DCIT, CIRCLE-1(1)(1), SURAT V. DIVA DIAMONDS PVT. LTD, SURAT

ITA 128/SRT/2020

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 1898 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2022
• Appeal Filed By: Department
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 26-06-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 17-06-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained cash credit; Revision of order; Opportunity of cross examination; Tangible material; Deemed dividend; Accommodation entries; Deemed export; Reason to believe; Bonafide mistake; Set aside
• Section: 147; 68; 148; 263; 143(3); 142(1); 2(22)(e); 143(2); 73; 13; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRIPAWAN SINGH, JM &DR. A.L.SAINI, AM आयकर अपीलसं./ITA No.128/SRT/2020 (Ǔनधा[रणवष[ / Assessment Years: (2014-15) (Virtual Court Hearing) Deputy Commissioner of Income-tax, Circle-1(1)(1), Room No.108, 1 st Floor, Aayakar Bhavan, Majura Gate, Surat-395001 Vs. Diva Diamonds Pvt.Ltd., 302, Gokul Building, Mahidharpura, Pipla Sherry, Surat-395007 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADCD 1389 H (Appellant) (Respondent) Cross Objection No.13/SRT/2020 [Arising in ITA No.128/SRT/2020] (Ǔनधा[रणवष[ / Assessment Years: (2014-15) Diva Diamonds Pvt.Ltd., 302, Gokul Building, Mahidharpura, Pipla Sherry, Surat-395007 Vs. Deputy Commissioner of Income-tax, Circle-1(1)(1), Room No.108, 1 st Floor, Aayakar Bhavan, Majura Gate, Surat-395001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADCD 1389 H (Applicant) (Respondent) आयकर अपीलसं./ITA No.313/SRT/2019 (Ǔनधा[रणवष[ / Assessment Years: (2014-15) Diva Diamonds Pvt. Ltd., 302, Gokul Building, Mahidharpura, Pipla Sherry, Surat-395007 Vs. Principal CIT-1,Surat Room No.123, 1 st Floor, Aayakar Bhavan, Majura Gate, Surat-395001 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AADCD 1389 H (Appellant) (Respondent) Assessee by Shri Himanshu Gandhi, CA Respondent by Shri H. P. Meena, CIT(DR) Date of Hearing 27.06.2022 Date of Pronouncement 14.07.2022 Page | 2 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 आदेश / O R D E R PER DR. A.L. SAINI, AM: This bunch of three appeals pertaining to single assessee for Assessment Year (AY) 2014-15. In ITA No.128/SRT/2020, the Revenue has filed the appeal, and assessee is in Cross-Objection in C.O. No.13/SRT/2020. In ITA No.313/SRT/2019, the assessee has filed an appeal against the order of Ld. Principal Commissioner of Income-tax, Surat dated 22.03.2019 u/s 263 of the Income Tax Act, 1961(hereinafter referred to as ‘the Act’). 2. First, we shall take Revenue’s appeal in ITA No.128/SRT/2020, wherein the grounds of appeal raised by the Revenue are as follows: “1) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in restricting the disallowance of Rs.11,47,32,742/- made by the A.O on account of bogus purchase from 100% to 5% of such bogus purchases without appreciating the facts that the assessee failed to prove the bona fide of purchases made from seven bogus parties which were proved to be non-existent in the physical inquiries conducted during the course of assessment? 2) Whether on the facts and circumstances of the case, the Ld. CIT(A) is justified in restricting the disallowance from 100% to 5% of such bogus purchases without appreciating that bogus purchase could not be restricted to certain percentage when the entire transaction was found as bogus as upheld by the Hon'ble Guj High Court and Apex Court in the case of N.K Proteins (Industries) Ltd. Vs. ACIT TA No.242/2003 dated 20/06/2016 and SLP(C) CC No.963/2017 dated 16/01/2017?” 3. Brief facts qua the issue are that assessee filed its return of income on 31.10.2014 declaring total income of Rs.26,69,863/-. The case of assessee was selected for complete scrutiny. Accordingly, a notice u/s 143(2) of the Act was issued on 24.09.2015 and duly served upon the assessee. Further a notice 142(1) of the Act was issued on 19.04.2016 & 26.07.2016 and duly served on the assessee. One of the main criteria for selection of assessee’s case for scrutiny was to verify the disproportionate raise in sundry creditors in compared to the immediately preceding previous year. During the assessment proceedings the assessee was requested to furnish the list of creditors or loan outstanding for more than 3 years. In response to the above query, the assessee-company, vide submission dated Page | 3 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 21.11.2016 furnished the ledger account in respect of nine creditors. In order to verify the genuineness of purchase, summons were issued by assessing officer on 16.12.2016 to Surat based seven parties namely (i) Vardhaman Trading, (ii) Sahil Enterprises (iii) Mahak Enterprise (iv) Sparsh Impex (v) Arihant Exports (vi) Yatin Enterprise (vii) Vatsal Enterprise. The Inspector was deputed to serve these summons to the concerned parties. Then the Inspector so appointed has reported to the assessing officer that out of the seven parties against whom summons were issued, he was able to serve only one summon to the party namely, M/s Vatsal Enterprise, Surat. Remaining summons were not served due to various reasons. Later on, assessing officer has also issued notice to these seven parties at the below given address for personal attendance on 21.12.2016. Sr No Name of the party Address 1 Vardhaman Trading Shop No 2/3,Vardhman Park, Amroli, Surat 2 Sahil Enterprises 13-14, Vardhaman park-A, New Kosad Road, Amro 3 Mahak Enterprise 9, Bagar Faliya, ModiTekra, Nana Varachha, Surat 4 Sparsh Impex Office No. 112, New DETC Building, Hath Faliya, Haripura, Surat 5 Arihant Exports Office No. 112, New DTC Building, Hath Faliya, Haripura, 6 Yatin Enterprise B-32, Gokul Building, Pipla Sheri, Mahidharpura, Surat 7 Vatsal Enterprise 13, Vujay Nagar, Bh. Harji Nagar, Udhna, Surat Finally, the assessing officer held that genuineness of these seven parties has not been proved by assessee. SN Name of the party Amount 1 Vardhman Trading 86,78,072 2 Sahil Enterprises 1,13,905 3 Mahak Enterprise 1,22,320 4 Sparsh Impex 5,00,52,671 5 Arhant Exports 5,00,57,441 6 Yatin Enterprises 52,03,383 7 Vatsal Enterprises 5,04,950 11,47,32,742 Page | 4 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 Therefore, assessing officer made addition of Rs.11,47,32,742/- under section 68 of the Act. 4. Aggrieved by the order of Assessing Officer, the assessee carried the matter in appeal before Ld. CIT(A) who has restricted the addition at @ 5% of unverifiable purchases observing as follows: “8.8 In interest of principles of uniformity and consistency the same decision is taken in the instant appeal. The AR has also raised this as alternative plea. Accordingly, a disallowance of 5% of impugned unverified purchases of Rs.14,56,72,642/- is made. The disallowance amounts to Rs.73,28,630/-. The grounds of appeal are partly allowed.” 