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TMI Blog2025 (4) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... in Appeal No. 10051/2020-21 dated 22.12.2023 against the order of assessment passed u/s 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act') dated 30.12.2022 by the Assessing Officer, ACIT, Central Circle-14, New Delhi (hereinafter referred to as 'ld. AO'). As these are cross appeals, they are taken up together and disposed of by this common order for the sake of convenience. Identical issues are involved in both these appeals, hence, they are taken up together and disposed of by this common order for the sake of convenience. 2. No arguments were advanced by the ld AR for the legal grounds raised in the appeal of the assessee. Hence, they are treated as not pressed. 3. The Ground Nos. 4 and 5 raised by the assessee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade by the ld AO. Aggrieved, both assessee as well as the revenue are in appeals before us. 7. With regard to purchase made from M/s. Bombay Gold Lab by the assessee amounting to Rs. 2,79,52,732/-, the same was treated as ingenuine purchase on the ground that the Mr. Praveen Patil did not respond to the summons issued u/s 131 of the Act by the ld AO to cross verify the veracity of purchase made from him by the assessee. Further, Inspector Report suggested that no company in the name of Bombay Gold Lab exists at the given address. The assessee submitted that it had made sales of Rs. 127,42,23,352/- to M/s. Bombay Gold Lab during the year under consideration. In support of the transactions with Bombay Gold Lab, the assessee submitted the cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isting at the given address, the sales made by the assessee to the said party was also doubted. The ld AO concluded that the said entity is a bogus entity engaged in the business of providing accommodation entry of bogus sales and purchase of bullion. The ld AO further observed that assessee had made purchase from Govt entities and banks such as MMTC and HDFC, hence, genuineness of the purchase cannot be doubted in respect of sales stated to be made to bogus entity Bombay Gold Lab by the assessee in order to cover up the actual sales made to some other party at higher profit margin in grey market. Thus grey market premium was estimated at 8% by the ld AO on account of alleged sales to Bombay Gold Lab. This premium percentage was reduced to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Companies Act in Hyderabad and also duly assessed to income tax in PAN AADCD5806H and its GST No. 36AADCD5806H1ZR. This party has already furnished confirmation that it had indeed made purchase from the assessee. Merely because there was some cash deposit in its bank account prior to the issuance of cheques to the assessee towards payment of purchase consideration, it cannot be concluded that the source of said cash deposit represent the unaccounted income of the assessee. Similarly, with regard to sales made by the assessee to M/s. Bhagya Laxmi Gems and Jewellers Pvt. Ltd, the said company is a Pvt ltd company registered under Companies Act at Secunderabad, Telengana and assessed to income tax in PAN AAECB3009K and GST No. 33AAEC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocuments were placed by the assessee from his end and also by the said party from his end directly before the ld AO in response to notice u/s 133(6) of the Act. Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in the case of Orissa Corporation reported in 159 ITR 78(SC) wherein, failure of a 3rd party in not responding to the summons would not lead to draw an adverse inference against the assessee. The assessee on its part had proved the veracity of the purchase made from the said party and disclosed the same in its profit and loss account. The payments for the same were made through regular banking channels of the assessee. The sources for making payment for the same are duly drawn from the books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se stands accepted, the purchase cannot be doubted. The books of account of the assessee have not been rejected by the ld AO or by the ld CIT(A). With regard to the Inspector report that Bombay Gold Lab does not exist at the address given, the assessee had already pleaded that said Inspector's Report was never furnished to the assessee for its rebuttal over the purchase made by the assessee which includes the disputed purchase, the closing stock, sales which are reflected in the books of account already cannot be doubted as they are not rejected by the ld AO. The ld CIT(A) duly appreciated all these facts and erroneously proceeded to make an ad hoc addition @1% of the value of purchase treating it as an accommodation entry on account of cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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