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08-03-2019, Nitin Rasiklal Sanghvi, Section 148, 133(6), Tribunal Mumbai

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2 months 1 week ago #8761 by amit
Section - 148, 133(6), 131, 68
Order Date - 08-03-2019
Favouring - Revenue
Court - Tribunal Mumbai
Appellant - Nitin Rasiklal Sanghvi
Respondent - ITO
Citation - 319Taxpundit208
Appeal No. - ITA No.2304 and 2305/Ahd/2017
Asstt. Year - 2010-11 and 2011-12



Present two appeals are directed at the instance of the assessee against separate orders of the ld.CIT(A) dated 4.9.2017 passed for the Asstt.Year 2010-11 and 2012-12.

2. The grounds of appeal taken by the assessee are verbatim same except variation in the quantum. He has taken three grounds of appeal in both the years. However, his grievance revolves around a single issue i.e. the ld.CIT(A) has erred in confirming the additions of Rs.2,00,000/- and Rs.5,63,833/- in the Asstt.Years 2010-11 and 2011-12 which have been added by the AO on the ground that the assessee has inflated its expenditure and failed to prove genuineness of the purchases made by him.

3. Facts on all vital points are common, rather assessment orders and orders of the ld.CIT(A) are also identical except variations of dates and quantum. Therefore, for the facility of reference, I am taking facts mainly from the Asstt.Year 2010-11.

4. Brief facts of the case are that the assessee at the relevant time was engaged in the business of dealing in export of cut & polished diamonds and jewellery in the name and style of M/s.Bony Exports. He has filed his return of income showing total income at Rs.2,79,615/- and Rs.5,15,600/- in the Asstt.Years 2010-11 and 2011-12. The information came to the possession of the AO that M/s.Bony Exports had made purchases from Kriya Impex Pvt. Ltd., and Kalash Enterprise which was run by one Shri Rajendra Jain who has carried out the business of providing accommodation entries. A search was carried out at the premises of Shri Rajendra Jain and he declared under oath that he has only provided accommodation entries. In the Asstt.Year 2011-12 such purchases were made from Kalash Enterprises which was run by Shri Manish Jain who was also engaged in the business of providing accommodation entries. On the basis of above information, assessment proceedings were reopened in both the years and notices under section 148 of the Act were issued and served upon the assessee in both the assessment year. In response to the notice, the assessee has submitted that return originally filed be treated as filed in response to this notice. The AO issued notice under section 143(2) in both the years and commenced investigation. He confronted the assessee to show genuineness of the purchase from these concerns. The assessee contented that these purchases were made telephonically and payments were made through banking channel. According to the assessee, he has submitted bank certificate from the seller showing payments were received through bank channel. Copy of the income-tax return, PAN and confirmation from Kriya Impex Pvt. Ltd., and Kalash Enterprises were stated to be filed before the AO. The ld.AO was not satisfied with the nature of evidence submitted by the assessee. He assigned (vii) reasons for rejecting the explanations and arrived at a conclusion that the assessee has inflated the expenses. The reasons given by the AO in both the assessment years are common which reads as under:

“(i) In view of the above information in respect of nongenuine bills/bogus seals, it is noticed that the assessee is one of the beneficiary of bogus bill and has obtained bogus bills for the purchase amounting to Rs.2,00,000/- in F.Y.2008-09 relevant to A.Y.2009-10 from the Kriya Impex P.Ltd., Surat.

(ii) The Income tax department has conducted search and seizure action in the case of Group concerns of Shri Rajendra Jain & Gautam Jain and conclusively proved that theseparties are engaged in the business of providing accommodation entries only as can be seen from the discussions in the preceding paragraphs. Kriya Impex Pvt. Ltd is run by shri Rajendra Jain and is issuing bills without delivering any goods and services.

(iii) Evidently the assessee had adopted a modus operandi to reduce its true profits by inflating its purchase expenses by taking accommodation entries from Kriya Impex Pvt. Ltd.

(iv) Thus in the stock statement of the assessee, the purchases to the extent made from Kriya Impex Pvt, Ltd remained un verifiable and hence I arrive at the conclusion that the purchases shown by the assessee in the stock statement are inflated and bogus purchases are debited to trading account to suppress the true profits from disclosure to the department.

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