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TMI Blog2021 (12) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 37,00,928/- made by the AO u/s 69C of the Act by wrongly holding the purchases made as bogus. 3. That the CIT(APPEALS) has failed to appreciate that no addition u/s 69C could have been validly made in the instant case as the payments made for purchases were fully recorded in the books of accounts maintained in regular course of business and were verifiable from bank account of the assessee as well as the purchase bills and stock registers. 4. That the Id. CIT(APPEALS) has further failed to appreciate that the AO, having not found any defect or discrepancy in the audited accounts of the assesse including trading account, complete stock tally, opening stocks, closing stocks, sales declared etc., ought not to have made any addition only on the basis of suspicion based on alleged statement which too was recorded at the bank of the assesse without providing copy of statement to the assesse and also without providing any opportunity of cross examination. 5. That the appellant craves the right to add, delete, amend any or all grounds of appeal. 3. Representatives of both the sides were heard at length. Case record carefully perused and the relevant decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. to substantiate his claim that the purchases made by the assessee from party were genuine and not in the nature of accommodation entries. The reply of the assessee did not find any favour with the AO who concluded the assessment by making addition of ₹ 37,00928/- u/s. 69C of the Act. 9. The assessee agitated the matter before the CIT(A) but without any success. 10. Before me the counsel for the assessee drew my attention to several decisions of the coordinate Benches on the same facts and pointed out the coordinate Benches have quashed the reassessment order. 11. Per contra the DR strongly supported the findings of the lower authorities. 12. I have given a thoughtful consideration to the orders of the authorities below and have accordingly perused the decision of the coordinate Benches. I find that this Tribunal in ITA no. 1512/Del/2015 was seized identical issues and on identical facts held as under :- Reasons for the belief that the income has escaped assessment in the case of M/s Krishan Lal Gambhir Sons for the assessment year 2006-07 A letter bearing F.No. Addl.CIT/(Hq)/(Coord.)/Accommodation entry/2012- 13/15016 dated 26.03.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various field offices in Delhi. On examining the list of accommodation entries provided by Shri Rakesh Gupta Shri Vishesh Gupta and Shri Navneet Jain Shri Vaibhav Jain pertaining to A.Y. 2006-07. It is noticed that the following accommodation entries have been taken by the assessee namely M/s Krishan Lal Gambhir Sons: S. No. Accommodation entry provided by Name of party to whom Accommodation entry is provided Amount of Accommodation entry 1. Shree Shyam Trading Co. M/s Krishan Lal Gambhir Sons ₹ 4,05,860 2. Vishnu Trading Co. M/s Krishan Lal Gambhir Sons ₹ 3,52,461 Total amount of entries ₹ 7,58,321 Since Sh. Rakesh Gupta Sh. Vishesh Gupta and Sh. Navneet Jain Sh. Vaibhav Jain during the course of assessment proceedings u/s 153A of I.T. Act have admitted that they have given acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sustenance of the addition by the CIT(A) @ 20% of the purchases made by the assessee from Shri Bankey Bihari Trading Co., after hearing the rival submissions and going through the order of the Tribunal, I noted that this Tribunal vide its order dated 28.10.2015 in the case of Unique Metal Industries (supra), deleted similar addition by observing in para 27 as under: 27. As regards the addition of 20% sustained by the ld. CIT(A) I am of the view that since purchases are not bogus the addition on this account cannot be sustained. Even otherwise the addition of 20% on the facts and circumstances is apparently too high. The ld. CIT(A) having held that tax has to be levied on real income and the profit cannot be ascertained without deducting the cost of purchases from the sales as otherwise it amount to levy of tax on gross receipt, she ought to have applied profit rate in this nature of trade. Estimating profit @ 20% by taking into consideration the or visions of section 40A(3) will not lead to determination of correct real income. Section 40A(3) is meant for a different purpose when the assessee has made purchases in cash. This provision cannot be applied in such cases. O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2013. The information provided by the CIT, Central-ll, New Delhi vide his letter dated 19.03.2013 reads as under :- Kindly find enclosed herewith letter dated 13.03.2013 of ACIT, Central Circle-10 duly forwarded by the Addl. CIT, Central Range-IV, along with its enclosures on the subject mentioned above. 2. The assessment of search cases of Sh. Rakesh Gupta, Sh. Vishesh Gupta, Sh. Navneet Jain Sh. Vaibhav Jain are under process with the ACIT, Central Circie- 10. During the assessment proceedings u/s 153A in the aforesaid cases, details regarding accommodation entries given by the above entry providers has been obtained by the A.O. 3. The list of accommodation entry recipients has been obtained from Sh. Rakesh Gupta and Sh. Vishesh Gupta. Hard copy of the list is enclosed as Annexure A, duly signed by Sh. Vishesh Gupta. The list gives the name of the firm which has provided the accommodation entry along with the name and address of the recipients of accommodation entry. 4. Sh. Navneet Jain Sh. Vaibhav Jain has provided accommodation entry through thirty- seven paper entities. The list of the firms giving accommodation entry is enclosed as annexu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as deemed tinpome of the assessees for A.Y. 2006-07 and in the said list, names of the concerns/jifersons who have taken accommodation entries in the shape of bogus purchases in subsequent assessment years were also appearing, including A.Y.2007-08, therefore, this office is of The firm view that these cases also need to be reopened u/s 147 of I.Tax Act. Accordingly, on examining the list of accommodation entries provided by Sh. Rakesh Gupta Sh. Vishesh Gupta and Sh. Navneet Jain Sh. Vaibhav Jain pertaining to A.Y. 2007- OS, it is noticed that the following accommodation entries have been taken by the assessee namely M/s Friya Enterprises in A.Y. 2007-08 and whose territorial jurisdiction lies with this Ward SI. No. Accommodation entry provided by Name of party to whom Accommodation entry is provided Amount of Accommodation entry 1. Shree Bankey Bihari Trading Company M/s Priya Enterprises ₹ 3,69,408/- ..... 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