DCIT-3(1), BHOPAL, BHOPAL vs. MANIDHARI JEWELLERS, BHOPAL

Facts

During the demonetization period, the assessee engaged in transactions totaling Rs. 2,34,50,000/- with M/s R.B. Enterprises. The assessment officer initiated reassessment proceedings suspecting these transactions to be bogus, based on a survey conducted at R.B. Enterprises where its proprietor admitted to bogus transactions and surrendered income.

Held

The Tribunal held that the assessee had discharged its onus to prove the genuineness of the sales by providing documentation and that the revenue failed to establish a malicious nexus between the seller and buyer. The additions made by the Assessing Officer were based on presumptions rather than conclusive evidence.

Key Issues

Whether the transactions between the assessee and M/s R.B. Enterprises were genuine business transactions or bogus accommodation entries, and whether the addition made by the Assessing Officer was based on presumption or concrete evidence.