ORBIT DIAMONDS,KOCHI V. ITO, WARD-2(3), THRISSUR

ITA 868/COCH/2025

AI Insights

The case involves Orbit Diamonds, a partnership firm engaged in the business of manufacturing and selling jewelry, which appealed against the order of the National Faceless Appeal Centre, Delhi, for the Assessment Year 2018-19. The dispute arose from the AO's addition of Rs. 1,93,620 to the appellant's income, applying a GP rate of 12.5% on purchases made from Chamak Impex LLP, which was alleged to be involved in providing accommodation entries of bogus purchases. The CIT(A) upheld the AO's decision, leading to the present appeal before the Tribunal. The Tribunal criticized the AO's reliance on the general information about Chamak Impex LLP without specific findings on the appellant's detailed submissions, leading to the restoration of the matter for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 790205 (ITAT-COCHIN)
• Duration Of Justice: 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 18-11-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NEETHU S.
• Assessee Lawyers: ANJANA A.
• Keywords: Bogus purchase; Accommodation entries; Bogus
• Section: 147

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 868/Coch/2025 Assessment Year: 2018-19 Orbit Diamonds .......... Appellant 8B, Santhi Savera, Warriam Road, Kochi [PAN: AAFFO6176N] vs. The Income Tax Officer, WD-2(3), Thrissur .......... Respondent Assessee by: Smt. Anjana A., Advocate Revenue by: Ms. Neethu S. Sr. DR Date of Hearing: 27.11.2025 Date of Pronouncement: 28.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 19.09.2025 for Assessment Year (AY) 2018-19. 2. Brief facts of the case are that the appellant is a partnership firm engaged in the business of manufacturing and sale of jewellery. The return of income for AY 2018-19 was filed on 31.10.2018 disclosing total income of Rs. 12,78,040/-. Against the said return of income, the assessment was completed by the Assessment Unit of Income Tax Department (hereinafter called \"the AO\") vide order dated 05.03.2024 passed u/s. 147 r.w.s. 144B of the Income Tax Printed from counselvise.com 2 ITA No. 868/Coch/2025 Orbit Diamonds Act, 1961 (the Act) at total income of Rs. 14,71,660/-. While doing so, the AO found that the appellant had made purchase of diamonds to the tune of Rs. 15,98,964/- from one firm namely M/s. Chamak Impex LLP. According to the AO, the said firm was engaged in providing accommodation entries of bogus purchases and the appellant is a beneficiary of such entries, AO rejecting the contention of the appellant that such purchases were genuine purchases The AO made addition of Rs. 1,93,620/- applying the GP rate of 12.5% on such purchases. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 4. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 5. I heard the rival contentions and perused the material available on record. The issue in the present appeal is whether the purchases made by the appellant firm from Chamak Impex LLP are genuine or not. During the course of assessment proceedings the appellant had filed details of purchases made by the appellant from the said form. The AO had not given any finding as to how the details filed by the appellant are not true and correct. The AO has chosen to make the addition merely based on the information that the Chamak Impex LLP is providing accommodation entries of bogus purchases. In my considered view the approach adopted by the AO is not tenable in Printed from counselvise.com 3 ITA No. 868/Coch/2025 Orbit Diamonds the eyes of law. Therefore, the matter is restored back to the file of AO for de novo assessment in accordance with law after affording reasonable opportunity of hearing to the appellant. 6. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 28th November, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 28th November, 2025 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "