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TMI Blog2024 (12) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... age is not tenable. Estimation of income on bogus purchases - Both the CIT (Appeals) and the Tribunal has given cogent reasons for making addition on estimate basis at 5% by the CIT (Appeals) which was increased to 6% by the Tribunal and such estimated addition is confirmed by this Court arrived at by the fact finding authority being CIT (Appeal) and Tribunal, in such circumstances, we are in agreement with the decision rendered. Addition of 6% of the purchases on estimate basis arrived at by the Tribunal and the Tax Appeals preferred by the Revenue are also dismissed by this Court in number of similarly situated assessees. Therefore, in order to maintain the consistency of addition of 6% in cases of the assessees who have been found taking accommodation entries during the course of search in case of Pravinkumar Jain Group/Bhavarlal Jain Group, no interference is required to be made in the impugned order. - HONOURABLE MR. JUSTICE BHARGAV D. KARIA AND HONOURABLE MR. JUSTICE D.N.RAY Appearance: For the Appellant(s) No. 1: Mr. Pruthviraj Y Gohil (13166). For the Respondent: None. COMMON ORAL ORDER (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) Heard learned advocate Mr. Shrey Lodha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw the Hon'ble Tribunal erred in confirming addition to the tune of 6% of the alleged purchases as against the comparable margin where books of accounts are rejected? (e) Whether in the facts and circumstances of the case and in law, Section 153C of the Income Tax Act, 1961 supersedes Sections 147, 148, and 149 of the Income Tax Act, 1961? (f) Whether in the facts and circumstances of the case and in law, the time limit prescribed in Section 153 of the Income Tax Act, 1961 vis- -vis completion of assessment under Section 143 of the Income Tax Act, 1961 mandatory? (g) Whether in the facts and circumstances of the case and in law, the Ld. Tribunal erred in not appreciating that owing to violation of principles of natural justice in the instant case, any addition to the total income of the Appellant is unsustainable in the eyes of law? (h) Whether in the facts and circumstances of the case and in law, the Ld. Tribunal was justified in not appreciating that denial of opportunity to cross-examine the persons whose statements recorded u/s. 132 (4) of the Act have been relied upon by Respondent despite a specific request thereto by the Appellant renders the assessment order dated 21.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as bogus purchases. The contention of each of the appellants-assessees was considered by the Assessing Officer and on the basis of the report of the Investigation Wing, it was held that during the search and seizure action, which was conclusive evidence in case of Pravin Kumar Jain and his Group that was engaged in the business of providing accommodation entries and considering the modus-operandi revealed during the course of search, the addition was made in the hands of the each of the assessees by dis-allowing the entire purchases shown from the entities managed by the Pravin Kumar Jain Group. 5.4. Being aggrieved, the appellants-assessees preferred the Appeal before the CIT(Appeals) challenging the validity of the reopening of assessment as well as the addition made on merit. Detailed written submissions were also filed before the CIT (Appeals). The CIT (Appeals) considering the confirmation and ledger accounts of the suppliers, purchase bills, corresponding sale invoices etc., called for the remand report from the Assessing Officer. After considering the remand report, the CIT (Appeals) relied upon the similar orders passed by its predecessors with regard to the validity of re- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecific submission was made by either of the parties for admission or non-admission of additional ground of appeal. It is the settled law that additional ground of appeal may be admitted by the Appellate Authorities if no new facts are required to be brought on record and that the facts related to additional ground of appeal are emanating from the orders of the lower authorities. We find that the assessee has raised first additional ground of appeal that assessee's statement was recorded on oath and material found during the survey under section 133A of the Act revealed that assessee was engaged in proving accommodation bills. We find that there is no such fact that in the assessment order, or in the order of First Appellate Authority. However, we find that Ld. AR of the assessee is trying to bring this fact on the basis of survey conducted at the premises of Jitendra Kumar Jain and the Assessing Officer of Jitendra Kumar Jain for AY 2007-08 and 2008-09 respectively. We find that this fact referred in case of Jitendra Kumar Jain are not emanating from the order of lower authorities in the present case. Moreover, the stand of assessee, throughout the proceeding before lower autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bringing such fact on the record, which is not permissible under the law. The assessee by filing these documents are taken as diagnosis root, which in our considered view is not permissible. In the result, application for admission of additional evidence is rejected. 