SUYASH SHARMA,MUMBAI vs. ITO WD 19(3)(4), MUMBAI

This appeal filed by the assessee on13.12.2011 is against the order of the CIT (A)-30, Mumbai dated 28.9.2011 for the assessment year 1999-2000.

In this appeal, assessee raised the solitary issue of confirming the addition of Rs. 5,90,400/-. In the assessment dated 14.12.2006, AO made the above addition on account of „unexplained cash credits‟ u/s 68 of the Act. As per the details given in the assessment order, assessee sold the diamond jewellery and credited the above amount in the books of accounts. When the said transaction was analyzed and enquired into by invoking the provisions of section 133(6) of the Act, AO did not get a positive response from the buyer of the jewellery named M/s. Vishnu Jewellers, proprietary concern of Shri Rishi Grover. In this regard, Shri Rishi Grover filed an affidavit confirming the transaction. However, it is the finding of the AO that M/s. Vishnu Jewellers were never doing any real jewellery business and it was only engaged in issuing accommodation entries to various persons in the grab of sale of jewellery. The affidavit filed by Shri Rishi Grover dated 4.12.2006 is found unreliable and therefore, the same was not taken into cognizance. AO treated the said transaction with M/s. Vishnu Jeweller as sham transaction and invoked the provisions of section 68 of the Act and made assessment u/s 144 r.w.s 147 of the Act. Matter travelled to the first appellate authority.

During the first appellate authority, assessee could not improve its case. After considering the submissions of the assessee, CIT (A) recorded that the investigation made at confession admitting the above statement relating to the issuing of the accommodation entries and never actually delivered the goods. Eventually, CIT (A) confirmed the AO‟s finding and relied heavily on the investigation conducted by the DDIT (Inv.), Amritsar and DDIT (Inv.), Mumbai. However, assessee was never given the said incriminating information, if any, gathered by the investigation wing. There was no discussion as to why the affidavit given by Shri Rishi Grover was not taken into cognizance. However, CIT (A) dismissed the appeal of the assessee. Again aggrieved with the said decision of the CIT (A), assessee is in further appeal before the Tribunal.

During the proceedings before us, Ld Counsel for the assessee questioned the ex-parte reassessment order (supra). He also mentioned that when the assessee was not maintaining the books of account, the question of rejection of the same does not arise before an ex-parte assessment is made. However, this argument was not taken up before the Revenue Authorities. Further, he also mentioned that the incriminating information was never provided to the assessee. Further also, the reasons for rejecting / ignoring the affidavit of Shri Rishi Grover are not elucidated by the Revenue.

On the other hand, Ld DR for the Revenue relied on the orders of the Revenue Authorities.