and the assessee has not any transaction with those companies. The list of those five companies discussed in the order of the CIT(A) are as under:- "Sr No. Name of the Company Address 1 M/s. Krutarth Projects Pvt.Ltd. 35-252, Vandan Apartment Ankur Road, Naranpura, Ahmedabad 2 M/s.Alton Infrastructure Pvt.Ltd. 2515, Sadumata ni Pole, Shahpur, Ahmedabad 380001 3 M/s.Disharth Infraprojects Pvt.Ltd. 2646-3, Gamala ni Pole, Nr. Hakim ni Khadki, Shahpur Ahmedabad 380 001 4 M/s Aayurshi Infraprojects Pvt.Ltd. 35-252, Vandan Apartment, Ankur road, Naranpura, Ahmedabad 5 M/s.Kalgi Marketing Pvt.Ltd. D-5, Kiran Nagar, Govt.Quarters, O/s. Shahpur, Ahmedabad 380 001" 8.1. Further, we have noticed in the detailed finding given by the Ld.CIT(A) that Shri Jaymesh R.Rami had also given the list of entities to whom he has provided accommodation entries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reiterating the facts as elaborated while adjudicating the appeal of the Revenue, i.e. ITA No.2040/Ahd/2018 for AY 2012-13 (supra), it is noticed that Ld.CIT(A) has restricted the addition to the extent of Rs. 7,91,406/- on the basis of invoice placed on record in respect of labour charges for soil filling from M/s.Rami Brothers. However, on perusal of the bill, it is noticed that this bill was raised on 07/03/2011 pertaining to FY 2010-11 which clearly demonstrates that this expenditure was not claimed during the year under consideration. However, it is noticed that in his finding the Ld.CIT(A) has concluded that AO of the Central Circle-2(4), Ahmedabad has considered the amount credited in the bank account of Shri Rami as value of accommodation entries. Since in the case of the assessee the payment of Rs. 6,43,406/- was considered as accommodation entries and it is noticed that assessee has not reconciled this payment with outstanding amount of Rs. 7,91,406/- as per invoice raised for labour charges, therefore we restrict the disallowance to the extent of Rs. 6,43,406/-. Thus, this ground of appeal of the assessee is partly allowed. 12. In the combined result, appeal of the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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