M/S. BOSCON LEATHER PRODUCTS PVT. LTD.,NORTH 24 PGS. vs. DCIT,CIR-11(1),KOL, KOLKATA

The main grievance of the assessee is against the action of the ld. CIT(A) in sustaining the addition to the tune of 23.82% of alleged disputed purchases by applying GP ratio of 23.82% without rejecting the books of account u/s 145(3) of the Act.

Brief facts of the case as noted by the Assessing Officer for Assessment Year 2012-13 is that assessee declared income of 2 to 826/Kol/2023 M/s. Boscon Leather Products (P) Ltd. A.Y. 2012- 13 to 2016-17 Rs.39,58,140/- in the e-return filed for the impugned year. Subsequently, the case of the assessee was selected for scrutiny after reopening u/s 147 of the Act. On the basis of specific information received from ld. DDIT (Inv.), Kolkata, that the assessee has shown to have made bogus purchases from three different concerns of Shri Sanjiw Kumar Singh, who when searched by the Department gave statement that he and his concerns are providing accommodation entries in lieu of commission. The ld. Assessing Officer noted that the purchase cost from the three concerns of Shri Sanjiw Kumar Singh totaled toRs.1,22,56,644/-. Thereafter, the ld. Assessing Officer reproduced the statement of Shri Sanjiw Kumar Singh and he was of the opinion that the said purchases from three concerns are bogus and added 23.82% profit i.e. Rs.29,19,553/- of total purchases of Rs.1,22,56,644/-. Aggrieved by the above order, the assessee preferred appeal before the ld. CIT(A), who was pleased to confirm the same.

Aggrieved, now the assessee is in appeal before this Tribunal.

We have heard both the parties and perused the records. It is noted that the ld. Assessing Officer has taken a view that the assessee was engaged in manufacturing of leather products and its income was from the said business. The Assessing Officer based on an information received from the investigation wing that Shri Sanjiw Kumar Singh and his group concerns were indulged in providing accommodation entries through his three concerns and taking note that the assessee had made purchase transactions with these concerns to the tune of Rs.1,22,56,644/- made the addition of GP @ 23.82% of total undisclosed purchase from these concerns i.e.,

3 to 826/Kol/2023 M/s. Boscon Leather Products (P) Ltd. A.Y. 2012- 13 to 2016-17 Rs.29,19,533/- in the hands of the assessee. When the Assessing Officer confronted the assessee with the information and statement of Shri Sanjiw Kumar Singh recorded during the course of search, the assessee has brought to the notice of the Assessing Officer that it had purchased goods from the parties through banking channels and the purchases were supported by proper bills, delivery challans etc. which according to the assessee could go to show that purchases are genuine. However, according to the ld. A/R, the Assessing Officer has not given any credence to the documents/evidence placed before him by the assessee to substantiate the genuineness of the purchases made by the assessee. While perusing the order of the ld. Assessing Officer we notice that the ld. Assessing Officer in his assessment order has reproduced the statement of Shri Sanjiw Kumar Singh but the ld. Assessing Officer had not given any opportunity to the assessee to cross-examine Shri Sanjiw Kumar Singh. The ld. Assessing Officer has not given any credence to the documents (supra) as filed by him nor has found any fault with the same. Under such circumstances, we take note of the decision of the Hon’ble Supreme Court of India in the case of CIT, New Delhi vs M/s. Oden Builders (P) Ltd. [Review Petition (C) Diary No. 22394 of 2019 in Civil Appeal Nos. 9604-9605 of 2018] wherein it has been held by the Apex Court as under: “Delay condoned We have perused the review petition and find that the tax effect in this case is above Rs. I crore, that is, Rs.6,59,27,298/-. Ordinarily, therefore, we would have recalled our order dated 17th September. 2018, since the order was passed only on the basis that the tax effect in this case is less than Rs. l crore.

We also notice that the ld. Assessing Officer while passing the impugned order has not found or pointed out any discrepancy in the books of account filed by the assessee. When the books of accounts are not rejected, the Hon’ble Calcutta High Court in the case of Swadeshi Commercial Co. Ltd. vs CIT [ITA No. 219 of 2001 dated 18.12.2008 (Cal)] held that gross profit cannot be estimated as the Assessing Officer has no evidence to come to the conclusion that the assessee had earned undisclosed profit. The entire addition was made on surmises and conjectures. Accordingly, we are of the considered view that the addition made by the Assessing Officer as sustained by the ld. CIT(A) is bad in law. In view of the above

Insofar as the appeals in 824, 825, 826/Kol/2023 for Assessment Years 2013-14, 2014-15, 2015-16 and 2016-17 are concerned, the facts being identical to ITA No. 822/Kol/2023 for Assessment Year 2012-13, our decision rendered therein shall apply mutatis mutandis to all these Assessment Years.

In the result, all these appeals raised by the assessee are allowed. Order pronounced in the open court on 07.11.2023