M/S. G.B.IMPEX, JAIPUR V. ITO, WARD-6(3), JAIPUR

ITA 235/JPR/2020

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4522 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 13-03-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S NEHRA ACIT A
• Keywords: Bogus purchase; Rejection of books of accounts; Question of law; Onus to prove; Reassessment proceedings
• Section: 143(3); 207; 153; 145(3); 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 235/JP/2020 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2007-08 M/S G.B. IMPEX, B-172, RAJENDRA MARG, BAPU NAGAR, JAIPUR. CUKE VS. THE ITO, WARD-6(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAGFG 3052 L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI A.S. NEHRA (ACIT) A LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 05/01/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 01/04/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF LD. CIT(A)-I, JODHPUR DATED 11.12.2019 FOR THE ASSESSME NT YEAR 2007-08 WHEREIN THE ASSESSEE HAS TAKEN THE FOLLOWING GROUND S OF APPEAL:- 1. THE LD. CIT(A) HAS ERRED ON FACT AND IN LAW IN UPHOLDING THE REJECTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE AC T, 1961. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE TRADING ADDITION OF RS. 58,57,118/- BY DISALLOWING 15% OF THE ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 2 ALLEGED UNVERIFIABLE PURCHASES OF RS. 3,90,47,452/- MADE FROM 12 PARTIES. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE FIRM IS ENGAGED IN THE BUSINESS OF TRADING AND EXPORT OF GEM STONES , DIAMOND, ROUGH, ETC. DURING THE YEAR IT DECLARED GROSS PROFIT OF RS .76,16,983/- ON SALES OF RS.17,40,37,587/- GIVING G.P. RATE OF 4.38% AS A GAINST GROSS PROFIT OF RS.5,51,602/- ON SALES OF RS.64,57,290/-GIVING G.P. RATE OF 8.54% IN LAST YEAR. THE AO OBSERVED THAT THE PARTIES MENTION ED AT PAGE 2 OF THE ASSESSMENT ORDER HAVE ADMITTED BEFORE THE AUTHORITI ES OF INVESTIGATION WING OF INCOME TAX DEPARTMENT THAT THEY HAD NO BUSI NESS ACTIVITIES OF PURCHASE AND SALES OF PRECIOUS OR SEMI-PRECIOUS STO NES OR ANY RELATED ITEMS AND ACTUALLY INDULGED IN ISSUING BOGUS BILLS. THE ONUS TO PROVE THE GENUINENESS OF PURCHASE LIES ON THE ASSESSEE. THE ASSESSEE WAS ASKED TO PRODUCE THE PARTIES BUT IT FAILED TO DO SO. THE ASSESSEE CANNOT ABSOLVE FROM HIS ONUS OF PROVING GENUINENESS OF PUR CHASES BY SIMPLY SUGGESTING THE DEPARTMENT TO CALL THESE PARTIES OR MAKE DIRECT ENQUIRY THROUGH INSPECTOR. THE SUMMONS ISSUED WERE EITHER R ETURNED BACK WITH THE POSTAL REMARK THE ADDRESSES WERE NOT AVAILABLE ON ACCOUNT OF INCOMPLETE ADDRESS OR STATED TO HAVE SHIFTED FROM T HAT PLACE OR WHERE SUMMONS HAVE BEEN SERVED INSTEAD OF ATTENDING BEFOR E THE UNDERSIGNED, WRITTEN SUBMISSION ALONGWITH COPY OF I TR, COPY OF BANK ACCOUNT, COPY OF SALE BILLS ETC. HAVE BEEN FILED BY THEM. ACCORDINGLY, THE AO AFTER RELYING ON THE DECISION OF GUJARAT HIG H COURT IN CASE OF SANJAY OIL CAKE INDUSTRIES VS. CIT 10 DTR 153 REJEC TED THE BOOKS OF ACCOUNTS AND MADE TRADING ADDITION OF RS.97,61,863/ - BY DISALLOWING 25% OF PURCHASES OF RS.3,90,47,452/-. ON APPEAL, TH E LD. CIT(A) CONFIRMED THE ACTION OF AO IN REJECTING THE BOOKS O F ACCOUNT U/S 145(3) OF THE ACT. AS REGARD TO THE DISALLOWANCE OF 25% OU T OF ALLEGED ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 3 UNVERIFIABLE PURCHASES RECEIVED FROM 12 PARTIES, TH E LD. CIT(A) AFTER RELYING ON THE DECISION OF ITAT IN ASSESSEES OWN C ASE FOR AY 2008-09 RESTRICTED THE DISALLOWANCE TO THE EXTENT OF 15%. A GAINST THE SAID FINDINGS, THE ASSESSEE IS IN APPEAL BEFORE US. 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE ASSESSEE IS MAINTAINING COMPLETE BOOKS OF ACCOUNT O N DAY-TO-DAY BASIS WHICH ARE SUBJECT TO TAX AUDIT. THESE BOOKS ARE DUL Y SUPPORTED BY BILLS AND VOUCHERS. ALL THE TRANSACTION OF PURCHASES & SA LES IS FULLY VERIFIABLE FROM THE SUPPORTING BILLS, VOUCHERS & DOCUMENTS MAI NTAINED BY THE ASSESSEE. THE ASSESSEE ALSO MAINTAINS THE STOCK REC ORDS ON DAY TO DAY BASIS. ALL THE PURCHASE AND SALES ARE DULY RECORDED IN THE STOCK REGISTER. THE QUANTITATIVE TALLY IS PROVIDED IN TAX AUDIT REP ORT. THE AO HAS ACCEPTED THE SALES. THERE CANNOT BE SALE WITHOUT PU RCHASE. THE AO HAS ALSO ACCEPTED THE STOCK REGISTER/ QUANTITATIVE DETA ILS. HENCE, PURCHASES CLAIMED BY THE ASSESSEE CANNOT BE HELD TO BE BOGUS. 4. IT WAS SUBMITTED THAT IN RESPECT OF ALLEGED BOG US PURCHASES, COMPLETE DETAILS OF 12 PARTIES ALONG WITH THEIR ADD RESS, TIN NO., TELEPHONE NO., COPY OF PURCHASE BILLS, MODE OF PAYM ENT WAS SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. PAYMEN T OF THE PURCHASES WAS MADE BY ACCOUNT PAYEE CHEQUE. ON THES E PARTIES SUMMONS WERE ISSUED. SOME OF THE PARTIES HAVE CONFI RMED THE SALE MADE BY THEM TO THE ASSESSEE BY PROVIDING THE COPY OF ITR, BANK ACCOUNT, SALE BILL, ETC. AS HAS BEEN ACCEPTED BY TH E AO AT PG 4 OF THE ASSESSMENT ORDER. HOWEVER, AO HAS NOT PROVIDED THE DETAILS AS TO WHICH PARTIES HAVE ACCEPTED THE SALE MADE BY THEM B UT TREATED THEM ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 4 AS BOGUS ONLY BECAUSE THEY HAVE NOT APPEARED BEFORE HIM BUT FILED THE WRITTEN SUBMISSION. THIS CANNOT BE A REASON TO TREA T THE PURCHASES MADE FROM THESE PARTIES AS BOGUS/ UNVERIFIABLE. 5. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS PROVIDED COPY OF PURCHASE BILLS OF THESE PARTIES AND LINKED IT WITH THE SALES MADE BY IT. OUT OF TOTAL PURCHASES OF RS.3,90,47,452, THERE IS ONE TO ONE LINKING WITH SALES TO THE EXTENT OF PURCHASE OF RS.2,72,69, 607/-. THUS, PURCHASES TO THE EXTENT OF 69.84% IS LINKED TO SALE S. SOME OF THE PURCHASES COULD NOT BE LINKED TO SALES AS THEY WERE MIXED WITH OTHER STOCK AND THEREAFTER SOLD. IN ANY CASE WHERE PURCHA SES ARE LINKED TO SALES, G.P. MARGIN EARNED BY THE ASSESSEE IS TABULA TED AS UNDER:- NAME OF PARTY AMOUNT OF PURCHASES AMOUNT OF SALES GROSS PROFIT G.P. RATE ROYAL GEMS & ARTS 26,03,913 27,52,191 1,48,278 5.39% ANUPAM EXPORTS & IMPORTS 67,10,763 70,41,725 3,30,962 4.70% SWAPAN SHREE JEWELS 28,85,953 30,49,980 1,64,027 5.38% RISHABH INTERNATIONAL 58,27,522 61,00,165 2,72,643 4.47% SHYAM INTERNATIONAL 13,23,601 13,89,216 65,615 4.72% RIDHISIDHI JEWELLERS 15,94,080 16,67,978 73,898 4.43% ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 5 RESU EXPORTS 63,23,775 66,41,990 3,18,215 4.79% TOTAL 2,72,69,607 2,86,43,245 13,73,638 4.80% FROM THE ABOVE, IT CAN BE NOTED THAT THE G.P. RATE FROM THE ALLEGED NON VERIFIABLE PURCHASES IS 4.80% WHICH IS BETTER THAN THE OVERALL G.P. RATE OF 4.38%. HENCE, THE PURCHASES CANNOT BE PRESUMED T O BE INFLATED. 6. IT WAS FURTHER SUBMITTED THAT THE LD. CIT(A) HA S CONFIRMED THE ADDITION BY DISALLOWING 15% OF ALLEGED UNVERIFIABLE PURCHASES BY REFERRING TO THE DECISION OF HONBLE ITAT IN ASSESS EES OWN CASE FOR A.Y 2008-09. THIS ORDER IS DATED 22.10.2014. THEREA FTER, THE HONBLE ITAT HAS TAKEN A CONSISTENT VIEW THAT WHERE PURCHAS ES ARE UNVERIFIABLE, INSTEAD OF DISALLOWING 15% OF THE PURCHASES, APPROP RIATE G.P. RATE SHOULD BE APPLIED CONSIDERING THE PAST HISTORY OF T HE CASE & OTHER SURROUNDING CIRCUMSTANCES. EVEN IN AY 2006-07, ON S IMILAR FACTS, HONBLE ITAT HAS APPLIED G.P. RATE FOR ESTIMATING T HE INCOME. IN AY 2006-07 G.P. RATE WAS 8.54%. HOWEVER, IT CAN BE NOT ED THAT THE TURNOVER OF ASSESSEE HAS INCREASED MANIFOLDS AS COM PARED TO THE TURNOVER OF LAST YEAR. IN FACT AY 2006-07 WAS THE F IRST YEAR OF BUSINESS WHICH STARTED ON 18.09.2005. THEREFORE, G.P. RATE O F LAST YEAR CANNOT BE COMPARED WITH THE G.P. RATE FOR THE YEAR UNDER CONS IDERATION. OTHERWISE ALSO, A BUSINESSMAN IN INTERESTED IN THE VOLUME OF PROFIT AND NOT IN THE PERCENTAGE OF PROFIT. IN TERMS OF VOLUME , GROSS PROFIT HAS INCREASED FROM RS. 5,51,602/- TO RS.76,16,983/-. TH E DECLINE IN G.P. RATE IS ON ACCOUNT OF REDUCED MARGIN ON INCREASE IN TURNOVER. THE ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 6 POSITION OF TURNOVER AND G.P. RATE IN PREVIOUS AND SUBSEQUENT YEARS IS AS UNDER:- AY SALES GROSS PROFIT G.P. RATE DECLARED REMARK 2006 - 07 RS.64,57,290/ - RS.5,51,602/ - 8.54% ASSESSMENT WAS FRAMED U/S 143(3) BY MAKING ADDITION OF RS.17,92,158/- BY DISALLOWING 25% OF UNVERIFIABLE PURCHASES. THE LD. CIT(A) CONFIRMED THE TRADING ADDITION OF RS.61,839/- BY APPLYING G.P. RATE OF 9.5%. THE ORDER WAS CIT(A) WAS CONFIRMED BY HONBLE ITAT VIDE ORDER DT. 11.02.2011 IN ITA NO.1263/JP/2010(PB 28-32). 2007-08 RS.17,40,37,587/- RS.76,16,983/- 4.38% YEAR UNDER APPEAL 2008-09 RS.19,71,89,378/- RS.1,06,85,782/- 5.42% ASSESSMENT WAS FRAMED U/S 143(3) BY MAKING ADDITION OF RS.82,10,166/- BY DISALLOWING 25% OF UNVERIFIABLE PURCHASES. THE HONBLE ITAT VIDE ORDER DT. 22.10.2014 IN ITA NO.241/JP/12RESTRICTED THE ADDITION BY DISALLOWING 15% OF UNVERIFIABLE PURCHASES. 2009-10 RS.18,78,86,268/- RS.1,06,65,406/- 5.68% ASSESSMENT WAS FRAMED U/S 143(3) BY MAKING TRADING ADDITION OF RS.2.50 LACS. THEREAFTER, ASSESSMENT WAS REOPENED U/S 148 WHICH WAS QUASHED BY THE HONBLE ITAT VIDE ORDER DT. 18.09.2018 IN ITA NO.624/JP/18. 2010-11 RS.19,36,99,119/- RS.1,03,87,456/- 5.36% ASSESSMENT WAS FRAMED U/S 143(3) BY MAKING TRADING ADDITION OF RS.57,83,670/- WHICH WAS RESTRICTED BY LD. CIT(A) TO RS.7,85,442/- BY DISALLOWING 15% OF UNVERIFIABLE PURCHASES. THE APPEAL FILED BY THE DEPARTMENT WAS DISMISSED BY HONBLE ITAT VIDE ORDER DT. 13.05.2016. THEREAFTER, ASSESSMENT WAS REOPENED U/S 148 WHICH WAS QUASHED BY THE HONBLE ITAT VIDE ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 7 ORDER DT. 18.09.2018 IN ITA NO.800/JP/18. 2011-12 RS.18,72,73,797/- RS.46,46,077/- 2.48% ACCEPTED U/S 143(1). THEREAFTER IN REASSESSMENT PROCEEDINGS U/S 147 ADDITION OF RS.22,79,279/- WAS MADE BY TREATING THE PURCHASES MADE FROM M/S KOTHARI IMPEX AS NON- GENUINE VIDE EX-PARTE ORDER DT.03.12.2018. 2012-13 RS.7,51,43,437/- RS.17,05,291/- 2.27% ASSESSMENT WAS FRAMED U/S 143(3) BY MAKING TRADING ADDITION OF RS.20,51,880/- BY APPLYING G.P. RATE OF 5%. THE HONBLE ITAT VIDE ORDER DT. 17.11.2016 IN ITA NO.430/JP/16 RESTRICTED THE TRADING ADDITION BY APPLYING G.P. RATE OF 3.64% RESULTING INTO TRADING ADDITION OF RS.10,29,930/-. FROM THE ABOVE TABLE IT CAN BE NOTED THAT G.P. RATE IS FLUCTUATING ON YEAR TO YEAR BASIS. IT CANT BE CONSTANT. EVEN IN A Y 2012-13, HONBLE ITAT CONSIDERED THE G.P. RATE OF 3.64% AS REASONABL E. IN THESE CIRCUMSTANCES EVEN IF BOOKS OF ACCOUNTS ARE REJECTE D, IT SHOULD NOT NECESSARILY LEAD TO TRADING ADDITION. 7. IT WAS SUBMITTED THAT IT IS A SETTLED PROPOSITIO N OF LAW THAT TRADING ADDITION NEED NOT NECESSARILY MADE ONLY BECAUSE BOO KS OF ACCOUNTS ARE REJECTED. ONE IS TO CONSIDER THE OTHER FACTS AND CI RCUMSTANCES OF THE CASE. FOR THIS RELIANCE WAS PLACED ON THE FOLLOWING CASES:- SHANKAR EXPORT VS. ACIT 42 DTR 441 DT. 01.06.2010(J PR.) CIT VS. SMT. POONAM RANI 41 DTR 194 (DEL) MALANI RAMJIVAN JAGANNATH VS. ACIT 207 CTR 19 (RAJ. ) ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 8 CIT VS GOTAN LIME KHANIZ UDHYOG 256 ITR 243 (RAJ.) 8. PER CONTRA, THE LD. DR RELIED ON THE FINDING OF THE LOWER AUTHORITIES AND OUR REFERENCE WAS DRAWN TO THE FIND INGS OF THE LD. CIT(A) WHICH ARE CONTAINED AT PARA 4.3 OF HIS ORDER WHICH READS AS UNDER:- 4.2 I HAVE CONSIDERED THE FACTS OF THE CASE, ASSES SMENT ORDER, DOCUMENTS ON RECORD AND APPELLANT'S SUBMISSIONS. TH E AO NOTED THAT THE ASSESSEE HAD RECORDED BOGUS PURCHASE S IN HIS BOOKS OF ACCOUNTS. IN SUCH CIRCUMSTANCES, IT WAS NO T POSSIBLE FOR HIM TO ASCERTAIN TRUE PICTURE OF PROFIT RATE. T HUS, HE REJECTED THE ASSESSEE'S BOOKS OF ACCOUNTS U/S. 145( 3) OF THE ACT AND DISALLOWED 25% OF ALLEGED UNVERIFIABLE PURC HASES AMOUNTING TO RS. 3,90,47,452/- RECEIVED FROM AS MAN Y AS 12 PARTIES RESULTING INTO ADDITION OF RS. 97,61,863/-. THERE ARE TWO ISSUES TO BE CONSIDERED HERE; FIRST, REGARDING REJE CTION OF BOOKS OF ACCOUNTS U/S 145(3) OF THE ACT AND SECOND REGARD ING DISALLOWANCE OF 25% OUT OF ALLEGED UNVERIFIABLE PUR CHASES. AS REGARDS TO REJECTION OF BOOKS OF ACCOUNTS, THE HON' BLE HIGH COURT OF RAJASTHAN IN THE CASE OF VIMAL SINGHVI VS. ACTT [2015] 55 TAXMANN.COM 309 (RAJASTHAN) HAS HELD THAT ON NON- GENUINE PURCHASES, BOOKS OF ACCOUNTS CAN BE REJECTE D AND PROVISIONS OF SEC. 145(3) ARE APPLICABLE. THE SAME COURT IN THE CASE OF VENUS ARTS & GEMS VS. ITO, DB INCOME TAX AP PEAL NO.582/2011 HAS OBSERVED THAT ONCE THERE IS FINDING THAT THE PARTIES ARE NON-EXISTENT, THIS BY ITSELF IS A SERIO US DISCREPANCY AND ADVERSE INFERENCE CAN BE DRAWN. THE AO HAD POIN TED OUT VARIOUS DEFICIENCIES, THUS, HE REJECTED THE BOOK RE SULT U/S 145(3) OF THE ACT. THE APPELLANT HAS CITED CERTAIN CASE-LAWS IN HIS FAVOUR BUT THEY WERE RENDERED AS PER FACTS AND CIRCUMSTANCES OF THOSE CASES AND ARE NOT DIRECTLY A PPLICABLE IN THE INSTANT CASE. CONSIDERING THE FACTUAL AND LEGAL POSITION AS ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 9 DISCUSSED ABOVE, THE AO'S ACTION OF REJECTING THE B OOKS OF ACCOUNTS U/S 145(3) OF THE ACT IS UPHELD. AS REGARDS TO THE DISALLOWANCE OF 25% OUT OF ALLEGE D UNVERIFIABLE PURCHASES RECEIVED FROM AS MANY AS 12 PARTIES, HERE IT IS RELEVANT TO DISCUSS ASSESSEE'S CASE PERTAINING TO AY 2008-09 , WHEREIN THE AO AFTER INVOKING PROVISION OF SECTION 145(3), DISA LLOWED 25% OF UNVERIFIABLE PURCHASES. FURTHER, THE CIT(A) UPHELD THE AO'S ACTION OF REJECTION OF BOOKS OF ACCOUNT AND DISALLOWANCE O F 25% OUT OF UNVERIFIABLE PURCHASES. THE HON'BLE ITAT, JAIPUR IN APPELLANT'S OWN CASE IN ITA NO. 241/JP/2012 FOR A.Y. 2008-09 RE STRICTED THE DISALLOWANCE TO THE EXTENT OF 15% OF UNVERIFIABLE P URCHASES. THE RELEVANT EXTRACT OF THE JUDICIAL PRONOUNCEMENTS IS REPRODUCED AS UNDER:- 11.5 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH T HE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE A SSESSEE HAS NOT CHALLENGED THE REJECTION OF BOOK RESULT AS DEFE CTS POINTED OUT BY THE ASSESSING OFFICER ARE SUFFICIENT TO REJECT T HE BOOK RESULT U/S 145(3) OF THE ACT. THE DEPARTMENT HAD CONDUCTED SURVEY AND SEARCH IN VARIOUS CASES AS MENTIONED BY THE ASSESSI NG OFFICER AS WELL AS THE LEARNED CIT(A). ON INVESTIGATION, IT IS FOUND THAT FOUR PARTIES WERE ALSO INDULGED IN PROVIDING ACCOMMODATI ON BILLS. THE SUFFICIENT OPPORTUNITIES HAVE BEEN GIVEN BY THE ASS ESSING OFFICER TO PROVE THE GENUINENESS OF THE PURCHASES. THE ASSE SSING OFFICER HIMSELF ISSUED THE NOTICES TO THESE PARTIES BUT NOT ICES WERE RETURNED BACK BY THE POSTAL DEPARTMENT WITH REMARK ' NO SUCH PARTY EXISTS AT GIVEN ADDRESS'. THE ASSESSEE COULD NOT PRODUCE THESE PARTIES FOR VERIFICATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. EVEN THE ASSESSING OFFICER PROVIDED SU FFICIENT TIME TO THE ASSESSEE. THE UNVERIFIABLE PURCHASES WERE RS . 3,28,40,664/- WHEREAS THE ASSESSEE EXPORTED THE GOO DS DURING THE YEAR AT RS.93,42,720/- DURING THE YEAR UNDER CO NSIDERATION. THEREFORE, THE ASSESSEE'S CLAIM THAT ALL THE GOODS WERE EXPORTED DURING THE YEAR IS NOT CORRECT. FURTHER THE LEARNED ASSESSING ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 10 OFFICER HAD NOT PRECLUDED BY THE LAW IF THE ASSESSE E EVEN EXPORTED THE GOODS 100% TO INVESTIGATE THE UNVERIFI ABLE PURCHASES. THE LEARNED ASSESSING OFFICER SENT NOTIC ES TO THESE PARTIES WHICH WERE RETURNED BACK UNSERVED WITH REMA RK 'PARTY IS NOT EXISTENT'. THE ASSESSEE WAS ALSO PRODUCED THESE PARTIES FOR VERIFICATION WHATEVER EVIDENCE WERE PRODUCED BY THE ASSESSEE ARE NOT SUFFICIENT TO PROVE THE PURCHASE GENUINE EV EN PAYMENTS THROUGH ACCOUNT PAYEE CHEQUES IS NOT SACROSANCT AND HAD NOT DISCHARGED ONUS ON IT. DURING THE COURSE OF INVESTI GATION CONDUCTED BY THE DEPARTMENT, THESE PARTIES WERE FIG URED IN THE LIST OF ENTRY PROVIDES AND THEY HAD ADMITTED THAT T HEY ONLY PROVIDED BILLS NO ANY REAL BUSINESS WITH DELIVERY O F GOODS. THE LEARNED ASSESSING OFFICER APPLIED HON'BLE GUJARAT H IGH COURT DECISION IN THE CASE OF SANJAY OIL CAKE INDUSTRIES (SUPRA) AND ITAT AHMADABAD BENCH DECISION IN THE CASE OF VIJAY PROTEINS WHEREIN 25% DISALLOWANCE HELD REASONABLE ON UNVERIF IABLE PURCHASES. THE A.R. OF THE ASSESSEE TRIED TO DISTIN GUISH THIS CASE WITH FACTS AND CIRCUMSTANCES AND ARGUED TO APPLY PA ST HISTORY OF THE CASE. THE ONUS IS ON THE ASSESSEE TO PROVE THES E PURCHASES AS GENUINE AND SUFFICIENT PURCHASES FROM THESE PART IES HAVE BEEN CLAIMED TO BE MADE BY HIM. THE ASSESSEE ALSO COULD NOT BE ABLE BE LEAD ANY EVIDENCE IN FURTHERANCE OF FILING OF CO NFIRMATORY LETTER OR MERELY SHOWING THAT THE PAYMENTS WERE MADE BY AC COUNT PAYEE CHEQUES. THE ASSESSEE WAS AWARE OF THE WHEREA BOUTS OF THE PARTIES AND HE SHOULD HAVE PRODUCED THESE PARTI ES BEFORE THE ASSESSING OFFICER FOR VERIFICATION OF PURCHASES, WH ICH COULD NOT BE DONE AT THE STAGE OF ASSESSMENT PROCEEDINGS. THE AD DITION ON ACCOUNT OF UNVERIFIABLE PURCHASES WERE MADE IN A.Y. 2006-07. THUS, PAST HISTORY OF THE ASSESSEE IS NOT RELIABLE AND DOCTORED. THIS FINDING IS ALSO GOT SUPPORT FROM THE RECENT DE CISION OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF VENUS A RTS & GEMS ORDER DATED 20/8/2014 WHEREIN IT HAS BEEN HELD THAT ORDER PASSED BY THE ITAT FOR CONFIRMING G.P. AFTER REJECT ION OF BOOKS OF ACCOUNTS ON THE BASIS OF VARIOUS DISCREPANCIES FOUN D BY THE ASSESSING OFFICER, THERE IS NO QUESTION OF LAW INVO LVED IN SUCH ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 11 PROFIT ESTIMATES. EVEN THE ASSESSEE MAY BE 100% EXP ORTER WHICH DOES NOT PRECLUDE THE ASSESSING OFFICER FROM ENQUIR ING INTO THE N.P. ON UNVERIFIABLE PURCHASES IS REASONABLE IN THI S CASE. ACCORDINGLY, THE ASSESSEE'S APPEAL IS PARTLY ALLOWE D.' THEREFORE, FOLLOWING THE DECISION OF HON'BLE ITAT, JAIPUR IN APPELLANT'S OWN CASE, THE DISALLOWANCE OF 25% OF TO TAL UNVERIFIABLE PURCHASES APPEARS TO BE ON HIGHER SIDE . DISALLOWANCE OF 15% OUT OF UNVERIFIABLE PURCHASES I S REASONABLE IN THE PRESENT CASE. HELD ACCORDINGLY. T HE APPELLANT GETS PARTIAL RELIEF ON THIS GROUND. THUS, GROUND NO . 1 AND ITS PARTS ARE TREATED AS PARTLY ALLOWED. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD CIT(A) HAS AFFIRMED THE REJECTION OF BOOKS OF ACCOUNTS ON ACCOUNT OF NON-GENUINE PURCHASES WHICH COULD NOT BE VERIFIED DURING THE COURSE OF ASSESSMENT PROCEEDING S RELYING ON THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN CAS E OF VIMAL SINGHVI (SUPRA). WE DONOT ANY INFIRMITY IN THE SAID FINDIN GS OF THE LD CIT(A) AND THE SAME IS HEREBY CONFIRMED. REGARDING DISALL OWANCE OF 25% OF THE ALLEGED PURCHASES, THE LD CIT(A) HAS FOLLOWED T HE COORDINATE BENCH DECISION IN ASSESSEES OWN CASE FOR A.Y 2008-09 AND HAS RESTRICTED THE DISALLOWANCE TO 15% OF ALLEGED PURCHASES. IT IS AL SO NOTED FROM THE ASSESSEES ASSESSMENT HISTORY, FOR INSTANCE, A.Y 20 10-11, WHERE UNDER SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE, DISALL OWANCE OF 15% OF UNVERIFIABLE PURCHASES WERE MADE BY THE LD CIT(A) W HICH HAS BEEN AFFIRMED BY THE COORDINATE BENCH AND SIMILAR DISALL OWANCES HAVE BEEN MADE IN OTHER YEARS. IN LIGHT OF SAME, WE DONOT SE E ANY INFIRMITY IN THE ITA NO. 235/JP/2020 M/S G.B. IMPEX VS. ITO 12 FINDINGS OF THE LD CIT(A) IN RESTRICTING THE ADDITI ON TO 15% OF UNVERIFIED PURCHASES. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/04/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 01/04/2021. *SANTOSH VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S G.B. IMPEX, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ITO, WARD-6(3), JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 235/JP/2020} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR