Shri Snehal Rohit Jhaveri vs. Income Tax Officer-Ward 19(3)(4)

Parties Involved

Facts Summary

The assessee, Shri Snehal Rohit Jhaveri, is a trader of cut and polished diamonds. He filed his income return on 07.09.2011, declaring a total income of Rs.10,51,210/-. The return was processed under section 143(1) of the Income Tax Act, 1961 on 14.10.2011. Later, the assessee filed a revised return on 03.10.2012, declaring a total income of Rs.10,34,890/-, which was processed on 23.01.2013. Based on a search and survey action conducted by the DGIT(Inv.), Surat, it was revealed that the assessee had obtained accommodation entries from hawala entities, including M/s. Krishna Diam, for the assessment year under consideration. The Assessing Officer added Rs.6,62,00,777/- to the assessee's total income, which the assessee contested before the Commissioner of Income Tax (Appeals), claiming that the total purchases from M/s. Krishna Diam were Rs.3,92,92,169/- and not Rs.6,62,00,777/-. The Commissioner upheld the addition by the Assessing Officer, leading to the assessee's appeal to the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the total purchases from M/s. Krishna Diam were Rs.3,92,92,169/- or Rs.6,62,00,777/-?
• 2. Whether the addition on account of bogus purchases should be made at 100% or only the profit element embedded therein?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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