REDEEM EXPORTS PVT. LTD,SURAT vs. INCOME TAX OFFICER, WARD 2(1)(1), SURAT

The grounds of appeal are as under:- “1. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming purchases made amounting to Rs. 1,15,80,000/- from M/s Santosh Gems Pvt. Ltd and M/s Dharmik Exports Pvt. Ltd. as bogus purchases without considering that assessee had submitted all the documents to prove the identity, creditworthiness and genuineness of transactions.

The assessee company is engaged in the business of trading of rough and polished diamonds during the year under consideration. The assessee company filed its return of income for assessment year 2017-18 on 23-03-2018 declaring total income at Rs. 75,200/-. Statutory notices were issued which was replied by the assessee and the details were filed by the assessee. The Assessing Officer observed that during the course of survey action u/s. 133A in the case of Crossiance Diamond Pvt. Ltd., statement of Ramesh Soni was recorded on oath on 02-03-2017 wherein he admitted that he is operator of Dharmik Export Pvt. Ltd. and Santosh James Pvt. Ltd. and running the day to day operations of the said companies. He also admitted that and Dharmik Export Pvt. Ltd. and Santosh James Pvt. Ltd. were paper concerns and not doing any real business. He 2

The ld. A.R. submitted that the CIT(A) ignored the details filed by the assessee during the assessment proceedings which proved the identity, creditworthiness and genuineness of the transactions. In fact, the assessee was not given the copies of documents found during the survey action as well as statement recorded by the revenue authorities that of Shri Ramesh Soni. The assessee was not given the opportunity of cross –examination of the persons.

The ld. D.R. relied upon the assessment order and the order of the CIT(A). 3

We have heard both the parties and perused all the relevant material available on record. At the time of hearing, the ld. A.R. filed the additional evidences including that of ledger confirmation, purchase invoice, income tax return of the suppliers, stock register, bank statements and sales and purchase registers. Since these were old records, it was not filed before the Assessing Officer as well as before the CIT(A), therefore the ld. A.R. submitted that the assessee be given opportunity to demonstrate the assessee’s case through its additional evidence and the matter may be remanded back to the file of the CIT(A) for proper verification and adjudication of the issues. The said plea is accepted as the additional evidence comprising the stock register, income tax return of suppliers, sale and purchase registers which has to be looked into. The matter is remanded back to the file of the CIT(A) for proper verification of the evidences filed by the assessee before us and adjudicate the issue on merit as per Income Tax Act.

In the result, the appeal of the assessee is partly allowed for statistical purpose.