ADTIYA PAREEK, Jaipur V. DCIT, Sikar

ITA 108/JPR/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2169 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 31-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK
• Assessee Lawyers: SADAF RAIES
• Keywords: Depreciation; Commercial expediency; Condonation of delay
• Section: 143(3); 37(1)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 108/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 SHRI ADITYA PAREEK HOUSING BOARD COLONY SHIVSINGHPURA, SIKAR (RAJ.) CUKE VS. THE DCIT CIRCLE- SIKAR SIKAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ANZPP 2652 B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: MS.SADAF RAIES, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL.CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26/04/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 28 /04/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)-III, JAIPUR DATED 12-11-2012 FOR THE ASSES SMENT YEAR 2008-09 RAISING THEREIN FOLLOWING GROUND:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) HAS ERRED IN DIRECTING THE AO TO CALCULATE N ET PROFIT @ 57.5% INSTEAD OF 32.32% AS DECLARED BY THE ASSESS EE. ITA NO.108/JP/2017 SHRI ADITYA PAREEK VS. DCIT, CIRCLE- SIKAR . 2 2.1 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASS ESSEE SUBMITTED THAT THE ASSESSEE HAS FILED THE APPEAL LATE BY 1448 DAYS FOR WHICH AN APPLICATION FOR CONDONATION OF DELAY HAS BEEN FILED BY THE LD. AR OF THE ASSESSEE WITH FOLLOWING PRAYER. IT IS TO BRING TO YOUR KIND NOTICE THAT AN ASSESS MENT ORDER WAS PASSED BY THE LD. CIT(A)-III, JAIPUR ON 12 TH NOV. 2012 IN THE CASE OF SHRI ADITYA PAREEK FOR THE ASSESSMENT YEAR 2008-09 VIDE ITA NO. 351/JAIPUR/10-11. THE ORDER WAS SERVED ON T HE ADDRESS OF THE ASSESSEE WHICH WAS AVAILABLE WITH THE DEPARTMEN T. THE ASSESSEE WAS WORKING AS A BUSINESS DEVELOPMENT CONS ULTANT BUT DUE TO SUFFERING LOSSES AND OTHER REASONS WITH THE DEPARTMENT HE SWITCHED TO A JOB OUT OF HIS HOME TOWN. AS THE ASSE SSEE WAS NOT RESIDING AT THE ADDRESS AVAILABLE WITH THE DEPARTME NT, HE RECEIVED THE ASSESSMENT ORDER FROM HIS RELATIVES WHEN HE CAM E TO HIS TOWN FOR ATTENDING SOME MARRIAGE FUNCTION. IMMEDIATELY O N RECEIPT OF THE SAME AND AGGRIEVED BY THE SAID ASSESSMENT ORDER , THE ASSESSEE MET HIS LEGAL COUNSEL AND DECIDED TO PREFER AN APPE AL BEFORE YOUR KINDSELF. HE DULY DEPOSITED THE FEES ON 9 TH MARCH 2013 VIDE CHALLAN NO. 68346 DATED 9-03-2013 BSR CODE 0220123 AMOUNTIN G TO RS. 10,000/-. THE LD. COUNSEL ALSO MADE ALL THE PREPARA TIONS FOR FILING THE APPEAL BUT DUE TO OVERSIGHT AND NEGLIGENCE ON T HE PART OF THE CLERICAL STAFF OF THE COUNSEL OF THE