5. Aggrieved, the Revenue is in appeal before us. 6. Before us, Ld. CIT-DR for the Revenue argued that these parties relate to Rajendra Jain Group cases who used to provide accommodation entries/bogus purchase entries therefore, original addition @ 100% of bogus purchases made by the Assessing Officer should be sustained. 7. On the other hand, Ld. Counsel for the assessee contended that out of seven parties only two parties belong to Rajendra Jain Group cases. He further submitted that assessee has submitted bills, vouchers and all transactions were through banking channel hence the entire addition on account of unverifiable purchases should be deleted. 8. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that in the case of beneficiaries of the accommodation entry providers being Shri Rajender Jain, Shri Pravin Jain and Shri Bhawarlal Jain, this bench has taken the view to sustain addition @6% of bogus purchases. The ld Counsel submitted before us that only two parties belong to Rajendra Jain group cases, therefore in case of remaining Page | 5 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 five parties the addition should not sustain @6% of bogus purchases. We do not agree with ld Counsel`s stand, because all remaining five parties are also engaged in bogus purchases/sales, hence the issue under consideration is squarely covered by the decision of Co-ordinate Bench of this Tribunal in the case of ITO Ward- 3(1)(5), Surat vs. Pankaj K. Choudhary & Otrs. For A.Y. 2007-08 in ITA No.1152/SRT/2017 dated 27.09.2021, wherein the Co-ordinate Bench of this Tribunal has inter alia observed as follows: “4. Brief facts of the assessee that the assessee is proprietor of Parvati Exports and engaged in the business of diamond. The assessee filed his return of income for the A.Y. 2007-08 on 26.09.2007 declaring total income of Rs.1,81,840/-. Scrutiny assessment for this assessment year was competed under section 143(3) on 10.03.2009 determining the total income of Rs.6,50,490/-. Thereafter, the case of assessee was reopened under section 147 of the Act. Notice under section 148 of the Act was issued on 29.03.2014 served on 31.03.2014. The case was reopened on the basis of information received from DGIT(Investigation) Mumbai. In the information received from Investigation Wing, Mumbai it was informed that a search and seizure action was carried out by Investigation wing-Mumbai on Bhanwarlal Jain Group on 03.10.2013, which resulted in collection of evidence that Bhanwarlal Jain, his sons Rajesh and Manish were operating certain benami concerns in the name of their employees and staff for providing bogus accommodation entries of unsecured loans, sale and purchase of different kinds of material. It was unearth that said Bhanwarlal Jain Group provided accommodation entries of Rs. 25,000 crore. The statement of Bhanwarlal Jain was recorded under section 132(4) of the Act, wherein he had admitted that his family members are managing various entities which are providing accommodation entries. During the course of search, blank cheque book signed by dummy partners / directors /proprietor of entities were found and seized. It was informed that assessee is one of the beneficiaries of bogus purchase form three following entities managed by Bhanwarlal Jain Group. The assessee has shown following purchased from the said parties: Name of the Party Amount Parvati Export 2,00,06,398/- Mahalaxmi Gems Pvt Ltd 2,28,37,445/- Mayur Export 5,56,500/- 4,34,00,343/- 5.On the basis of such information, the Assessing Officer (AO) formed opinion that income of the assessee of Rs.4.34 crore has escaped from assessment and that he was satisfied that it is a fit case for reopening under section 147 of the Act. The assessee in response to notice under section 148, filed his reply dated 28.04.2014, stating therein that return of income filed on 26.09.2007 may be treated return in response to notice under section 148 of the Act. The assessee demanded copy of reasons recorded. The copy of reasons recorded was provided to the assessee. The assessee filed his written objection on 18.12.2014. In the objection, the assessee stated that information received by AO is general in nature with no evidentiary value. In the objection, the assessee stated that it is not disclosed that the Parvati Exports, Mahalaxmi Gems Pvt. Ltd and Mayur Exports are related to Bhanwarlal Jain Group. Bhanwarlal Jain has no connection with all three concerns. The assessee has never made any transaction with Bhanwarlal Jain Group. The assessee has shown purchases in the Income Tax Return for the A.Y. 2007-08 in Profit and Loss Account which includes purchase from said Page | 6 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 concerns and thus fully disclosed in the return of income and there was no escapement of income for the assessment year under consideration. The assessee also referred certain case laws in its objections. The objection of assessee was dispose off by AO vide separate order dated 09.02.2015 wherein the objection of assessee was rejected. The AO after rejection of objection proceeded for assessment. 6.The AO issued show cause notice dated 13.03.2015, as to why the purchases shown from three entities should not be added to the income of assessee. The extract of notice is referred in para 5 of the assessment order. The assessee filed his reply dated 19.03.2015. The assessee along with its reply furnished confirmation of parties, purchase bill, bank statements, stock register and copy of ITR of purchased parties. The assessee claimed that all transactions were routed through banking channel and that there is no proof that assessee received cash against the cheque issued for purchase. The explanation furnished by the assessee was not accepted by the AO. The AO concluded that mere transaction routed through banking channel is not sufficient evidence. The AO by relying upon the report of Investigation Wing of Bhanwarlal Jain Group made addition of 100% of the purchases shown from all three entities. 