ITA Nos. 1882 & 1883/Del/2021 :Asstt. Years: 2011-12 & 2012-13

Parties Involved

Facts Summary

The assessee, Jagat Agro Commodities Pvt. Ltd., is a partnership firm engaged mainly in the business of trading rice and a small percentage of trading paddy. It filed its return of income on 27.9.2011 declaring a total income of Rs. 6,75,76,760/-. A search and seizure operation was conducted by the Investigation Wing in Jagat Group of Cases on 14.09.2010. The scrutiny assessment was completed on 28.3.2013 at a total income of Rs. 9,22,81,070/- after making various additions. A survey operation was conducted on 09.03.2016 in the case of Sh. Sant Lal Aggarwal, Director of the assessee company, and certain incriminating documents were impounded. Based on this information, the AO reopened the assessment proceedings and issued a notice on 30.03.2018. The AO concluded that the purchases of Rs. 34,03,30,389/- made by the assessee were from non-existent/entry operator entities and added 100% of this amount to the total income of the assessee. Against this action, the assessee preferred an appeal before the Ld. CIT(A), who partly allowed the appeal. Aggrieved, the Revenue is in appeal before the Tribunal.…

Legal Issues

• 1. Whether the Ld. CIT(A) has erred in restricting the addition of Rs. 34,03,20,389/- made by the AO to Rs. 2,38,22,427/- by estimating GP @7% as done by AO, without appreciating the fact that investigation wing has found that during search and survey in the case of the entry operators who have given entries to the assessee were engaged in providing accommodation entries through non-genuine purchase and non-genuine sales to the assessee.
• 2. Whether the Ld. CIT(A) has erred in restricting the additions made by the AO without appreciating the fact that the assessee must be raising non-genuine purchase and non-genuine sale bills to evade its true income and earning income at a higher rate.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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