ASSESSEE THE S AME CANNOT BE SUBMITTED TO YOUR KINDSELF. TO THIS EFFECT THE ASSE SSEE HAS FILED AN AFFIDAVIT PRAYING TO CONDONE THE DELAY. TO THIS EFFECT, THE LD. AR OF THE ASSESSEE RELIED O N THE DECISION OF ITAT,KOLKATA BENCH IN THE CASE OF KRISHNENDY CHOWDH ARY VS. ITO, WARD- (KOLKATA TRIBUNAL) 2017, , ITAT BENGALORE BEN CH IN THE CASE OF NMS COMMUNICATION (P) LTD. VS. CIT CIRCLE-, 12(), B ANGALORE AND ITAT ITA NO.108/JP/2017 SHRI ADITYA PAREEK VS. DCIT, CIRCLE- SIKAR . 3 COCHIN BENCH IN THE CASE OF MINAR ALLOYS & FORGINS (P) LTD. VS. ACIT IN ITA NO. 130 & 131/COCH/2015. 2.2 ON THE OTHER HAND, THE LD. DR OPPOSED THE COND ONATION APPLICATION OF THE ASSESSEE. 2.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I AM OF THE CONSIDERED VIEW TH AT IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO IN VIEW OF T HE DECISION OF HON'BLE HON'BLE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KATIJI AND BROTHERS, 167 ITR 471 (SC), THE DELAY IN FILING THE APPEAL IS CONDONED 3.1 AS REGARDS THE SOLITARY ISSUE OF THE ASSESSEE, THE FACTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 0.2 THE ONLY GROUND OF APPEAL IS AGAINST THE ESTI MATION OF NET PROFIT @ 70% OF THE TOTAL GROSS RECEIPTS. 02.1 THE APPELLANT IS A BUSINESS DEVELOPMENT CONSU LTANT AND RECEIVED COMMISSION OF RS. S20,24,250/- FROM M/S. P RIYA HOME STUDY (P) LTD. IN A.Y. 2008-09. IN THE RETURN OF INCOME F ILED, HE DECLARED INCOME OF RS. 6,54,260/- AFTER CLAIMING VARIOUS EXP ENSES AGAINST THE COMMISSION RECEIPT. DURING THE ASSESSMENT PROCEEDIN GS, ASSESSEE COULD NOT PRODUCE ANY BOOKS OF ACCOUNTS AND BILLS/ VOUCHERS, CLAIMING THAT THE SAME HAVE BEEN LOST. A.O. NOTICED THAT THE COMMISSION RECEIPTS OF THE ASSESSEE WERE LINKED TO THE NUMBER OF PERSO NS WHO BECAME MEMBERS OF M/S. PRIYA HOME STUDY (P) LTD. BY WAY OF DEPOSITING FIX AMOUNT. THE PROFESSION OF ASSESSEE WAS QUITE SIMILA R TO THAT OF THE LIC COMMISSION AGENT, REQUIRING ONLY PERSONAL CANVASSIN G BY ASSESSEE. AO THEREFORE, APPLIED HE BOARD CIRCULAR NUMBER 684 DAT ED 30-03-1993 AND ALLOWED ADHOC DEDUCTION OF EXPENSES @ 30% OF THE GR OSS COMMISSION RECEIPTS. IT WAS ALSO NOTICED BY AO THAT ASSESSEE H AD CLAIMED EXPENSES UNDER VARIOUS HEADS E.G. ADVERTISEMENT, ENTERTAINME NT, CONFERENCE, ITA NO.108/JP/2017 SHRI ADITYA PAREEK VS. DCIT, CIRCLE- SIKAR . 4 PRINTING AND STATIONERY, COMMISSION, HOTEL AND GUES T HOUSE, PROMOTION, OFFICE EXPENSES ETC. PRIMA FACIE, NO SUCH EXPENSES WERE SUPPOSED TO BE INCURRED BY THE ASSESSEE. IN THE PRECEDING YEAR, AS SESSEE HAS SHOWN NET PROFIT @ 57.50% OF THE GROSS COMMISSION RECEIPTS. C ONSIDERING ALL THESE FACTS, AO ESTIMATED THE NET PROFIT @ 70% OF T HE GROSS COMMISSION RECEIPTS. 