7.Aggrieved by the 100% addition of impugned purchases in the assessment order, the assessee filed appeal before the ld.CIT(A). Before the ld.CIT(A), the assessee challenged the validity of reopening as well as additions on merit. The assessee filed detailed written submission. The submission of assessee is recorded in para 7 of the order of ld.CIT(A). In the submission, the assessee explained that AO has not mentioned in the reasons recorded as well as in the assessment order, if he has taken prior approval of higher authorities as required under section 151 of the Act. Therefore, reopening of assessment under section 147/148 of the Act is void and need to be quashed. No independent enquiry is conducted by AO before issuing notice under section 148 of the Act. The AO purely acted on the information received from the Investigation Wing. The AO was required to form his own opinion that income has escaped assessment. The AO has not applied his mind to the information the basis and the material of the so-called information. The AO acted on vague information. During the original assessment, the assessee furnished all details related to the transactions of all three concern. The AO has no new material or information for reopening. The assessee disclosed true and material things and the return of income and there is no escapement of income of the assessee. The re-opening of the assessment is based on third party information, which was recorded during the search action in their places. The initiation under section 148 of the Act is bad in law being based on statement of third party. The AO has not mentioned any tangible material to prove his contention. On addition, the assessee submitted that he has furnished complete evidentiary proof of purchase consisting of account information of Parvati Exports, Mahalaxmi Gems Pvt. Ltd and Mayur Exports. The copy of purchase bill, one to one mapping and specific sale, stock register, bank statement and ITR acknowledgment of parties were filed before AO. The assessee reiterated that he has not dealt with Bhanwarlal Jai Group and he does not know him as far as transactions of purchase of goods are concerned. The assessee is not aware in which capacity Bhanwarlal Jain is connected with Parvati Exports, Mahalaxmi Gems Pvt. Ltd and Mayur Exports and not knows how he was authorised to give statement on their behalf. There was no corroborative evidence that assessee received accommodation entry. The AO solely relied upon the statement of Bhanwarlal Jain. The assessee stated that the assessee has not received back any cash against the purchase, no corroborative evidence was provided by the AO. The goods purchased from the said parties has been subsequently sold and quantitative tally thereof given in the Tax Audit report which tallies with the books of accounts. Once the sales are accepted, the purchase cannot be doubted. The assessee is maintaining purchase register, sales register, stock register, ledger, day book, bank book and no defects or irregularity was found are noted by the auditors. The statement of third party cannot be relied. The AO disregarded the evidences provided by assessee. The assessee again furnished all the evidences as Page | 7 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 furnished before the AO and reiterated that he is engaged in the business of import, export, trading of cut& polished and rough diamond. The statement of Bhanwarlal Jain was not provided to the assessee. 8.The assessee also relied upon certain case laws as recorded by the ld.CIT(A). The ld.CIT(A) after considering the submission of assessee on the validity of reopening of the assessment held that the assessee is beneficiary of accommodation entry, the entry operator admitted before Investigation Wing about the accommodation entry that he is providing bogus entries to many persons. On the basis of such report, the AO had reason to believe that income has escaped assessment. The ld.CIT(A) held that on examination of record, he noted that AO relied on the report of Investigation Wing without furnishing copy of material relied upon to the assessee. The ld.CIT(A) concluded that in holding assessment as invalid for the above reason without going into merit would be amount to gave undue benefit to the assessee for technical mistake or omission by AO and the principle of equity do not allow this, without considering the grounds on merit. 9. On merit, the ld.CIT(A) after discussing the submission of assessee held that AO has not discussed about any details of books of accounts, documents, stock register produced by assessee during the assessment. The AO neither examined nor found any defect in the document to discredit the same. The assessee has produced day to day stock register, details of purchase and sale. The purchases made during the year are sold during the year as seen from the trading account. If the impugned purchases are treated as bogus, then the stock in hand will become negative from 26.06.2006 onwards and no sale is possible in absence of purchases. The AO relied on the statement of Bhanwarlal Jain recorded by Investigation Wing against, copy of purchase bill, copy of bank statement, showing payment, day to day stock register, incoming and outgoing diamonds and daily stock tally, confirmation of the impugned parties from whom the said purchases has been made, thus, the assessee practically furnished all possible evidences in support of his claim for purchases. Moreover all the payment are made by bank account. The AO has made no comments about these documentary evidences. On the aforesaid observation, the ld.CIT(A) concluded that assessment order suffer from incomplete investigation, lack of marshalling of all relevant facts and procedural loopholes. Similarly, the ld.CIT(A)also observed that there is no denying circumstances under which statement were made by Bhanwarlal Jain and the elaborate modus-operandi unearthed by Investigation Wing, Mumbai, which has created sufficient suspicion regarding the purchase made by the assessee. The said parties are assessed with Central Circle, Mumbai where they are treated as “entry provider” and assessed accordingly. 10.The ld.CIT(A) after referring the decision of Tribunal in Bholanath Poly Fab Private Limited in ITA No.137/AHD/2009 dated 26.07.2011 wherein the addition was sustained to the extent of 12%. The ldCIT(A) by following the observation of order of Tribunal in Bholanath Polyfab Pvt. Ltd.(supra), the ld.CIT(A) held that the assessee may have made purchases from elsewhere and obtained the bills from impugned supplier to inflate Gross Profit Rate. The ldCIT(A) after considering the overall facts, submissions of the assessee and evidences produced by assessee, concluded that the 100% disallowance of purchase is not justified. The ld.CIT(A) also considered the decision of jurisdictional High Court in Mayank Diamonds Pvt. Ltd. reported in [2014] 11 TMI 812 (Guj) (Tax Appeal No.200 of 2003 dated 07.11.2014). The ld.CIT(A) compared the fact of the present case, with the facts in case of Mayank Diamonds (supra) and noted that assessee in that case was also engaged in the trading of polished diamonds. The AO in said case made disallowance of entire bogus purchase. The ld.CIT(A) dismissed the appeal, however, the Tribunal gave partial relief to the assessee directing and sustained the addition @12%. And on further appeal before Hon'ble High Court, the disallowance was sustained at Gross Profit Rate of 5%, which is average rate of profit in industry. The ld.CIT(A) further held that in some other similar cases though he has sustain 5% of Gross Profit Rate considering the fact that where Gross Profit shown by assessee is more than 5%. However, in the present Page | 8 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 case, the assessee has merely shown Gross Profit Rate only at 0.78% of turnover, accordingly, the ld.CIT(A) was of the view that disallowance of 12.5% of impugned purchases/bogus purchases would be reasonable to meet the end of justice, hence the disallowance was restricted to 12.5% of the impugned purchase. 11.Aggrieved by the order of ld.CIT(A), both the parties have filed cross appeals. The assessee has challenged the validity of reopening as well as sustaining the addition to the extent of 12.5% only. Likewise, the Revenue has assailed the order for sustaining addition to the extent of 12.5% only. We have noticed that there is typing mistake in the ground no. 2 of revenue’s appeal wherein the assessing officer has mentioned the additions of ‘5%’ instead of ‘12.5%’. 12.We have heard the submission of ld.CIT-DR for the Revenue and the ld.Authorised Representative(AR) of the assessee. We have also gone through the various documentary evidences furnished by assessee. The ld.CIT-DR for the Revenue supported the order of AO. The ld.CIT-DR submits that Investigation Wing, Mumbai made a search on Bhanwarlal Jain Group. During the search and after search, the Investigation Wing made a thorough investigation and concluded that Bhanwarlal Jain Group and his associates including his sons were indulging in managing about70benami concerns. The benami concerns were engaged in providing accommodation entries. The assessee is one of the beneficiaries of such accommodation entries. In the transaction of accommodation entries, the documentary evidences are created in such a way, so that the bogus transaction is looks like genuine transaction. In bogus transaction, the fabricated evidences are always maintained perfectly. The assessee has obtained accommodation entry only to inflate the expenses and to reduce the ultimate profit. No stocks of diamonds were found at the time of search on Bhanwarlal Jain Group. The assessee has shown a very meagre gross profit (GP) @0.78% and not net profit (NP) at 0.02%. The ld.CIT(A) restricted the addition to the extent of 12.5% which is on the lower side. The ld. CIT-DR for the revenue prayed that disallowance made by the AO may be upheld or in alternative submitted that it may restricted at least @25%, keeping in view that the NP declared by the assessee is extremely on lower side. 13. On the validity of reopening, the ld.CIT-DR for the revenue submits that the AO received credible information about the accommodation entry provided by Bhanwarlal Jain Group. The assessee is one of the beneficiaries, who had availed accommodation entries from such hawala trader. At the time of recording reasons, the mere suspicious about the accommodation entry is sufficient as held by Hon'ble jurisdictional High Court in various cases. To support his submissions, the ld.CIT-DR relied upon the decision;  Pushpak Bullion (P) Ltd Vs DCIT [2017] 85 taxmann.com 84 (Gujarat High Court),  Peass Industrial Engineers (P) Ltd Vs DCIT [2016] 73 taxmann.com 185 (Gujarat High Court),  ITO Vs PurushttomDassBangur [1997} 90 Taxman 541 (SC) and  Mayank Diamond Private Limited (2014) (11) TMI 812 (Gujarat High Court).  AGR Investment Vs Additional Commissioner 197 Taxman 177 (Delhi) and  Chuharmal Vs CIT [1998] 38 Taxman 190 (SC). 14.On the other hand, the ld.AR of the assessee submits that he has challenged the validity of reopening as well as restricting the addition to the extent of 12.50% of the alleged bogus purchases. The ld.AR of the assessee submits during the assessment, the AO has not made any independent investigation. The AO reopened the case of the assessee on the basis of third party information without making any preliminary investigation. The AO received vague information about providing accommodation entry Page | 9 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 by Bhanwarlal Jain Group. No specific information about the accommodation entry obtained by assessee was received by AO. There is no live link between the reasons recorded qua the assessee. Therefore, the re-opening is invalid and all subsequent action is liable to be set aside. 15.On account of additions of bogus purchases, the ld.AR submits that in the original assessment, the assessee filed its complete details of purchases to prove the genuineness of expenses. The AO accepted the same in the assessment order passed under section 143(3) on 10.03.2009. During re-assessment, the assessee again furnished complete details about the genuineness of purchases. The assessee filed confirmation purchases invoices, accounts of the parties, bank statement of assessee showing transaction to the banking channel. The AO has not made any comment on the documentary evidence furnished by assessee. The AO solely relied upon the statement of third party and the report of Investigation Wing. The report of wing and the statement of Bhanwarlal Jain were not provided to the assessee. The AO has not disputed the sales of assessee. No sale is possible in absence of purchase. The books of accounts were not rejected. The AO made the disallowance of entire purchases. The assessing officer not provided cross examination of the alleged hawala dealers. The disallowances sustained by the Ld. CIT(A) @ 12.5% of the impugned purchases, is on higher side and deserve to be deleted in total. The ld.AR of the assessee submits that entire purchases shown by assessee are genuine. In without prejudice and alternative submissions, the Ld. AR for the assessee submits that in alternative submission, the disallowance may be sustained on reasonable basis. To support his various submission, the ld.AR for the assessee is relied upon case laws: 1 M/s Andaman Timber industriesVsCommissioner of Central Excise, CIVIL APPEAL NO. 4228 OF 2006 (Supreme Court) 2 CIT vs. Indrajit Singh Suri [2013] 33 taxmann.com 281 (Gujarat) 3 Albers Diamonds Pvt. Ltd. Vs ITO 1(1)(1), Surat I.T.A. No.776 &1180/AHD/2017 4 The PCIT-5 vs. M/s. Shodiman Investments Pvt. Ltd. TTANO. 1297 OF 2015 (Bombay High Court) 5 ShilpiJewellers Pvt. Ltd. vs. Union of India &Ors. WRIT PETITION NO. 3540 OF 2018 (Bombay High Court) 6 CIT in Vs. Mohmed Juned Dadani 355 ITR 172 (Gujarat) 7 Micro Inks Pvt. Ltd. Vs. ACIT [2017] 79 taxmann.com 153 (Gujarat) 8 Shakti Karnawat Vs. ITO - 2(3)(8), Surat ITA 1504/Ahd/2017 and 1381 /Ahd/2017 9 Asian Paints Ltd. Vs. DCIT, [2008] 296 ITR 90 (Bombay) 10 PCIT, Surat 1 Vs. TejuaRohitkumar Kapadia [2018] 94 taxmann.com 325 (SC) 11 The PCIT-17 vs. M/s Mohommad Haji Adam & Co. ITA NO. 1004 OF 2016(Bombay High Court) 12 Pankaj Kanwarlal Jain HUF Vs. ITO 2(3)(8) Surat ITA.No.269/SRT/2017 16.In the rejoinder submissions the ld. CIT-DR for the revenue submits that that rigour of the rules of evidence contained in the Evidence Act is not applicable before the tax authorities. It was submitted that the ratio of various case laws relied by the ld. AR for the assessee is not applicable on the facts of the present cases. The ratio of decision of Page | 10 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 Hon’ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. 