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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 ..... espect of payment of ₹ 6,43,406/-, the assessee has filed a copy of bill issued by M/s.Rami Brothers (Labour Contractors) of ₹ 7,91,406/- being the labour charges from soil filling at site and the payment was made by A/c. Payee Cheque for this work. It is noticed that the ld.CIT(A) has correctly mentioned in his finding that Assessing Officer has not established by any cross-verification that the aforesaid bill was bogus. The Assessing Officer has computed the accommodation entries amount at the rate of 0.25% on hypothetical manner without any basis and relevant evidences.CIT(A) has further held that Assessing Officer in the case of entry provider had considered that amount credited in his bank account as value of accommodation entries including one pertaining to the assessee of ₹ 6,43,406/-. The Ld.CIT(A) is also justified in stating that Assessing Officer has neither made any independent enquiry from the suppliers nor allowed any cross-examination of the third party though specifically demanded by the assessee-company and made the additions based on hypothesis, conjectures and suspicion. - Decided against revenue. Disallowance of labour charges for soil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 ₹ 3,96,91,870/-. Assessment u/s.143(3) of the Act was finalized on 24/03/2015 and total income was determined on ₹ 55,61,49,800/- which was reduced to ₹ 4,54,35,860/- after giving appeal effect. Subsequently, the Assessing Officer has received information from ACIT, Central Circle-2(4), Ahmedabad who has assessed the case of Shri Jaymesh Rami, Director of Aayurshi Infraprojects Pvt.Ltd. u/s.153A regarding providing of accommodation entries. The Affidavit of Shri Jayesh Rami was also received by the Assessing Officer, wherein he had admitted that he was engaged in the busin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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 ₹ 6,43,406/- with M/s.Rami Brothers in the FY 2010-11 and that transaction had nothing to do with Shri Jaymesh Rami. However, the Assessing Officer has not agreed with the explanation and objection made by the assessee-company. The Assessing Officer stated that assessee has accepted the fact that it has paid an amount of ₹ 6,43,406/- to Shri Jaymesh Rami and Shri Rami has accepted that he has received some amounts from various parties for providing of accommodation entries and details provided by Shr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - as commission @ 0.25% is without any basis and unsustainable in law. At the 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 ₹ 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 ₹ 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able to be deleted. It is also said that addition based on the statement of third party without affording opportunity of cross examination are also liable to be deleted. In support of these contentions, the Ld. AR has relied upon various decisions as mentioned in the written submission. In the case of Dhakeshwari Cotton Mills Ltd. (1954) 26 ITR 775 (SC), it has been held that though ITO is not fettered by technical rules 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 accommodati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed Affidavit of Shri Jaymesh Rami, wherein he admitted that he was engaged in the business of entry providing on charging of commission @ 0.25 to 0.35 per 100 rupees. On the basis of these information, the Assessing Officer has treated the amount of ₹ 6,43,406/- as commission paid by the assessee-company to Shri Jaymesh Rami for obtaining accommodation entries. The Assessing Officer has treated the commission rate @ 0.25 per 100 rupees and worked out accommodation entries to the amount of ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustified in stating that Assessing Officer has neither made any independent enquiry from the suppliers nor allowed any cross-examination of the third party though specifically demanded by the assessee-company and made the additions based on hypothesis, conjectures and suspicion. 8.2. In the light of the above facts and considering the detailed finding of the Ld.CIT(A), we do not find any infirmity in the decision of the ld.CIT(A), therefore both the grounds of appeal of the Revenue stand dismissed. 9. Now we take up the assessee s appeal in ITA No.2061/Ahd/2012 for AY 2012-13. 10. In this appeal, the assessee has listed the solitary ground of appeal in disallowing the expenditure of ₹ 7,91,406/- stating that the disallowance was erroneous in facts and law as no such expenditure was claimed during the year under consideration. 11. Without 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 ₹ 7,91,406/- on the basis of invoice placed on record in respect of labour charges for soil filling from M/s.Rami Brothe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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