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III. Direct Taxes Case Law:
1. Shantivijay Jewels Ltd. Vs. DCIT, I.T.A. No. 1045/Mum/2016, Date of Pronouncement: 13.04.2018, ITAT - Mumbai
Issue
Where one of the supplier admitted providing accommodation entry
would lead to conclusion that purchase made by the assessee from him is
also bogus.
Held:- No
Brief Facts
The assessee-company engaged in business of manufacturing of
jewellery filed its return of income declaring the total income of
Rs.60.56 lakhs for AY-2011-12. Invoking provisions of 133(6) the Act
Ld.AO called for details of purchases from three parties controlled and
managed by a single group to which one of the supplier admitted
providing accommodation entries. The Ld.AO straightway proceeded to add
Rs.14.99cr to income of assessee rejecting documents filed to prove
genuineness of sales. On appeal the Ld. CIT(A) restricted the addition
to 12.5% of purchases being the VAT evaded on such purchases by relying
on judgement in the case of Nikunj Eximp Enterprises (372 ITR 619).
Being aggrieved, the assessee has filed an appeal before Hon’ble ITAT.
Held
The Hon’ble ITAT while considering the fact that assessee did not
sell goods locally, the Ld.AO not doubting the sales of assessee and
suppliers admitting sale of goods by filing affidavits held that there
is a subtle difference between issuing bogus bills and providing
accommodation entries and the supplier had admitted of issuing bogus
bills but nowhere on record he had admitted of providing accommodation
entries specifically to the assessee. Moreover, suppliers were paying
VAT and were filing their returns of income. Therefore, we are of the
opinion that Ld. CIT was not justified in partially confirming the
addition.
The appeal was held in favour of the assessee and against the revenue.
(Please click here for judgment)
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