17.We have considered the submissions of the parties and have gone through the order of the lower authorities. We have also deliberated on each and every case laws relied by both the parties. We have also examined the financial statement of all the assessee(s) consisting of computation of income and audit report. We have also gone through the documentary evidences furnished in all cases. Ground No.1 in assessee’s appeal relates to the validity of reopening. The ld AR for the assessee vehemently argued that the AO reopened the case of the assessee on the basis of third party information, and without making any preliminary investigation, which was vague about the alleged accommodation entry by Bhanwarlal Jain Group. And that there was no specific information about the accommodation entry availed by the assessee. There is no live link between the reasons recorded qua the assessee. We find that the assessee has raised objection against the validity of the reopening before the AO. The objections of the assessee was duly disposed by AO in his order dated 09.02.2015. The assessee raised ground of appeal before ld CIT(A) while assailing the order of AO on reopening. The ld CIT(A) while considering the ground of appeal against the reopening held that the AO has received report from investigation wing Mumbai, which indicate that the assessee is beneficiary of the accommodation entry operators. The accommodation entry provider admitted before investigation wing that he has given such entry to various persons; based on such report the AO has reason to believe that the income of the assessee has escaped assessment and thus the action of AO in reopening is justified. 18.We find that the Hon’ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd Vs DCIT (supra) while considering the validity of similar notice of reopening, which was also issued on the basis of information of investigation wing that they have searched a person who is engaged in providing accommodation entries,held that where after scrutiny assessment the assessing officer received information from the investigation wing that well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified in re-opening assessment. Further similar view was taken by Hon’ble Jurisdictional High Court in Pushpak Bullion (P) Ltd Vs DCIT (supra). Therefore, respectfully following the order of Hon’ble High Court, we find that the assessing officer validly assumed the jurisdiction for making re-opening under section 147 on the basis of information of investigation wing Mumbai. So far as other submissions of the ld AR for the assessee that there is no live link of the reasons recorded, we find that the Hon’ble Jurisdictional High Court in Peass Industrial Engineers (P) Ltd clearly held that when assessing officer received information from the investigation wing that two well known entry operators of the country provided bogus entries to various beneficiaries, and assessee was one of such beneficiary, assessing officer was justified. Hence, the ground No. 1 in assessee’s appeal is dismissed. 19. Ground No. 2 in assessee’s appeal and the grounds of appeal raised by the revenue are interconnected, which relates to restricting the disallowance of bogus purchases to the extent of 12.5%. The AO made of 100% of purchases shown from the hawala dealers/ entry provider namely Bhanwarlal Jain. We find that the AO while making additions of 100%, of disputed purchases solely relied on the report of the investigation wing Mumbai. No independent investigation was carried by the AO. The AO has not disputed the sale of the assessee. The AO made no comment on the evidences furnished by the assessee. We further find that ldCIT(A), while considering the submissions of the assessee accepted the lapses on the part of the AO and noted that no sale is possible in absence of purchases. The Books of the assessee was not rejected by the AO. The ldCIT(A) on further examination of the facts and various legal submissions find that Ahmedabad Tribunal in Bholanath Poly Fab Private Limited (supra) held that in the such cases the addition of bogus purchases was sustained to the extent of 12%, on the observation that Page | 11 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 the assessee may have made purchases from elsewhere and obtained the bills from impugned supplier to inflate Gross Profit Rate. The ld CIT(A) by considering the overall facts, concluded that the 100% disallowance of purchase is not justified. We also find that the ld.CIT(A) also considered the decision of jurisdictional High Court in Mayank Diamonds Pvt. Ltd. (supra) and compared the fact of the present case with the facts in Mayank Diamonds Pvt Ltd (supra) and noted that assessee in that case was also engaged in the trading of polished diamonds. The ld CIT(A) noted that in that case the AO made disallowance of entire bogus purchase and on first appeal ore CIT(A) the disallowances were maintained. However, the Tribunal gave partial relief to the assessee directing to sustain the addition @12% of such bogus purchases. And on further appeal, the Hon'ble High Court sustained Gross Profit Rate @ 5% being average rate of profit in industry. 20. Now adverting to the facts of the present case, the ld.CIT(A) held that in some other similar cases; though he had sustain 5% of Gross Profit Rate, considering the fact that where Gross Profit shown by those assessee’s are more than 5%. However, in the present case, the assessee has merely shown Gross Profit Rate only at 0.78% of turnover, accordingly, the ld.CIT(A) was of the view that disallowance of 12.5% of impugned purchases/bogus purchases would be reasonable to meet the end of justice. 21. We have seen that during the financial year under consideration the assessee has shown total turnover of Rs.66,09,62,458/-. The assessee has shown Gross Profit @ .78% and net Profit @ .02% (page 11 of paper Book). The assessee while filing the return of income has declared taxable income of Rs.1,81,840/- only. We are conscious of the facts that dispute before us is only with regard of the disputed purchases of Rs, 4.34 Crore, which was shown to have purchased from the entity managed by Bhanwarlal Jain Group. During the search action on Bhanwarlal Jain no stock of goods/ material was found to the investigation party. Bhanwarlal Jain while filing return of income has offered commission income (entry provider). Before us, the ld CIT-DR for the revenue vehemently submitted that the ratio of decision of Hon’ble Gujarat High Court in Mayank Diamond Private Limited (supra) is directly applicable on the facts of the present case. We find that in Mayank Diamonds the Hon’ble High Court restricted the additions to 5% of GP. We have seen that in Mayank Diamonds P Ltd (supra), the assessee had declared GP @ 1.03% on turnover of Rs. 1.86 Crore. The disputed transaction in the said case was Rs. 1.68 Crore. However, in the present case the assessee has declared the GP @ 0.78%. It is settled law that under Income-tax, the tax authorities are not entitled to tax the entire transaction, but only the income component of the disputed transaction, to prevent the possibility of revenue leakage. Therefore, considering overall facts and circumstances of the present case, we are of the view that disallowances @ 6% of impugned purchases / disputed purchases would be sufficient to meet the possibility of revenue leakage. In the result the ground No. 2 of appeal raised by the assessee is partly allowed and the grounds of appeal raised by revenue are dismissed.” 