IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.776 OF 2008 INCOME TAX APPEAL NO.776 OF 2008 INCOME TAX APPEAL NO.776 OF 2008 The CIT-13 .. Appellant Vs. Pradeep M.Upadhyay .. Respondent Mr.A.Shivsharan for the Appellant. Mr.A.K.Jasani for the Respondent. CORAM :- DR.S.RADHAKRISHNAN & CORAM :- DR.S.RADHAKRISHNAN & CORAM :- DR.S.RADHAKRISHNAN & V.C.DAGA, JJ. V.C.DAGA, JJ. V.C.DAGA, JJ. DATE : 26th November, 2008 DATE : 26th November, 2008 DATE : 26th November, 2008 P.C. P.C. P.C. 1. By this Appeal the Appellant is seeking to raise the following question of law:- "Whether in the facts and circumstances of the case and in law the Tribunal is right in deleting the additions made by the Assessing Officer, only on the ground that in the appeal filed by Kartik Exports and Galaxy Exports, the Tribunal had held that the transactions in questions are non-hawala transactions ignoring the detailed report of the Investigation Unit? " 2. Perused the Tribunal’s order. In paragraph No.4 the Tribunal has observed as under:- " After hearing both the parties, we find that the Tribunal, Mumbai Bench, vide order dated 31.1.2005, has decided the appeal in the case of M/s.Galaxy Exports, alongwith various other assessees. Various issues were framed by the Tribunal out of which issue No.(iii) was as under:- "(iii) In the absence of any material or evidence found as a result of search and trading transactions shown in respective returns filed before search, holding of purchase and sale transactions in diamonds as accommodation entries and earning of commission thereon is merely on suspicion, surmises and conjectures. The addition needs to be deleted." The above issue was decided in Para-57 of the order by holding as under: "In view of our discussions made above and considering all the facts and circumstances of the cases in hand, we find no jusfification for the additions in these block assessments made by the Assessing Officer, as undisclosed income of assessee by treating the transactions as hawala transactions and inferring the assessee to have earned hawala income thereon, and in turn estimating the hawala income at 10% of turnover, which the learned CIT(A) reduced to 8% and attributed to various concerns by bifurcation thereof. We therefore, delete these additions of undisclosed income made/sustained in the hands of all these assessees. We order accordingly." In view of the above finding of the Tribunal, it cannot be said that M/s.Galaxy Exports was indulging in hawala transactions. Consequently, it has to be held that sales effected by the assessee to M/s.Galaxy Exports was genuine as there is no other evidence against the assessee. Mere suspicion howsoever grave cannot be the basis for making addition. Thus, following the decision of the Tribunal in the case of M/s.Galaxy Exports, we uphold the order of the learned CIT (A). " 3. Thus, in view of the aforesaid finding of fact, we do not find any substantial question of law involved in this Appeal. Appeal stands dismissed. (V.C.DAGA,J.) (DR.S.RADHAKRISHNAN,J.) (V.C.DAGA,J.) (DR.S.RADHAKRISHNAN,J.) (V.C.DAGA,J.) (DR.S.RADHAKRISHNAN,J.)