Case Law Details
Brief of the case- ITAT Mumbai has held in the case of ACIT vs. Tristar Jewellery Exports Pvt. Ltd. That Reliance on statement of supplier who confesses to providing accommodation entries without giving assessee right of cross-examination violates principles of natural justice. . A statement recorded at the back of a party cannot be used against such party without confronting such statement to the party. So addition base on such statement are not justified.
Brief Facts of the Case and Grounds of Appeal
Brief Facts of the case:
The Assessee is in the business of purchase and sale of jewellery in the export promotion zone. During the year under consideration, the assessee has purchased diamonds worth Rs. 4,09,12,718/- from M/s Zalak Impex.
As per the record, the completed assessment of the assessee for the year under consideration, i.e. A.Y. 2006-07 was reopened on the basis that information was received from the ITO -25(20(1), Mumbai, that during the survey proceedings conducted at the premises of M/s Zalak Impex. The proprietor of the said entity has confessed in the statement recorded u/s 131 of the Income Tax Act 1961, to have provided accommodation entries in the form of sales and purchases to various parties, including the assessee, who had allegedly obtained bogus bills for non existing purchases of Rs. 4,09,12,718/- during the year. The A.O. added 25% of such alleged bogus purchases to the income of the assessee. The ld. CIT(A) reduced the addition to 7%, amounting to Rs. 35 lacs.
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