9. Since the issue raised in Revenue’s appeal is squarely covered by the order of Co-ordinate Bench, in the case of Pankaj K Choudhary (supra) and there is no change in facts and law and the Revenue as well as assessee are unable to produce any documents to controvert the aforesaid findings of Co-ordinate Bench, in the case of Pankaj K Choudhary (supra). We find no reason to interfere in the said order of Co-ordinate Bench, therefore respectfully following the binding order of Co-ordinate Bench we allow Revenue’s appeal partly with same direction. Page | 12 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 10. In the result, Revenue’s appeal is allowed partly. 11. Now, we shall adjudicate assessee’s Cross Objection No. 13/SRT/2020, wherein the grounds raised by assessee are as follows: “1. On the facts and circumstances of the case and law, the Ld. CIT(A) erred in confirming disallowance of Rs.73,28,630/- being 5% of suspicious purchase amount Rs.14,65,72,642/- by treating the same as non-genuine. 2. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to consider that addition cannot be made without issuing enhancement notice specially when the addition under section 68 was deleted as the provision of section 68 not applicable on closing balance of sundry creditors arises due to purchases. 3. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to consider that addition cannot be made without mentioning the section under which provision addition was made. 4. On the facts and circumstances of the case and law, the Ld. CIT(A) failed to consider that assessment order was passed without furnishing the material, evidenced and opportunity of cross-examination to the respondent. This is gross violation of principal of Audit Alteram partem rendering the order to be bad in law liable to be quashed. 5. Without prejudice to above, the Ld. CIT(A) has erred in assessing the impugned bogus purchase and without having considered the sales made to the same parties amounting to Rs.3,18,39,900/- during AY 2014-15 and Rs.5,28,43,984/- in subsequent years. Hence the addition cannot be made solely for purchases since the Ld. CIT by implication held that sales to be same parties are genuine.” 12. At the outset, Ld. Counsel for the assessee contended that Assessing Officer has made the addition under wrong section of the Income Tax Act, that is, under section 68 of the Act, on account of unverifiable purchases. Therefore, the addition made u/s 68 is not sustainable in law. On appeal, CIT(A) corrected the mistake of “Section” without providing opportunity of hearing to the assessee, therefore order passed by ld CIT(A) may be quashed. On the other hand, Ld DR for the Revenue submits before us that during appellate proceedings, the assessee has raised this issue before ld CIT(A) and after considering assessee`s submission, the ld CIT(A) has passed the order. 13. We have heard both the parties and perused the material available on record. We note that during the appellate proceedings, the ld CIT(A) has Page | 13 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 considered the submission of the assessee and stated that assessee`s case belong to Rajendra Jain group cases and in case of Gotum Jain group case/Bhanwar Lal Jain, the substance of the transactions are that they relate to bogus purchases. The matter discussed by the AO in the assessment order was related to bogus purchases therefore ld CIT(A) corrected unintentional mistake committed by AO that is, corrected the mistake of quoting wrong section. We note that just to quote “wrong section” while making an assessment order does not vitiate the findings of the entire assessment order. The ld CIT(A) has co-terminus power as that of assessing officer and to correct the mistake of section as per the substance discussed in the assessment order does not mean enhancement of assessment without giving notice to the assessee. That is, when the substance of the transactions, as discussed in the assessment order by the assessing officer are in the nature of bogus purchases, then it would not mean enhancement of assessment, and just because ld CIT(A) made correction in the section in accordance with the substance discussed in the assessment order does not vitiate the appellate order. For this, reliance can be placed on the judgment of the Hon`ble Supreme Court in the case of Navinchandra Mafatlal v CIT [1955] 27 ITR 245, 261, affirmed, [1961] 42 ITR 53 (SC), wherein it was held as follows: “If an order is made by an income-tax Officer and even though he may state that he has not made it under any particular section of the income-tax Act, or even if he may state that he has made it under a particular section, it is for us to decide which is the proper provision of the law under which such an order should have been made.” Therefore, respectfully following the judgment of Hon'ble Supreme Court in the case of Navinchandra Mafatlal (supra) we dismiss the ground no.2 and 3 raised by the assessee. 14. In ground Nos. 1, 4 and 5 of Cross objections, the assessee contended that assessee was not given opportunity of cross examination and order passed by the ld CIT(A) on merit is not in accordance with law. We note that all these issues are discussed in the order of Co-ordinate Bench, in the case of Pankaj K. Choudhary (supra), therefore we dismiss ground Nos. 1, 4 and 5 of Cross objections. Page | 14 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 15. In the result, cross objection filed by the assessee is dismissed. 16. Now we shall take assessee’s appeal in ITA No.313/SRT/2019, wherein grounds of appeal raised by assessee are as follows: “1. The Ld. CIT erred in passing the order under section 263 of the Act, inspite of the fact that the assessment order was neither erroneous nor prejudicial to the interest of the revenue. 2. The appellant craves leave to add, alter, amend, modify or delete any of the aforesaid grounds of appeal.” 17. By way of this appeal, the assessee appellant has called into question correctness of impugned order passed by the learned Principal Commissioner of Income Tax, under section 263 of the Income tax Act, 1961, vide order dated 22.03.2019. 