5.8. While adjudicating on the main ground of the Appeal raised by the assessees as well as the Revenue, the Tribunal considered the evidence on record and observed as under : The Assessing Officer made re-opening by recording the reasons on the basis information received from Investigation Wing about the syndicate being operated by Pravin Kumar Jain and his group for providing accommodation entry. The Hon'ble jurisdictional High Court in the case of Pass Industrial Engineers Pvt. Ltd. vs. DCIT 77 taxman.com 185 (Guj) held that when the Assessing Officer received information from Investigation Wing, that hawala entry operator provided bogus entries to beneficiary and assessee was one of such beneficiary. The Assessing Officer was justified in re-opening assessment. Considering the decision of Hon'ble jurisdictional High Court in the case of Pass Industrial Engineering Pvt. Ltd. (supra), the ground Nos.1 2 raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rebutted or discarded the material evidence furnished by assessee nor doubted the sales. Further, the Assessing Officer has not made any efforts to find out whether Pravin Kumar Jain is a proprietor / partner or director of the concern from whom the assessee made purchases. The assessee claimed that purchases in quantity are duly entered in the stock register and corresponding sales have been made. It is settled position that sale could not be made in absence of purchases. The Id CIT(A) concluded that the impugned purchases cannot be denied in the quantitative terms. The Ld. CIT(A) held that on identical issue in his earlier order in case of Gagnani Impex for A.Y. 2013-14 Appeal No. CAS-3/512/2015-16 dated 24.11.2016, Ld. CIT(A), he by relying various other decisions of Tribunal restricted the addition to the extent of 5%. The Ld. CIT(A) restricted the addition to the extent of 5% of such disputed / impugned purchases. We also find that the Id. CIT(A) also considered the decision of jurisdictional High Court in Mayank Diamonds Pvt. Ltd. (supra) and compared the fact of the present case with the facts in Mayank Diamonds Pvt Ltd (supra) and noted that assessee in that case was also e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in group and thus bogus transactions were entered into. The Assessing Officer noticed that the appellant received accommodation entry to the tune of Rs. 25.62 crores. 4.2 The appellant preferred appeal against the order of the Assessing Officer. The Commissioner of Income Tax (Appeals) passed order on 30.9.2019 partly allowing the contentions of both the sides. Thereafter, the appellant assessee filed the appeal before the Income Tax Appellate Tribunal, which passed order on 13.4.2022 holding that 6% of the disputed purchase would be sufficient to meet the revenue leakage. The said order is impugned in this proceedings. 5. Learned advocate for the appellant has submitted with reference to the above questions that the impugned order is bad in law as the learned Tribunal did not admit the additional grounds of appeal as well as did not admit the additional evidence submitted under Rule 29 of the Income Tax (Appellate Tribunal) Rules, 1963. Learned advocate for the appellant has further submitted that the Assessing Officer as well as the Commissioner of Income Tax (Appeal) did not consider the case of Shri Jitendra Kumar Jain, whose income was estimated at 0.50% of transaction value. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amine which goes to the root of the cases of validity of the assessment and therefore, these Tax Appeals of the appellants-assessees stand on a different footing in view of the submissions made by the learned counsel for the appellants-assessees as the same were not considered by the Tribunal in case of Navratan Jain and this Court while dismissing the Appeal filed by the said assessee had no occasion to deal with such submissions and therefore, it was submitted that the facts of the cases of the appellants-assessees are therefore distinguishable from the facts of the case relied upon by the Tribunal in case of the Navratan Jain and therefore, these Appeals are required to be treated on a different footing than that of the aforesaid case. 6.2. It was submitted by learned advocate Mr. Shrey Lodha for the appellants-assesses that the Hon ble Apex Court has issued notice in Special Leave Petition (Civil) Diary No(s).42860 of 2023 and 42862 of 2023 filed by Navratan Gautam Singh Jain arising out of the Tax Appeal Nos. 11 and 12 of 2023. It was therefore submitted that as the Hon ble Supreme Court has already issued the notice, these Appeals are required to be kept pending at the admiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipal Commissioner of Income Tax 1, Surat vs. M/s. Surya Impex which came to be decided by the co-ordinate Bench on 16.1.2023 dealt with the very issue of accommodation entries provided by Bhanwarlal Jain Group. The group involved in the said case is the same group who is saddled with allegations of providing accommodation entry to the assesse. In M/s. Surya Impex (supra) the court held in favour of the assessee. The questions of law involved in the said case were of the same nature and were in the context of similar facts involving the same group. 7. For all the above reasons, substantial questions of law proposed by the appellant in this appeal stands already answered. No question of law much less any substantial questions of law arise in the facts of the present case. No other substantial question of law arises. The appeal is meritless. It is summarily dismissed. 9. With regard to the contention of learned advocate for the appellants-assessees of invoking Section 153C of the Act instead of taking recourse to reopening under Section 147 of the Act is concerned, both the CIT (Appeals) and the Tribunal have not taken into consideration and no such plea was raised before the CIT (App ..... X X X X Extracts X X X X X X X X Extracts X X X X
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