Gem Exports through its partner Shri Akshat Ghiya V. The Assistant Commissioner of Income Tax, Circle-1

ITA/597/2011

AI Insights

The case involves M/S Gem Exports, represented by Shri Akshat Ghiya, appealing against the judgments of the Income Tax Appellate Tribunal, which had partly allowed their appeal concerning the genuineness of certain purchases. The primary legal question was whether the Tribunal was correct in law to hold that the purchases amounting to Rs.3,28,67,126 and Rs.2,61,18,135 from various parties were non-genuine or bogus, despite all transactions being detailed, verifiable, and involving assessed sellers with payments made through A/c Payee Cheques. The High Court of Rajasthan, referencing decisions from the Supreme Court and other High Courts, remitted the matter back to the Assessing Officer to verify the transactions' genuineness based on established legal precedents.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 687670 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 19-07-2017
• Assessment Year: misc
• Other Referred Cases: CIT, Jaipur-II, Jaipur Vs. M/s Aditya Gems, Vijay Proteins Ltd. Vs. Commissioner of Income Tax, Sanjay Oilcake Industries Vs. Commissioner of Income Tax, N.K. Industries Ltd. Vs. Dy. C.I.T.
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ANUROOP SINGHI
• Keywords: Assessing Officer; Bogus transactions; Income tax appellate tribunal; Non-genuine purchases
• Section: 234/2008; 8956/2015; 240/2003

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 597 / 2011 M/S Gem Exports through its partner Shri Akshat Ghiya S/o Shri Brijesh Ghiya, 103, Ridhi Sidhi, Ahimsa Circle, ‘C’-Scheme, Jaipur in the state of Rajasthan ----Assessee-Appellant Versus The Assistant Commissioner of income tax, Circle-1, Having it’s office at Central Revenue Building, Statue Circle, Bhagwan Das Road, Jaipur in the state of Rajasthan. ----Respondent-Other party Connected With D.B. Income Tax Appeal No. 605 / 2011 M/S Gem Exports through its partner Shri Akshat Ghiya S/o Shri Brijesh Ghiya, 103, Ridhi Sidhi, Ahimsa Circle, ‘C’-Scheme, Jaipur in the state of Rajasthan ----Assessee-Appellant Versus The Assistant Commissioner of income tax, Circle-1, Having it’s office at Central Revenue Building, Statue Circle, Bhagwan Das Road, Jaipur in the state of Rajasthan. ----Respondent-Other party _____________________________________________________ For Appellant(s) : None present. For Respondent(s) : Mr. Anuroop Singhi _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 19/07/2017 1. In both these appeal common question of law and facts are involved hence they are decided by this common judgment. 2. By way of these appeals, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has (2 of 3) [ITA-597/2011] partly allowed the appeal of the assessee. 3. This court while admitting the appeals framed following substantial question of law:- 3.1 DB ITA No. 597/2011 admitted on 25.4.2012 “Whether on the facts, the learned Income Tax Appellate Tribunal was right in law in holding that purchases of Rs.3,28,67,126/- made by the appellant from various parties are non-genuine/bogus when all purchases are vouched detailed verifiable & all sellers are assessed to Income-Tax, assessed to Sales-tax & payments were by A/c Payee Cheques?” 3.2 DB ITA No. 605/2011 admitted on 25.4.2012 “Whether on the facts, the learned Income Tax Appellate Tribunal was right in law in holding that purchases of Rs.2,61,18,135/- made by the appellant from various parties are non- genuine/bogus when all purchases are vouched detailed verifiable & all sellers are assessed to Income-Tax, assessed to Sales-tax & payments were by A/c Payee Cheques? 3.1 It is not in dispute that controversy involved in this case is squarely covered by the decision of this Court in CIT, Jaipur-II, Jaipur Vs. M/s Aditya Gems, D.B. Income Tax Appeal No. 234/2008, decided on 2.11.2016, wherein it has been held as under: “Considering the law declared by the Supreme Court in the case of Vijay Proteins Ltd. Vs. Commissioner of Income Tax, Special Leave to Appeal (C) No.8956/2015 decided on 06.04.2015 whereby the Supreme Court has dismissed the SLP and confirmed the order dated 09.12.2014 passed by the Gujarat High Court and other decisions of (3 of 3) [ITA-597/2011] the High Court of Gujarat in the case of Sanjay Oilcake Industries Vs. Commissioner of Income Tax (2009) 316 ITR 274 (Guj) and N.K. Industries Ltd. Vs. Dy. C.I.T., Tax Appeal No.240/2003 decided on 20.06.2016, the parties are bound by the principle of law pronounced in the aforesaid three judgments. 4. We remit back the case to the Assessing Officer for deciding afresh on the factual matrix. The authority will accept the law but the transaction whether it is genuine or not will be verified by the Assessing Officer on the basis of the aforesaid three judgments.” 4. The issue is answered in favour of the department. The matters are remitted back to the Assessing Officer. It will be open for the asseessee to raise all contentions including opportunity of cross-examination before the Assessing Officer. The appeals stand disposed of. A copy of this order be placed in each file. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Bmg/54-55. "