18. Succinct facts qua the issue are that assessee-company was engaged in business of purchase and sale of rough and polished diamonds. During the year under consideration, assessee filed return of income declaring total income of Rs.26,69,863/-. The case of assessee was selected for scrutiny and AO framed the assessment order under section 143(3) of the Act, on 23.12.2016, determining total income at Rs.11,74,02,610/- on account of unexplained cash credit u/s 68 of the Act. 19. Later on, Learned Principal Commissioner of Income Tax,(ld PCIT) exercised his jurisdiction under section 263 of the Income tax Act, 1961. On perusal of scrutiny records, it was observed by ld PCIT that long term loans were given by the assessee to various persons as per Note 9 to the balance sheet which stands at Rs.81.49 crores as on 31.03.2015. These persons appear to be related to the assessee-company and also no interest receipt in respect of these long term loans given was shown. Therefore, applicability of section 2(22)(e) of the Act was necessarily required to be verified which was not done during the course of assessment proceedings. Page | 15 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 20. Further, ld PCIT noticed that there was gross disproportions between the figures of foreign exchange rate fluctuation loss and fluctuation gain vis-à-vis the corresponding export and import. Therefore, the correctness of the loss claimed on this account was required to be verified for thoroughly which was not done during the course of assessment proceedings. 21. In response to the aforesaid show cause notice, assessee filed written submission and contended therein that order of the AO is neither erroneous nor prejudicial to the interest of Revenue as Section 2(22)(e) apply in the hands of shareholder who received loan whereas in this case the assessee-company had given the loan and advances to those persons who are not shareholders of its. Further, in respect of issue of Forex gain loss, it has been contended that sale against “H” from as export sale has been wrongly treated which actually means sales to domestic customer who will export the goods. 22. However, after considering assessee`s submission, the ld PCIT held that assessment order in assessee’s case u/s 143(3) for the year under consideration for A.Y 2014-15 passed on 23.12.2016 is erroneous and prejudicial to the interest of Revenue. Therefore, the assessment order u/s 143(3) dated 23.12.2016 in the instant case was set aside by ld PCIT with the direction to AO to frame the assessment de novo only to the extent of examining the issues of applicability of Section 2(22)(e) of the Act and issue of correctness of claim of Forex gain loss after making proper enquiries on these issues. 23. Aggrieved by the order of Ld. PCIT, the assessee is in appeal before us. 24. Learned Counsel for the assessee argued before us that Ld. PCIT has exercised his jurisdiction u/s 263 of the Act, on account of loan given to related parties u/s 2(22)(e) of the Act whereas section 2(22)(e) of the Act does not apply to the loan given to the parties, rather it applies to advance given to the parties/shareholders. The Ld. Counsel for the assessee also contended that there is no Forex gain or loss in the case of assessee under consideration because sales are Page | 16 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 against ‘H’ form. Therefore, jurisdiction exercised u/s 263 of the Act, by Ld. PCIT is bad in law. 25. On the other hand, Ld. CIT-DR for the Revenue submitted that assessee received Forex gain because assessee is a deemed exporter. Ld. CIT-DR also pointed out that Ld. PCIT has not given a specific direction to make addition but Ld.PCIT only directed the Assessing Officer to examine the issue afresh about loan and advances given by assessee and Forex gain/loss. These issues have not been examined by the Assessing Officer. The fact that the parties to whom loan and advances were given, whether they were shareholders or creditors, is not clear which was not examined by assessing officer. Moreover, about the issues raised by ld PCIT, assessing officer has not raised any question by way of issuing notice under section 142(1) of the Act nor assessee has replied it during assessment stage. Therefore Ld. PCIT has exercised his jurisdiction power u/s 263 of the Act hence his order should be upheld. 26. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld PCIT and other materials brought on record. We find merit in the submissions of ld DR for the Revenue, as he pointed out that parties to whom loan and advances were given, whether they were shareholders or creditors, is not clear, therefore contention of the ld Counsel can not be accepted that assessee has given loan not to the shareholders but creditors, as the assessing officer did not make inquiry to this effect. Moreover, about the issues raised by ld PCIT, assessing officer has not raised any question by way of issuing notice under section 142(1) of the Act nor assessee has replied to it during assessment stage. Therefore, it is a complete failure on the part of the assessing officer, as he did not apply his mind. The ld PCIT observed that long term loans were given by the assessee-company to various persons who appear to be related to the assessee-company and also no interest receipt in respect of these loans was shown. Therefore, provision of Section 2(22)(e) of the Act attracted in the assessee`s case which reads as under: Page | 17 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 “According to Section 2(22)(e ) of the Act when a company in which the public are not substantially interested, extends a loan or an advance to; a. Any of its shareholders who has more than 10% voting power in the company or b. To any concern in which such shareholder is substantially interested or c. For the individual benefit of such shareholder or d. On behalf of such shareholder To the extent the company has accumulated profits such payment would be deemed as a dividend u/s 2(22)(e) 27. From the above section 2(22)( e ) of the Act, it is clear that it applies to loan or an advance, therefore we do not agree with ld Counsel that section 2(22) (e) does not apply to loan. The ld PCIT observed that long term loans and advances received by the assessee-company from earlier Rs.5,85.000/- only. In contrast the long- term loans given by the assessee-company to various persons as per note 9 to the balance sheet stand at Rs.81.49 crores as on 31.03.2015. These persons appear to be related to the assessee-company. Moreover, no interest receipt in respect of these long term loans given has been shown. It is also noticed that the assessee- company during the year under consideration has given loans to various persons/entities the assessee had not received any interest. The AO concerned should had to examine the following points to invoke the applicability of Section 2(22)(e) of the Act. We note that during assessment stage, the AO has not issued any notice under section 142(1) to conduct inquiry on the above issues raised by ld PCIT nor assessee has replied. We have gone through the assessment order passed under section 143(3) and noted that there is no any discussion or adjudication on the issue raised by the ld PCIT, hence order passed by the assessing officer is erroneous and prejudicial to the interest of revenue. 