Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI MANOJ KUMAR AGGARWAL
आदेश आदेश /O R D E R आदेश आदेश
PER MAHAVIR SINGH, VP:
This appeal by the Assessee is arising out of the order of the Commissioner of Income Tax (Appeals)-2, Coimbatore in Appeal No.432/2016-17, vide order dated 05.12.2018. The Assessment was framed by the Income Tax Officer, Non-Corporate Ward-1(4), Coimbatore for the Assessment Year 2013-2014 u/s.143(3) r.w.s.147 of the Income Tax Act, 1961, (hereinafter ‘the Act’) vide order dated 27.06.2016.
2. The only issue in this appeal of the Assessee is as regards to the order of the CIT(A) confirming the action of the Assessing Officer in making an addition of Rs.6,75,000/- u/s.68 of the Act, despite the fact that the Assessee filed his return of income on presumptive basis u/s.44AD of the Act. For this, the Assessee has raised various argumentative grounds which we need not reproduce.
The brief facts are that the Assessee firm is engaged in the business of jewellery and diamonds. The Department received information from the Investigation Wing of the Income Tax Department, Mumbai that the Assessee is availing accommodation entries in the nature of bogus purchases from M/s. Nayan Gems and during the financial year 2012 – 2013, relevant to the Assessment Year 2013 – 2014, the Assessee has obtained bogus purchases and is availing accommodation entries of Rs.6,75,000/-. The Assessing Officer treated the claim of bogus purchases of Rs.6,75,000/- as unexplained income u/s.68 of the Act. Aggrieved, the Assessee preferred appeal before the CIT(A). The CIT(A) also confirmed the action of the Assessing Officer by observing in paragraph Nos.6.0 and 7.0, as under:
“6.0. I have gone through the assessment order, written submissions of the appellant and other facts available in the record. The main contention of the appellant is that in a similar addition in the case of one Shri. Rathnamahal Jewellers, Coimbatore by the same Officer, in the same set
:: 3 :: Hon’ble ITAT ‘D’ SMC Bench, Chennai in dated 26.06.2013. Further submitted that the purchase and sales were actually made and recorded in the books of accounts and the payment was made by cheque. The AO merely relied on the sworn statements recorded from Shri. Rajendra Jain, during the survey action, without providing a copy or producing him for cross examination.
6.1. On going through the various submissions, I find the following facts:
Even though, the decision cited by the appellant is almost on similar lines, it is only a finding of a fact in the case of that particular case. Without knowing, whether the facts in both cases are identical, the same cannot be applied to this case. The facts available may be different and various representatives would have presented material evidences available (can be different in both cases) differently.
Even the Officer has not disputed that it is recorded in the books and payment has been made by cheque. It is given in para.4 of the order. When there was additional evidence in the form of a sworn statement by the issuer of the invoice that he has issued without supply of the goods the onus of proving has shifted back to the appellant. As is clear from para.4 of the order, the Assessee could have explained by producing copy of purchase order, proof of delivery and mode of transportation, etc., to prove that the Assessee has actually made purchases from the above concern.
3. It was always the contention of the AO that the Appellant has paid the supplier through cheque, and there is an :: 4 :: invoice, to make the transaction genuine. But, when the suspicion arises, it was the obligation of the Appellant to prove the transaction with additional evidence, which the Appellant failed to do.
7.0. On the reasons given above, I find that the Appellant has not proved the transaction, when the onus was on him to do so. I hold that the AO was correct in concluding that there is a purchase inflation to the extent of Rs.6,75,000/-. Hence, the order of the AO is upheld.”
Aggrieved, now the Assessee is in second appeal before the Tribunal.
We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the Assessee has obtained bogus purchase entries from M/s. Nayan Gems who is engaged in the business of providing accommodation entries for sale and purchase bills of various parties in return of some commission.
Here, the Assessee has obtained bogus purchased bills of diamonds and made payment through cheques and recorded the same in the books of accounts but could not prove the purchase order, proof of delivery and mode of transportation, etc. Presumption is that, the Assessee has obtained these bogus bills just to cover up the purchases made from the gray market and for that the Assessee might have saved VAT and some element of profit. Thereby, we estimate the profit rate on these bogus purchases of Rs.6,75,000/- and restrict the addition to the extent of 12.5% as profit out of the bogus purchases,
:: 5 :: because the investment is recorded in the books of accounts. Hence, we direct the Assessing Officer to re-compute the income by applying profit rate of 12.5% on the bogus purchases.
In the result, the appeal of the Assessee is partly allowed.
Order pronounced in the court on 11th April, 2022 at Chennai.