02.2 LD AR IN HIS WRITTEN SUBMISSION FILED DURING T HE APPEAL PROCEEDINGS STATED THAT THE EXPENSES CLAIMED BY THE APPELLANT WERE VERY REASONABLE AND WERE ESSENTIAL TO PROCURE THE B USINESS. AO HA WRONGLY APPLIED THE AFORESAID BOARD CIRCULAR WHICH IS APPLICABLE TO ONLY LIC AGENTS WHOSE RECEIPTS WERE NOT MORE THAN R S. 60,000/-. AO HAS FAILED TO CONSIDER THE COMPARABLE CASE OF SHRI NARENDRA SINGH, WHO HAS ALSO RECEIVED COMMISSION FROM M/S. PRIYA HO ME STUDY (P) LTD. FOR THE SAME WORK. HE WAS ASSESSED AT THE NET PROFIT @ 26% OF GROSS RECEIPTS. SINCE THE APPELLANT HAS DECLARED NE T PROFIT @32.32%, THE SAME SHOULD BE ACCEPTED. 02.3 I HAVE CONSIDERED THE ARGUMENTS OF THE APPELLA NT AND THE MATERIAL AVAILABLE ON RECORD. I AGREE WITH THE LD. AR THAT THE BOARD CIRCULAR FOLLOWED BY THE AO IS NOT APPLICABLE IN TH E CASE OF THE APPELLANT. HOWEVER, THE APPELLANT HAS FAILED TO SUB STANTIATE THE EXPENSES CLAIMED BY HIM, ONUS OF WHICH ENTIRELY LIE AS PER THE PROVISIONS OF SECTION 37(1) OF THE ACT. THE COMPARA BLE CASE OF SHRI NARENDRA SINGH CITED BY THE LD. AR , IS ALSO NOT AP PLICABLE IN THE ABSENCE OF FULL FACTS OF THAT CASE WHERE AO MADE LU MPSUM DISALLOWANCE OF RS. 2,00,000/-. THE CORRECT BASIS F OR ESTIMATING THE NET PROFIT OF AN ASSESSEE IS HIS PAST HISTORY ONLY AS H ELD IN VARIOUS COURT DECISIONS. ACCORDINGLY, AO IS DIRECTED TO ESTIMATE THE NET PROFIT OF THE APPELLANT @ 57.5% OF THE GROSS COMMISSION RECEIPTS, AS DECLARED BY THE ASSESSEE HIMSELF IN THE PRECEDING YEAR. 0.3 IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. 3.2 DURING THE COURSE OF HEARING, THE LD. AR THE AS SESSEE PRAYED THAT THE LD. CIT(A) HAS ERRED IN DIRECTING THE AO TO CAL CULATE THE NET PROFIT @ 57.5% INSTEAD OF 32.32% AS DECLARED BY THE ASSESSEE . THE LD. AR OF THE ASSESSEE ALSO RELIED ON THE DECISION DATED 25-05-20 16 OF THE ITAT COORDINATE BENCH IN THE CASE OF SATYA PRAKASH CHOUD HARY VS. DCIT, ITA NO.108/JP/2017 SHRI ADITYA PAREEK VS. DCIT, CIRCLE- SIKAR . 5 CIRCLE- JHUNJHUNU IN ITA NO. 410/JP/2013 FOR THE A. Y. 2008-09 PRAYING THAT THE ISSUE OF THE ASSESSEE IS COVERED BY THE DE CISION OF ITAT IN THE CASE OF SATYA PRAKASH CHOUDHARY (SUPRA) AND THUS TH E APPEAL OF THE ASSESSEE MAY BE ALLOWED. 3.3 ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF THE LOWER AUTHORITIES. 3.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BRIEF FACTS OF THE CASE ARE TH AT THE ASSESSEE WAS DERIVING COMMISSION INCOME FROM M/S. PRIYA HOME STU DY PRIVATE LTD. WHERE THE ASSESSEE WAS ACTING AS BUSINESS DEVELOPME NT CONSULTANT. THE ASSESSEE PROCURED THE BUSINESS FROM GENERAL PUBLIC AND GOT SOME COMMISSION TOWARDS HIS CONTRIBUTION. DURING THE YEA R, THE ASSESSEE HAD EARNED GROSS COMMISSION OF RS. 20,24,250/- FROM M/S . PRIYA HOME STUDY PRIVATE LTD. AND DECLARED NET PROFIT OF RS. 6,54,26 0/- I.E. 32.32% OF GROSS RECEIPTS OF RS. 20,24,250/- IN HIS RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR 2008-09. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY U/S 143(3) OF THE ACT FOR THE YEAR UNDER CONSIDERATION AND THE AO MADE ADHOC DEDUCTION OF 30% FROM GROSS RECEIPTS OF RS. 2 0,24,250/-AND REMAINING 70% OF RS. 20,24,250/-WAS CONSIDERED AS INCOME OF THE ASSESSEE TREATING THE ASSESSEE AS LIC AGENT. IN FIRST APPEAL THE LD. ITA NO.108/JP/2017 SHRI ADITYA PAREEK VS. DCIT, CIRCLE- SIKAR . 6 CIT(A) RESTRICTED THE ADDITION TO 57.50% INSTEAD OF 70% THEREBY CONFIRMING THE ADDITION TO THE EXTENT OF RS. 5,09,7 06/-. IT IS NOTED THAT THE SIMILAR ISSUE HAS BEEN DECIDED BY THE COORDINATE BE NCH VIDE ITS ORDER DATED 25-05-2016 IN THE CASE OF SATYA PRAKASH CHOUD HARY VS. DCIT (SUPRA) BY OBSERVING AS UNDER:- 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM COMMISSION RECEIVED FROM M/S. PRIYA HOME STUDY PVT. LTD., A COMPANY ENGAGED IN MULTI LEVEL M ARKETING BUSINESS. THE ASSESSEE HAS FILED RETURN ON 13.01.2009 DECLARI NG AN INCOME OF RS. 8,75,491/- FOR THE YEAR UNDER CONSIDERATION. THE CA SE OF THE ASSESSEE WAS SCRUTINIZED UNDER SECTION 143(3) AND THE ASSESS MENT WAS COMPLETED ON 24.01.2011 DETERMINING THE TOTAL INCOM E AT RS. 18,70,250/-. 3.1. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, O N BEING ASKED BY THE AO TO PRODUCE THE BOOKS OF ACCOUNT, THE ASSE SSEE VIDE ORDER SHEET ENTRY DATED 08.03.2010 ADMITTED THAT NO BOOKS OF ACCOUNTS ARE AVAILABLE, THOUGH IN THE AUDIT REPORT FILED IN FORM NO. 3CD ON 19.02.2010 IT IS MENTIONED THAT CASH BOOK, LEDGER A ND VOUCHERS ETC ARE MAINTAINED. THE AO, THEREFORE, FOR NON-MAINTENANCE/ NON-PRODUCTION OF BOOKS OF ACCOUNTS, INVOKED PROVISIONS OF SECTION 14 5(3) OF THE IT ACT AND ACCORDINGLY PROCEEDED TO DECIDE THE CASE OF THE ASSESSEE AS UNDER. 3.2. THE AO WHILE SCRUTINIZING THE CASE OF THE ASSE SSEE, NOTICED THAT THE ASSESSEE HAS CLAIMED VARIOUS EXPENSES AS MENTIO NED UNDER VARIOUS HEADS, IN PROFIT & LOSS ACCOUNT, AS UNDER :- SR. EXPENSES TOTAL EXPENSES AMOUNT PERCENTAGE DISALLOWED AMOUNT DISALLOWED 1. SALARY 3,60,000.00 1% 3,600.00 2. CONFERENCE EXPENSES 5,25,715.00 3% 15,771.00 3. TRAVELLING EXPENSES 4,25,875.00 2% 8,517.00 4. OTHER EXPENSES 75,250.00 30% 22,575.00 ITA NO.108/JP/2017 SHRI ADITYA PAREEK VS. DCIT, CIRCLE- SIKAR . 