ASSISTANT COMMISSIONER OF INCOME TAX-10(1)(1), MUMBAI vs. H.K.JEWELS PVT LTD., MUMBAI

The brief facts as emanating from records are: The assessee is a manufacturer and trader of Gold & Diamond jewellery. During the course of assessment proceedings, the AO found that the assessee is involved in obtaining accommodation entries aggregating to Rs. 4,95,084/- from M/s Amit Trading Co., a declared hawala operator. During assessment proceedings, the assessee failed to substantiate genuineness of purchases and the aforesaid dealer. The AO made addition of entire alleged bogus purchases. The assessee carry the issue in appeal before the CIT(A). The CIT(A) after examining the facts and various decisions rendered by Hon’ble High Court and the Tribunal restricted the addition to 15% of alleged bogus purchases. Hence, the present appeal by the Revenue.

Shri Sushil Kumar Mishra representing the Department submitted that the assessee has failed to prove genuineness of suspicious purchases and the dealer from whom such purchases were made. The notice under section 133(6) of the Income Tax Act, 1961 [hereinafter referred to as ‘the Act’] was sent to the dealer from whom the assessee had made alleged purchases, the same was received back unserved. The assessee has not filed any confirmation from the said dealer to prove genuineness of the transactions. The ld. DR prayed for restoring the findings of AO and setting-aside the impugned order of CIT(A).

Submissions made by ld. DR heard, orders of authorities below examined. Undisputedly, the assessee failed to discharge its onus in proving genuineness of the dealer from whom alleged bogus purchases were made. At the same time, it is observed that the sales turnover declared by the assessee have been accepted by the AO. It is not the case of Revenue that there is आअसं. 5659/मुं/2019 (िन.व.2010-11) (A.Y.2010-11)