28. We note that ld PCIT raised the following issues in his revision order: i. AO needs to go through the payments made by a closely held company i.e. analysis of balance sheet of the company. ii. Payment made to a person by the company should be beneficial owner of shares i.e. holding not less than 10% of the voting power or to any concern in which such shareholder is a member of partner. Holding of 10% voting power in a closely held company mean holding not less than 10%of equity shares, either in individual capacity or in addition to Page | 18 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 voting power s a Karta of HUF or on behalf of a mine Shareholding pattern in the holding company is of utmost importance. Similarly, ascertaining the profit ratio in concern where shareholder is a member or partner to have substantial interest is also equally important. iii. It should be confirmed that company making payment of loan/advance is a closely held company and its shareholders holding 10% or more voting power should also old substantial interest in such concern. iv. In case loans/advances including ICD/Deposits etc are made to shareholders/concerns in which shareholders have substantial interest or made on behalf of shareholders, then investigation should be made to ascertain the incidence of “Deemed Dividend” v. The closely held company should have accumulated profits which includes reserves and also include proportionate profit of the profit of the whole year. vi. All the factual details i.e. shareholding pattern of closely held company status of recipient of loan/advance i.e. beneficial shareholder either in individual capacity or as a member/partner of a concern, quantum of accumulated profits should be clearly mentioned in the body of assessment order. 29. None of the above issues has been examined by the AO. The ld PCIT noted that it was required to be examined during the course of assessment proceedings as to whether or not Long term loans given by the assessee-company to various persons as per note 9 to the balance sheet which stands at Rs.81.49 crores as on 31.03.2015 qualify for deemed dividend u/s 2(22)(e) of the Act. However, the AO concerned had not carried out any investigation during the course of assessment proceedings regarding these facts; therefore these issues required examination. Further, it was not clear whether the parties to whom loans and advances given, were shareholder or creditor, therefore AO failed to conduct necessary inquiry. 30. Further, it is also noticed that sales against H Form i.e. export sales during the year of Rs.30.47 crores. Rest of the sales is local sales. ‘H’ form is the Page | 19 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 certificate issued by Sales tax/VAT department as proof of export. Only register dealer who exports the goods outside Indian can get H form. Against these export sales, profit on account of fluctuation in exchange rates is shown at Rs.64.80 lakhs import of cut & polished diamonds during the year of Rs.33.71 crores. As against this import, loss in account of fluctuation in exchange rates is claimed at Rs.3.92 crores. In view of the above gross disproportions between the figures of foreign exchange rate fluctuation loss and fluctuation gain vis-a-vis the corresponding export and import, the correctness of this account was required to be verified for thoroughly which was not done during the course of assessment proceedings therefore order passed by the assessing officer is erroneous and prejudicial to the interest of revenue. It is also to be noted that ld Counsel, during the course of hearing stated that assessee is not exporter, however, on examination of Balance Sheet of the assessee, the ld PCIT noticed that assessee has shown foreign exchange gain/loss in its Balance Sheet therefore if the assessee is not exporter then wherefrom these foreign exchange gain and loss arised in the Balance Sheet. Hence, we are of the view that assessing officer failed to conduct inquiry. Reliance is also placed in the decision of the Hon'ble High Court of Delhi in the case of CIT vs. Nagesh Knitwers P. Ltd and others (2012) 345 ITR 135 (Del) wherein it has been held that when the AO has allowed claim of the assessee in a slipshod manner without conducting any inquiry, then in the case of no inquiry, the assessment order is not only erroneous but also prejudicial to the interest of revenue. The order of assessment has to be a speaking order and when the fact of others view has not been mentioned and the claim of expenses pressed by the assessee has been allowed without making any inquiry, then the order must be held as erroneous and prejudicial to the interest of revenue. Hon'ble High Court has also considered ratio of earlier decisions viz. decisions of Hon'ble Apex Court in the case of Rampyari Devi Sarogi vs CIT (1968) 67 ITR 84(SC), Tara Devi Aggarwal vs. CIT (1973) 88 ITR 323 (SC) and the decision in the case of Malabar Industrial Company Ltd vs. CIT, 243 ITR 83 (SC) and decisions of Hon'ble Jurisdictional High Court of Delhi in the case of Gee Vee Enterprises vs. ACIT (supra) while passing the order in favour of the revenue in the case of CIT vs. Nagesh Knitwears Pvt. Ltd. (supra). Therefore, based on these facts and Page | 20 ITA.128/SRT/2020 & CO.13/SRT/2020 & ITA No.313/SRT/2019 AY.2014-15 circumstances, we uphold the order passed by ld PCIT under section 263 of the Act, dated 22.03.2019 and dismiss the appeal of the assessee. 31. In the result, appeal filed by the assessee in ITA No.313/SRT/2019, is dismissed. 32. In combine result, Revenue`s appeal in ITA No.128/SRT/2020 is partly allowed whereas assessee`s CO No.13/SRT/2020 as well as assessee`s appeal in ITA No.313/SRT/2019 are dismissed. Registry is directed to place one copy of this order in all appeals folder/case files. Order is pronounced in the open court on 14/07/2022 by placing the result on the Notice Board as per Rule 34(5) of the Income Tax (Appellate Tribunal) Rule 1963. Sd/- Sd/- (PAWAN SINGH) (Dr. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER lwjr /Surat Ǒदनांक/ Date: 14/07/2022 Dkp Outsourcing Sr.P.S Copy of the Order forwarded to 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Surat 6. Guard File By Order // True Copy // Assistant Registrar/Sr. PS/PS ITAT, Surat