DCIT, CENTRAL CIRCLE- 25, NEW DELHI vs. P P JEWELLERS PVT. LTD., DELHI

PER YOGESH KUMAR US, JM 1. These three cross appeals are filed by the assessee and the Revenue for assessment years 2011-12 and 2013-14 against the common order of the ld. Commissioner of Income Tax (Appeals)-29, New Delhi, dated 14.08.2017.

b. The Id. Assessing Officer has erred in law and facts by recording the reasons without any information to him as the statement of Gautam B Jain does not contain the name of the company Manirattanam Exim Private Limited as his company. c. The Ld. Assessing Officer has erred in law and facts by rejecting the objections raised by the assessee despite the retraction statement of the declarant Gautam Bhanwarlal Jain already available in records for the AY 2014-15. d. The Id. Assessing Officer has erred in law and facts, while reopening the assessment, which has not yet completed and pending before the Hon'ble ITAT, Delhi.

2. The Ld. CIT(A) has failed to observe that addition has been made without confronting the assessee with evidence. if any, in possession of the AO; thus flouting the principles of natural justice and hence the assessment order was liable to be set aside.

3. The Ld. CIT(A) has erred on facts and in law by accepting the AO's finding that the seller Maniratnam Exim Private Limited was non existent

4. The Id. CIT (A) has erred in law and facts by holding the purchases to be bogus without appreciating the facts that these the assessee had produced the bills of purchase from Sales tax registered dealer and had made the payment by account payee cheques.

The Id. CIT (A) has erred on facts and in law in by disposing of the 5. appeal solely on the basis of judgement of Hon’ble Gujrat Hitgh Court in the case of Sanjay Oil Cake Industries Vs. CIT reported at (2009) 316 ITR 214 whereas the facts of the present case are different as Shri Bhanwar Lal Jain on whose testimony the assessment was reopened and additions were made, had already retracted his statement.”

(AY 2011-12):- 3. The Revenue has raised the following substantive grounds of appeal :-

“1. That on the facts and the circumstances of the case, the Ld. CIT (Appeals) has erred in law in restricting the bogus purchases to 25% of the total purchases, while ignoring the fact that all purchases were bogus purchases from other parties & Shri Banwari Lal Jain has admitted on oath in statement u/s 132(4) that the entity is engaged in giving accommodation entries in the name of various concerns including M/s. Manirattanam Exim Pvt. Ltd.

5. Aggrieved by the assessment order dated 31.12.2016, the assessee preferred an appeal before the ld CIT(A). The ld CIT(A) vide order dated 14.08.2017 restricted the said bogus purchase to 25% of the total purchase by partly allowing the appeal. As against sustaining 25% of a total purchase, the assessee has preferred the appeal in as against the deletion of the partial addition, the revenue has preferred the appeal in . 6. We have heard the parties and perused the material on record. As per ground No. 1, the assessee is aggrieved by the action of the ld CIT(A) in disposing the appeal without adjudicating the primary ground relating to reopening of the assessment under the provision of section 147 of the Act. Further, the assessee has also urged the ground that the ld CIT(A) has failed to observed that the addition has been made without confronting the assessee with evidence if any, in possession of the AO. Thereby, the AO had violated the principle of natural justice. 7. We have gone through the order of the ld CIT(A). Though the ld CIT(A) has made detailed discussion about the issue of reopening of the assessment under the provision of section 147 but no finding has been given by the ld CIT(A) and proceeded to decide the appeal on merit. Further, we find that 5 & 6529/Del/2017 AND ITA. No. 6931/Del/2017 P P Jewellers Pvt. Ltd., Delhi. even while deciding the matter on merit the ld CIT(A) has not given appropriate reasoning for restricting the bogus purchase to 25% of the total purchase and not even given proper reasoning to delete rest of the additions. In our opinion the approach of the ld CIT(A) is erroneous. Therefore, with an intention to render the substantial justice, we deem it fit to remand the matter to the file of the ld CIT(A) for de-novo consideration. Accordingly, we direct the ld CIT(A) to decide all the issues raised by the assessee after providing opportunity of being heard. Thus, the ground Nos. 1 and 2 are partly allowed for statistical purposes.

2. The Ld. CIT(A) has erred in law and on facts by not adjudicating the legal issue raised during the course of appeal against issue of notice u/s 148 of the Act prior to communication of the Sanction from the Add. Commissioner of Income Tax.

3. The Ld. CIT(A) has erred in law and on facts by not adjudicating the legal issue raised during the course of appeal against issue of notice u/s 148 on the basis of sanction granted by the Add. Commissioner of Income Tax granted u/s 151(1) of the Act.

4. The Ld. CIT(A) has failed to observe that addition has been made without confronting the assessee with evidence, if any, in possession of the AO, thus flouting the principles of natural justice and hence the assessment order was liable to be set aside.

8. The Id. CIT (A) has erred on facts and in law in by disposing of the appeal solely on the basis of judgement of Hon’ble Gujrat Hitgh Court in the case of Sanjay Oil Cake Industries Vs. CIT reported at (2009) 316 ITR 214 whereas the facts of the present case are different as Shri Bhanwar Lal Jain on whose testimony the assessment was reopened and additions were made, had already retracted his statement and further the detailed enquiries made by the Ld. AO confirming that the purchases made from three parties namely Parshwanath Gems Priate Limited, Krishma Diamond Private Limited and Shri Ganesh Gems were genuine.”