ITO, Jaipur V. SMT PREMLATA CHOUDHARY, Jaipur

ITA 1176/JPR/2010

• Counselvise Citation: 117623114 RSA 2010
• Duration Of Justice: 9 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 30-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROSHANTA MEENA

Judgement Text

1 ITA 1176-10 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH A JAIPUR BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ITA NO. 1176/JP/2010 ASSTT. YEAR : 2007-08. THE INCOME-TAX OFFICER, VS. SMT. PREM LATA CHOUDH ARY, WARD 1(1), PROP. M/S. BITTHAL TRADING CORPN, JAIPUR. 2032, PITALIYON KA CHOWK, JOHARI BAZAR, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. ROSHANTA MEENA RESPONDENT BY : ORDER DATE OF ORDER : 08/07/2011. 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 REDUCING THE TRAD ING ADDITION OF RS. 7,05,203/- TO RS. 50,000/- AS AGAINST 25% APPLIED BY THE AO ON AC COUNT OF UNVERIFIABLE PURCHASES OF RS. 28,20,814/- BY PLACING RELIANCE ON THE ORDER OF HONBLE GUJARAT HIGH COURT IN THE CASE OF M/S. SANJAY OIL CAKE INDUSTRIES, 10 DTR 153 (GUJ.). 3. THE ASSESSEE DEALS IN PRECIOUS AND SEMI PRECIOUS STONES. G.P. DECLARED ON SALE OF RS. 1,16,29,655/- WAS AT 7.65%. DURING THE ASSESSM ENT PROCEEDINGS THE AO NOTED THAT PURCHASES OF RS. 28,20,814/- MADE FROM VARIOUS PART IES REMAINED UNVERIFIED AS ASSESSEE FAILED TO PRODUCE THESE PARTIES FOR VERIFICATION AN D SUMMONS ISSUED TO THEM REMAINED 2 UNSERVED/UNCOMPLIED WITH. PLACING RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SANJAY OIL CAKE INDUSTRIES (SU PRA), THE AO REJECTED THE BOOKS OF ACCOUNT AND MADE TRADING ADDITION OF RS. 7,05,203/- @ 25% OF UNVERIFIABLE PURCHASES. DETAILED SUBMISSIONS WERE FILED BEFORE LD. CIT (A). IT WAS SUBMITTED THAT COMPLETE PURCHASE VOUCHERS INCLUDING PAN OF THE PARTIES WERE FILED. PAYMENTS HAVE BEEN MADE THROUGH ACCOUNT PAYEE CHEQUE, WHICH WERE CLEARED TH ROUGH PROPER BANKING CHANNEL. COPIES OF BANK STATEMENT WERE ALSO SUBMITTED. THUS ASSESSEE HAS DISCHARGED HER ONUS LAY UPON HER. RELIANCE WAS PLACED ON VARIOUS CASE LAWS. 4. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING T HE MATERIAL ON RECORD, THE LD. CIT (A) HELD THAT THE REJECTION OF BOOKS OF ACCOUNT IS CORRECT AS CERTAIN PURCHASES REMAINED UNVERIFIABLE. THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SANJAY OIL CAKE INDUSTRIES (SUPRA) WAS FOUND DISTINGUISHABLE BY THE JAIPUR BENCH OF THE TRIBUNAL IN THE CASE OF M/S. GEMS PARADISE. LOOKING TO THESE FACTS , THE LD. CIT (A) HELD THAT THOUGH THE REJECTION OF BOOKS OF ACCOUNT IS CORRECT BUT THE AD DITION MADE BY AO @ 25% OF UNVERIFIABLE PURCHASES IS NOT JUSTIFIED. THE LD. C IT (A) HELD THAT IF ANY ADDITION CAN BE MADE AFTER REJECTING THE BOOKS OF ACCOUNT, THAT CAN BE MADE TAKING INTO CONSIDERATION THE PAST HISTORY OF THE CASE. THE LD. CIT (A) NOTED TH AT ASSESSEE HAS DECLARED G.P. RATE AT 7.65% WHICH IS BETTER THAN 7.21% DECLARED IN THE IM MEDIATELY PRECEDING YEAR AS WELL AS G.P. RATE OF 7.5% DECLARED IN ASSESSMENT YEAR 2005- 06. AS THE DECLARED G.P. RATE WAS BETTER, THEREFORE, NO ADDITION IS WARRANTED, AS OBS ERVED BY LD. CIT (A). HOWEVER, AS THE ASSESSEE MADE CERTAIN UNVERIFIABLE PURCHASES, THERE FORE, HE MADE A LUMP SUM ADDITION OF RS. 50,000/- TO COVER UP THE POSSIBLE LEAKAGE OF RE VENUE. 3 5. AFTER CONSIDERING THE ORDER OF AO ON WHICH RELIA NCE HAS BEEN PLACED BY LD. D/R, WE FIND NO UNREASONABLENESS IN THE FINDING OF LD. C IT (A) WHO HAS GIVEN A CATEGORICAL FINDING THAT G.P. RATE DECLARED BY ASSESSEE WAS BET TER AS COMPARED TO EARLIER YEARS. SINCE CERTAIN PURCHASES REMAINED UNVERIFIABLE, THEREFORE, LUMP SUM ADDITION OF RS. 50,000/- MADE BY LD. CIT (A) AGAINST THE ADDITION MADE BY AO IS JUSTIFIED. 6. THE JAIPUR BENCHES OF THE TRIBUNAL ARE TAKING A CONSISTENT VIEW THAT WHERE CERTAIN PURCHASES REMAIN UNVERIFIABLE, THE REJECTION OF BOO KS OF ACCOUNT IS JUSTIFIED. HOWEVER, ADDITION CAN BE MADE TAKING INTO CONSIDERATION THE PAST HISTORY AND CURRENT EVENTS OF THE CASE. CURRENT EVENTS OF THE CASE ARE THAT CERTAIN P URCHASES WERE REMAINED UNVERIFIABLE, THEREFORE, WE HOLD THAT ADDITION SUSTAINED BY LD. C IT (A) AT RS. 50,000/- AGAINST ADDITION MADE BY AO IS JUSTIFIED. ACCORDINGLY, WE CONFIRM T HE ORDER OF LD. CIT (A). 7. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMI SSED. 8. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 08- 07-2011. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/- COPY FORWARDED TO :- THE ITO WARD 1(1), JAIPUR. SMT. PREM LATA CHOUDHARY, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 1176/JP/2010) BY ORDER, AR ITAT JAIPUR. 4