7 5. HOTEL BOARDING & LODGING 4,75,825.00 10% 47,580.00 6. FESTIVAL 45,285.00 LUMP-SUM 20,000.00 7. DONATION 4,00,000.00 100% 4,00,000.00 8. COMMISSION 4,37,250.00 100% 4,37,250.00 9. CONVEYANCE 45,285.00 20% 9,057.00 10. TELEPHONE 54,250.00 20% 10,850.00 11. DEPRECIATION 97,804.00 20% 19,560.00 TOTAL 9,94,760.00 SINCE THE ASSESSEE HAS FAILED TO PRODUCE NECESSARY BILLS/VOUCHERS/DETAILS OF EXPENSES INCURRED BY THE ASSESSEE, THE AO COMPARING WITH THE SIMILAR OTHER CASES, MADE THE DI SALLOWANCES PERCENTAGE-WISE AS MENTIONED HEREIN ABOVE AGAINST T HE RESPECTIVE HEADS TOTALING TO RS. 9,94,760/-. THE AO OBSERVED THAT THE ASSESSEE HAS NOT BEEN ABLE TO PROVE THAT ENTIRE EXPENSES HAV E BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS WITHIN THE MEANING OF SECTION 37(1) OF THE IT ACT. THE AO HELD THAT TH E MOST IMPORTANT ELEMENT FOR AN EXPENDITURE TO BE ALLOWED AS DEDUCTI ON IS COMMERCIAL EXPEDIENCY OF THAT EXPENDITURE. MERE EXISTENCE OF A N AGREEMENT BETWEEN THE ASSESSEE AND ITS SELLING AGENT OR PAYME NT OF CERTAIN AMOUNT AS COMMISSION TO THE SELLING AGENT WILL NOT BIND THE ITO TO HOLD THAT THE PAYMENT WAS MADE WHOLLY AND EXCLUSIVE LY FOR THE PURPOSES OF ASSESSEES BUSINESS. IN THE INSTANT CAS E, THE ASSESSEE HAS FAILED TO PROVE THAT THE EXPENSES INCURRED ARE WHOL LY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS, THEREFORE, HE DISALLOW ED AN AMOUNT TOTALING TO RS. 9,94,760/- AND ADDED TO THE TOTAL I NCOME OF THE ASSESSEE. . 5.11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE BOOKS OF ACCOUNTS HAVE BEEN REJECTED U/S 145(3) OF THE ACT AND THE ESTIMATION O F INCOME HAS BEEN MADE BY THE AO BY MAKING COMPARISON WITH CERTAIN OT HER ASSESSEES IN APPARENTLY SIMILAR LINE OF BUSINESS. IN THIS REGAR D THE COURTS HAVE HELD THAT THE ESTIMATE OF INCOME UNDER THE BEST JUDGEMEN T ASSESSMENT SHOULD HAVE FAIR LINK OR NEXUS WITH THE AVAILABLE M ATERIAL AND INFORMATION RELATED TO THE TAXPAYER. IT IS ALSO BE EN HELD BY THE COURTS THAT WHERE BOOKS OF ACCOUNTS OF THE ASSESSEE ARE RE JECTED, THE ESTIMATION OF GP/NP RATE SHOULD BE ON THE BASIS OF COMPARABLE CASES ITA NO.108/JP/2017 SHRI ADITYA PAREEK VS. DCIT, CIRCLE- SIKAR . 8 AND WHERE THERE IS NO SUBSTANTIAL CHANGE IN THE FACTUAL POSITION OF THE ASSESSEE, PROFIT DECLARED AND ACCEPTED IN THE PREVI OUS YEAR CONSTITUTE GOOD BASIS FOR ESTIMATING THE GP/NP RATE. IN THIS REGARD, USEFUL REFERENCE CAN BE DRAWN TO THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF BRIJ BHUSHAN LAL PURDAN KUMAR 115 ITR 5 40, THE STATE OF KERALA VS. C. VELUKUTTY 60 ITR 239, AND INANI MARBL ES PVT. LTD.(2009) 316 ITR 125 (RAJ.)