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TMI Blog2022 (5) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... close fully and truly all the material facts, reopening is justified. Thus, considering the above law, coupled with facts of this case, we affirm the action initiated under Section 147 of the Act. In the result, ground No. 1 2 of the appeal is dismissed. Bogus purchases - The assessee has shown gross profit at 3.42% and net profit at 1.98%, thus the assessee was shown an extremely low profit. The combination of this bench in other similar cases wherein the purchases are shown from Bhanwarlal Jain or Rajendra Jain or Gautam Jain group have restricted or enhanced the addition to the extent of 6% of such amount or disputed purchases. Therefore, taking a consistent view, the disallowance which was confirmed to the extent of 100% by learned CIT(A) are restricted to 6% of the impugned purchases - grounds of appeal raised by the assessee are partly allowed. - ITA No. 473 And 474/SRT/2018 - - - Dated:- 17-5-2022 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Department : Ms. Anupma Singla, Sr.DR For the Assessee : Shri Sapnesh Sheth, CA ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (Investigation) Mumbai that a search action was carried out on Bhanwarlal Jain and his group wherein it was found that Bhanwarlal Jain group was providing accommodation entries in the garb of sale bills, purchase bills and secured loans in the name of various proprietary concerned and companies. The assessee is one of the beneficiary who had shown non-genuine transactions of Rs. 21,64,085 from M/s Nice Diamonds. M/s Nice Diamonds is managed by Bhanwarlal Jain and his group. On the basis of such information, the Assessing Officer recorded reasons that income to the extent of non-genuine transaction of Rs. 21,64,085 has escaped from assessment. Accordingly, notice under Section 148 of the Act was issued on 28/03/2014 and served upon the assessee be speed post. The assessee was provided the reasons recorded vide letter dated 07/07/2014. Opportunity was given to the assessee for filing the return of income after issuing the notice under Section 147 of the Act. Another opportunity was provided to the assessee to furnish requisite details vide office letter dated 28/01/2015. In response to letter dated 10/03/2015, the authorized representative of the assessee vide his letter dated 11/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer accepted that assessee is a manufacturer of polished diamond for the purpose of local sales and export of polished diamonds.The ld. A.R. further submitted that there is no material on record that assessee has given any commission to any of the person for obtaining bogus bills. It is a true fact that any search action was carried out in case of M/s Nice Diamonds during which any evidence relating to providing of such bogus bills to assessee was found. The whole process of reopening of assessment u/s 147 is based only on the statement of Shri Bhanwarlal Jain and group. However, assessee has made purchases and sales in the normal course of business and also maintained proper stock register. The sales of the assessee were not disputed by the assessing officer. No sale is possible in absence of purchases. Thus, entire additions are liable to be deleted. 6. In the alternative submissions, the ld AR for the assessee submits that even if it is presumed that the purchases are suspicious for the reasons that the seller party was related with bogus entry provider, in such circumstances only profit element minus gross profit declared by assessee on such purchases is to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r had received report of the Investigation Wing, Mumbai that the assessee was beneficiary of accommodation entry operators. Before us the ld AR for the assessee has not made specific submissions in challenging the reopening except making general submissions that no notice of reopening was received. We find that otherwise the issue of reopening is against the assessee by the decision of Jurisdictional High Court in Priya Blue Industries (P) Ltd Vs ACIT (2021) 130 taxmann.com 492 (Gujarat), wherein the High Court held that where the assessing officer has reason to believe that income chargeable to tax had escaped assessment as the assessee was beneficiary of accommodation entries and basis of belief were several inquiries and investigation by investigation wing that there had been escapement of income of assessee from assessment because of his failure to disclose fully and truly all the material facts, reopening is justified. Thus, considering the above law, coupled with facts of this case, we affirm the action initiated under Section 147 of the Act. In the result, ground No. 1 2 of the appeal is dismissed. 9. Now adverting to the merits of grounds of appeal which relates to conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in reopening assessment by issuing notice u/s 148 of the I.T. Act, 1961. 2. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in passing the ex parte order u/s 144 of the I.t. Act, 1961. 3. On the facts and circumstances of the case as well as law on the subject, the learned Commissioner of Income Tax (Appeals) has erred in confirming the action of assessing officer in disallowing entire purchases made from M/s Nice Diamonds, M/s Millennium Starts M/s Euro Diam totaling to Rs.3,88,74,816/-. 4. It is therefore, prayed that above the assessment order may kindly be quashed or in the alternative, additions made by assessing officer and confirmed by Commissioner of Income Tax (Appeals) may please be deleted. 5. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal. 12.Since the facts and circumstances of the case as well as submissions of both the partie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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