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TMI Blog2022 (3) TMI 1384X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. Assessing Officer is bad in law as the conditions laid down under the Act for initiating reassessment proceeding u/s 147 of the Act have not been fulfilled. 2. On the fact and circumstances of the case and in law the Ld. CIT (A) erred in estimating an addition of Rs.2,71,98,014/- (being 10.31% of Rs. 26,38,02,270/-) by allegedly treating genuine turnover made by the appellant, as bogus sales. 3. On the fact and circumstances of the case and in law the Ld. CIT (A) erred in making an addition of Rs. 2,71,98,014/- without appreciating the fact that the appellant is a trader and the quantity tally of goods, submitted in the Tax Audit Report u/s 44AB of the Act and also to the Ld. A.O. in the course of reassessment proceedings, compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns for reopening of the assessment. The reassessment u/s 143(3) r.w.s 147 of the Income Tax Act, 1961 (in short 'the Act') was completed on 27.11.2019, wherein the A.O made two additions to the returned income. The first addition is in respect of the commission income amounting to Rs.14,94,462/- on protective basis. Accordingly to the assessing officer "Shri Bhanwarlal Jain" has used this concern for providing accommodation entry transaction and therefore, substantive addition of earning commission from accommodation entries was made in the case of Shri Bhanwarlal Jain and only protective addition has been made in the case of the assessee. The second addition made by the A.O is in respect of gross profit amounting to Rs.2,71,98,014/- on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and the above entity is only an associate. Hence, the commission income earned by the entity mentioned above has to be added in A.Y. 2015-16 and has thus escaped assessment within the meaning of section 147 of the Income Tax Act, 1961, which is attributable to failure on the part of the assessee to make full and true disclosure in the return of Income." 6.1 Further, the A.O in his detailed finding from para 6 to 12 also had the assessee concern as managed and controlled by Shri Bhanwarlal Jain for giving accommodation entry of bogus unsecured loan, bogus purchase business sales etc. and following the finding in the case Shri Bhanwarlal Jain, the A.O made addition of the undisclosed commision income of Rs.14,94,462/- on protective basis. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required to be added is Rs.14,94,462/-. However, it is observed that the undisclosed commission of Rs.14,94,462/-is added on substantive basis in the case of Shri Bhanwarlal Jain for AY 2015-16. Hence, to protect the interests of Revenue and following principles of Natural justice. Rs.14,94,462/-is hereby added in the hands of the assessee on protective basis. Penalty proceedings u/s 271(l)(b) & 27l(l)(c) of the I.T Act are initiated separately for filing of inaccurate particulars of income." 7. We find that this addition made by the A.O has been deleted by the ld. CIT(A) and revenue is not in appeal against the said deletion. 8. However, the A.O has made another addition on the ground that gross profit rate declared by the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances, the lower authorities are not justified in sustaining the addition to cover the low gross profit rate on the basis of books of account of the assessee which has not been accepted by the department and percentage commission has been assessed treating the purchase and sales recorded in books of accounts. Similarly commission income has also been estimated on the unsecured loan advanced by the assessee also. We have noted that in the case of Bhanwarlal Jain, the department has taken stand that accommodation entries have been provided through the assessee concern. The revenue has to take one stand and cannot treat the assessee simultaneously as accommodation entry provider as well as genuine concern engaged in trading of the diamond. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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