ACIT, Jaipur V. BAL KISHAN AGARWAL, Jaipur

ITA 1051/JPR/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 47939 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 16-08-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

1 ITA 1051-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 1051/JP/2010 ASSTT. YEAR : 2007-08. THE ACIT, CIRCLE-5, VS. SHRI BAL KISHAN AGARWAL, JAIPUR. PROP. M/S. KBN JEWELLERS, 400-401, NARNOLI MANSION, SANGANERI GATE, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SANJAY KUMAR RESPONDENT BY : NONE (ADJ. APPLICATIO N REJECTED) ORDER DATE OF ORDER : 10/06/2011. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. THE DEPARTMENT IS OBJECTING IN RESTRICTING THE T RADING ADDITION TO RS.35,061/-AS AGAINST ADDITION OF RS. 11,70,441/-MADE BY AO BY DI SALLOWING 25% OF UNVERIFIABLE PURCHASES BY PLACING RELIANCE ON THE DECISION OF HO NBLE GUJARAT HIGH COURT IN THE CASE OF M/S. SANJAY OIL CAKE INDUSTRIES, 10 DTR 153 (GUJ .). 3. SINCE CERTAIN PURCHASES REMAINED UNVERIFIABLE AN D IN VIEW OF THE INFORMATION RECEIVED FROM BCTT WING AND INVESTIGATION WING OF T HE DEPARTMENT, THE AO REJECTED THE BOOKS OF ACCOUNT AND DISALLOWED 25% OF UNVERIFI ABLE PURCHASES AND MADE THE IMPUGNED ADDITION. IT WAS SUBMITTED BEFORE LD. CIT (A) THAT COMPLETE DETAILS INCLUDING 2 PROPER INVOICES AND PAN NUMBER AND SALES TAX REGIST RATION NUMBER WERE FILED. PAYMENT HAS BEEN MADE THROUGH ACCOUNT PAYEE CHEQUE. THEREFORE, REJECTION OF BOOKS OF ACCOUNT AS WELL AS DISALLOWING THE 25% OF UNVERIFIA BLE PURCHASES WAS NOT JUSTIFIED. RELIANCE WAS PLACED ON VARIOUS DECISIONS INCLUDING ITAT JAIPUR BENCH DECISION IN CASE OF GEM PARADISE. 4. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, THE LD. CIT (A) FOUND THAT THE AO WAS NOT JUSTIFIED IN MAKING T HE ADDITION @ 25% OF UNVERIFIABLE PURCHASES. THE LD. CIT (A) FURTHER OBSERVED THAT D ECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SANJAY OIL CAKE INDUSTRIES (SUPRA) A ND IN THE CASE OF VIJAY PROTEINS LTD. HAVE BEEN FOUND DISTINGUISHABLE BY THE TRIBUNAL IN THE CASE OF GEM PARADISE. THEREAFTER THE LD. CIT (A) OBSERVED THAT G.P. RATE SHOWN BY AS SESSEE IS 22.69%, THEREFORE, LD. CIT (A) WAS OF THE VIEW THAT IF A G.P. RATE OF23% IS AP PLIED THEN IT WILL MEET THE ENDS OF JUSTICE. ACCORDINGLY HE REDUCED THE ADDITION TO RS . 35,061/-. 5. NOW THE DEPARTMENT IS IN APPEAL HERE BEFORE THE TRIBUNAL. 6. THE LD. D/R PLACED RELIANCE ON THE ORDER OF AO. 7. ON THE OTHER HAND, NONE APPEARED ON BEHALF OF TH E ASSESSEE. THEREFORE, THE APPEAL IS BEING DISPOSED OFF AFTER HEARING LD. D/R. 8. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. C IT (A) WE FIND NO INFIRMITY IN THE FINDING OF LD. CIT (A). THE JAIPUR BENCHES OF THE TRIBUNAL ARE TAKING A CONSISTENT VIEW THAT WHERE CERTAIN PURCHASES REMAIN UNVERIFIABLE TH EN REJECTION OF BOOKS OF ACCOUNT IS CORRECT. THEREFORE, WE HOLD THAT LD. CIT (A) WAS J USTIFIED IN UPHOLDING THE REJECTION OF BOOKS OF ACCOUNT. THE JAIPUR BENCHES OF THE TRIBUN AL ARE ALSO TAKING A CONSISTENT VIEW THAT NO ADDITION CAN BE MADE @ 25% OF THE UNVERIFIA BLE PURCHASES AS THE ADDITION CAN BE 3 MADE ON THE BASIS OF PAST HISTORY AND TAKING INTO C ONSIDERATION THE CURRENT EVENTS OF THE CASE. THE G.P. RATE IN THE YEAR UNDER CONSIDERATION IS BETTER FROM THE G.P. RATE DECLARED IN THE EARLIER YEAR. SINCE CERTAIN PURCHASES REMAINED UNVERIFIABLE, THEREFORE, THE LD. CIT (A) HAS SUSTAINED AN ADDITION OF RS.35,000/- OR ODD WHI CH WILL TAKE CARE OF REVENUE LEAKAGE, IF ANY. ACCORDINGLY WE CONFIRM THE ORDER OF LD. CI T (A). 9. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. 10. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 10 .6.2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- THE ACIT, CIRCLE-5, JAIPUR. SHRI BAL KISHAN AGARWAL, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 1051/JP/2010) BY ORDER, AR ITAT JAIPUR.