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TMI Blog2025 (3) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... especially when the sales were accepted by both the authorities below. Even GST authorities have not made any adverse inference qua these purchases by the assessee from these parties. Considering all these facts and circumstances, we are not in a position to sustain the addition.
We are inclined to set aside the finding of the ld. CIT (A) with regard to sustaining of addition to the tune of 12% and direct the ld. AO to delete the addition -Appeal of the Revenue is dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... me to the tune of ₹ 2,20,05,564/- has escaped assessment. During the course of assessment proceeding, the ld. AO issued noticed u/s 142(1) of the Act along with questionnaires on two occasions calling for the details/ evidences from the assessee which were duly provided and furnished. The ld. AO also in order to verify the transactions independently issued notices u/s 133(6) of the Act to the said parties. The case was also referred to the verification unit for physical verification of the addresses of the sellers and accordingly, the unit submitted its report after making physical enquiries in case of Tanman Jewels Pvt. ltd. stating that the premises were locked as the party was not available on the given address. The notice u/s 133(6) of the Act could not be served in the case of Tanman Jewels Pvt. ltd. whereas in the case of Saffron Gems Pvt. ltd., it was noted that the complex in which the said supplier was operating was closed. Accordingly, the assessee was given show cause notice on 15.03.2023 to establish the identity of sellers their capacity and genuineness of the transactions along with supported evidences. The assessee vide letter dated 18.03.2023, stated that it h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, the investigating authority deemed these submissions insufficient to prove the genuineness of the transactions. Considering the investigation findings and the inadequacy of the assessee's submissions, the assessing officer treated the purchases from Tanman Jewels Pvt. Ltd. and Saffron Gems Pvt. Ltd. as bogus purchases. These were added as unexplained expenditure under section 69C read with section 115BBE. The total income was computed at Rs 31,96,08,034/-, including the income as per the original assessment order and the addition of unexplained expenditure. The assessment proceedings resulted in the addition of potentially non-genuine purchases to the total income of the assessee. 4.3 I have gone through the assessment order and record available. In the instant case, the assessments was reopened under Section 147 of the Income Tax Act, 1961, because the assessee was alleged to have received accommodation entries from Tanman Jewels Pvt. Ltd. and Saffron Gems Pvt. Ltd. These dealers were purportedly providing accommodation entries without the actual business of goods. During the reassessment process, the assessee was required to validate the purchases made from these ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. were engaged in issuing accommodation entries in the form of bogus purchase bills. We note that the assessee has furnished all the details/ evidences qua these supplies/purchases which are available form page no.91 to 109. Moreover, the ld. CIT (A) in the appellate proceedings has noted that the addition made by the ld. AO was solely on the ground that the business premises of the above sellers was found to be closed with no business activity and further held that when sales were accepted as genuine how the purchase could be treated as non-genuine. The ld. CIT (A) to this extent as given a correct finding of facts based on the facts available and after examining the evidences filed by the assessee, however directed the ld. AO to apply 12% on these purchases for assessment of income which is apparently appears to be incorrect and against the facts on record. 06. We note that in this case, the assessee is a very big jeweler, who has declared income of ₹ 29,76,02,380/- during the year and each and every item of purchases were meticulously recorded in the book of accounts as well as in stock register. Thereafter, the movement of stocks were also recorded minutely with all det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner and whether such total go-by of the order of the Commissioner of Income Tax (Appeals) and on the contrary confirmation of the order of the Assessing Officer was perverse?" After hearing Mr. Sen, the learned advocate appearing on behalf of the appellant, and Mr. Agarwal, the learned advocate appearing on behalf of the Revenue and after going through the materials on record, we agree with the Tribunal below that so far as the purchases from M/s. Soma Enterprises and M/s. Imprint's-N-Trade were concerned, the alleged payments being made in cash and the amount involved being Rs. 50,675/- and Rs. 1,00,737/- respectively during the relevant Assessment Year and at the same time, the appellant having failed to produce any of the aforesaid parties except the bills alleged to be raisedby those two concerns, the Tribunal below was justified in disbelieving those transactions and we do not find any reason to interfere with such finding which is basically a finding of fact based on appreciation of material evidence. However, as regards the payments made to M/s. Selvas Photographics are concerned amounting to Rs. 3,12,302/-, we find that those have been made by account payee cheq ..... X X X X Extracts X X X X X X X X Extracts X X X X
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