(HC). IN THE INSTANT CASE, THE LD. AO HAS STATED THAT HE HAS CARRIED OUT THE COMPARISON OF THE EXPENSES CLAIMED BY THE APPELLANT WITH OTHER SIMILAR ASSESSEES IN THE SIMIL AR LINE OF BUSINESS. IT IS NOTED FROM PERUSAL OF THE RECORDS THAT BESIDES LISTING DOWN THE NAME OF THE COMPARABLE CASES, THE AO HAS NOT SPELT OUT H OW SUCH CASES ARE COMPARABLE WITH THAT OF THE APPELLANT AND THE BASI S OF DISALLOWANCE OF THE VARIOUS EXPENSES WHICH VARY FROM 1% TO 30% OF THE RESPECTIVE EXPENSES. IN ABSENCE OF THIRD PARTY COMPARABLES, ME RELY BY SAYING THAT APPELLANT HAS CLAIMED EXCESSIVE EXPENSES ARE NOT SU STAINABLE IN THE EYES OF LAW. IN OUR VIEW, THE APPROACH OF THE AO I S CLEARLY ARBITRARY AND IS DEVOID OF ANY RATIONAL AND FAIR BASIS FOR ES TIMATING THE INCOME OF THE ASSESSEE. FURTHER, IT IS NOTED THAT DURING TH E YEAR UNDER CONSIDERATION, THE APPELLANT HAS DECLARED N.P RATE OF 20.91% ON TOTAL RECEIPT OF RS. 41.87 LACS AS AGAINST N.P RATE OF 20 .15% ON TOTAL RECEIPT OF RS. 7.54 LACS IN THE PRECEDING YEAR. WHERE THE APPROACH FOLLOWED BY THE AO IS APPROVED, IT COULD RESULT IN THE N.P R ATE OF 44.66% WHICH IS CLEARLY ON AN EXTREMELY HIGHER SIDE AND CANNOT B E SAID TO BE A CLEAR INDICATION OF THE N.P RATE IN THIS LINE OF BUSINESS AND WILL BE ARBITRARY IN NATURE. IN ABSENCE OF COMPARABLE CASES, WE ARE THEREFORE OF THE VIEW THE PAST HISTORY OF THE APPELLANT IS THE BEST GUIDE TO ESTIMATE THE N.P. RATE AND GIVEN THAT THE N.P RATE OF 20.91% IS BETTE R THAN 20.15% OF THE PRECEDING YEAR, THE APPELLANT DOES NOT DESERVES N.P BASED ADDITION/DISALLOWANCES IN ITS HANDS INSPITE OF THE FACT THAT THE BOOKS OF ACCOUNTS HAVE BEEN REJECTED. IN THIS REGARD USEFUL REFERENCE CAN BE DRAWN TO THE DECISION OF HONBLE RAJASTHAN HIGH COU RT IN THE CASE OF GOTTON LIME KHANIJ UDHYOG 256 ITR 243 WHERE THE COU RT HAS HELD THAT MERE REJECTION IN THE BOOKS OF ACCOUNT WOULD N OT MEAN THAT IT MUST NECESSARILY LEAD TO ADDITIONS TO THE RETURN INCOME. TAKING INTO CONSIDERATION OF THE ARGUMENTS OF THE B OTH THE PARTIES AND DECISION OF THE COORDINATE BENCH IN THE CASE OF SAT YA PRAKASH CHOUDHARY (SUPRA), IT IS OBSERVED THAT THE FACTS AND CIRCUMST ANCES OF THE PRESENT CASE ARE SIMILAR TO THE FACTS AND CASE OF SHRI SATYA PR AKSH CHOUDHARY (SUPRA), THEREFORE, THE LD. CIT(A) IS NOT JUSTIFIED IN DIREC TING THE AO TO CALCULATE ITA NO.108/JP/2017 SHRI ADITYA PAREEK VS. DCIT, CIRCLE- SIKAR . 9 THE NET PROFIT @ 57.50% INSTEAD OF 32.32% AS DECLAR ED BY THE ASSESSEE. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. 4.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/04/20 17. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 /04/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI ADITYA PAREEK. JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT,CIRCLE- SIKAR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 108/JP/2017 ) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR