9911796707
TMI Blog2024 (7) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... gment and Order dated 21.12.2023 passed by the Income-Tax Appellate Tribunal, Surat (for short the Tribunal ) in ITA No. 520/SRT/2023 for Assessment Year 2017-18 : A. Whether on the facts and circumstances of the case and in law, the Hon ble ITAT has justified in agreement with the view of Ld. CIT(A) in this case without appreciating the facts that the assessee has failed to prove the genuineness of transaction made with M/s.Dhaval Gems and M/s.Veer Corporation which were identified as bogus entry providers, completely controlled by Shri Chetan Kantilal Shah ? B. Whether on the facts and circumstances of the case and in law, the Hon ble ITAT has justified in restricting the addition from 100% to 13.05% of the bogus purchases made by the AO ignoring the fact that Shri Chetan K. Shah has admitted in his statement u/s.131(1A) given during the survey proceedings conducted by the investigating wing of department that he has engaged in the business of accommodation entries and hence AO was correct in concluding that the assessee was a beneficiary of the accommodation entry in guise of purchase? 2. Heard learned Senior Standing Counsel Mr. Karan Sanghani for learned advocate Mrs. Kalpana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e financial statements. The assessing officer has also not provided any adverse finding on inventory appearing in the books of account of the assessee. However, ld CIT(A) noted that in absence of visibility on correctness of the amount paid/ payable to creditors, the possibility of purchasing the goods from grey market at lower rates and recording the same at inflated price in books of accounts cannot be ruled out. However, if the entire purchases are disallowed, the corresponding sales also need to be ignored but the assessing officer has not done so. Therefore, this leaves with unjustified adjustment in case of the assessee. Therefore, ld CIT(A) noted that many high courts and tribunals have dealt with this issue of bogus purchases in greater details and have upheld that certain gross profit shall be added to total income instead of adding entire purchases (especially when corresponding sales are not challenged) . 11. The assessee has also submitted before ld CIT(A) that the entire amount should not be treated as bogus and reasonable gross profit at the rate of 5% shall be added to the total income of assessee in wake of various judicial precedence pronounced by ITAT. However, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... most of the customers pay the bills in cash. The receipts and accumulation of cash on hand, as per accounts, is quite obvious and the same ought to be accepted more particularly when books of accounts are not rejected. The quantum of sales depends on marriage / Diwali and such auspicious days. If we look into the monthly sales lying on page 34 of the paper book, there was huge sales in April, 2016 and September, 2016 though there was less sale during demonetization. The assessee had cash on hand of Rs. 61,19,899/- as per the cash book on 29.09.2016 and the same was further increased to Rs. 83,03,182/- on 08.11.2016. The assessee had sufficient cash on hand of Rs. 83,03,182/- on 08.11.2016 out of which Rs. 80/- lacs were deposited during the demonetization period. The assessee used to maintain quantity details/ account and the same was filed alongwith tax audit report which lies on page 31 to 33 of the paper book. We note that assessee has already covered huge amount of Rs. 1.10 crores under PMGKY scheme against the doubtful transactions. The assessee urges that the said disclosure covers all the irregularities and, therefore, further addition of Rs. 80/- lacs being the amount of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tative details of stock as well as details of goods/ornaments which are claimed to be sold against cash sales. The Assessee was requested to furnish comparative figures of cash deposited in its bank accounts in reference to the period under consideration as well as for the immediately preceding year. The assessee has cash balance of Rs. 59,553/- only and has shown cash balance of Rs. 83,02,552/-on 08/11/2016. The assessee could not sources of credits in the cash book. Therefore, in absence of any concrete details or evidences with respect to the so-claimed cash sales/cash deposits made by the Assessee, the same cannot be accepted. It has to be construed that the Assessee has not been able to substantiate with cogent details and evidences, the genuineness of its claim with respect to cash deposits amounting to Rs. 80,00,000/- and therefore, this amount requires to be brought within the ambit of taxation. 2.4 2.4 The Assessee had deposited cash amounting to Rs. 80,00,000/- (a part form amount disclosed in PMGKY) in its bank accounts maintained with ICICI Bank Ltd. during the Demonetization period (09/11/2016 to 30/12/2016). Repeated notices have been issued to the Assessee however, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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