SHRI GUATAM CHAND BINAIKIA, Jaipur V. ITO, Jaipur

ITA 271/JPR/2012

• Counselvise Citation: 27123114 RSA 2012
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 21-03-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Bogus purchase

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 271/JP/2012 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 SHRI GAUTAM CHAND BINAIKIA, D-3, RAMAN MARG, TILAK NAGAR, JAIPUR. CUKE VS. THE I.T.O., WARD-6(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AGEPB 7962 L VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : WRITTEN SUBMISSION JKTLO DH VKSJ LS @ REVENUE BY : SHRI AJAY MALIK (ADDL.CIT)) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 04/12/2014 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 13/02/2015 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 23/01/2012 BY THE LEARNED CIT(A)-II, JAIPUR FOR A.Y . 2007-08. RESPECTIVE GROUNDS OF APPEAL ARE AS UNDER: 1. THE LEARNED CIT(A) ERRED IN LAW AS WELL AS ON TH E FACTS OF THE PRESENT CASE IN PASSING THE ORDER EX PARTE WITHO UT PROVIDING THE ASSESSEE AN OPPORTUNITY OF BEING HEAR D. ITA 271/JP/2012_ GAUTAM CHAND BINAIKIA VS. ITO 2 2. THE LEARNED CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN NOT ACCEPTING THE BOOK RESULT O F THE ASSESSEE THOUGH THE SAME WERE BETTER FROM THE PRECED ING YEAR IN ALL RESPECT. 3. THE LEARNED CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN UPHOLDING THE DISALLOWANCE OF PURCHASES @ 25% WHILE HOLDING UNVERIFIABLE AND CONSEQUENTLY SUSTAINING THE ADDITION OF RS. 970255/ -. 4. THE LEARNED CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN NOT FOLLOWING THE DIRECT DECISIO NS OF HONBLE JAIPUR BENCH BEING APPLICABLE ON THE FACTS OF THE PRESENT CASE. 5. THE LEARNED CIT(A) ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN SUSTAINING THE FOLLOWING DISALLO WANCES: RS. 4595/- TELEPHONE EXP. RS. 10600/- TRAVELLING EXP. RS. 5107 CONVEYANCE EXP. 6. THE APPELLANT PRAYS YOUR HONOURS INDULGENCE TO A DD, AMEND, MODIFY OR DELETE ALL OR ANY GROUND OF APPEAL . 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. WRITTEN SUBMISSIONS ARE FILED, WHICH ARE TAKEN INTO CONSIDERATION. IT IS CONTENDED IN THE WRITTEN SUBMISSIONS, THAT IN A RECENT DECISION IN TH E CASE OF SHRI ANUJ KUMAR VARSHNEY & ORS. VS. ITO & ORS. IN ITA NO. 187/ JP/2012 DATED 22/10/2014, THE HONBLE ITAT HAS TAKEN A VIEW THAT 15 % OF SUCH UNVERIFIABLE PURCHASES OF SEMI PRECIOUS STONES SHOU LD BE SUSTAINED. THE ITA 271/JP/2012_ GAUTAM CHAND BINAIKIA VS. ITO 3 FACTS OF THE PRESENT CASE, THEREFORE, THE SHRI ANUJ KUMAR VARSHNEY DECISION MAY BE APPLIED IN THE INSTANT CASE. 3. APROPOS TELEPHONE, TRAVELLING AND CONVEYANCE EXP ENSES, IT IS PLEADED THAT THE EXPENDITURE WAS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OF THE ASSESSEE, THEREFORE, THERE WAS NO PERSONAL ELEMENT INVOLVED THEREIN. THE LEARNED ASSES SING OFFICER HAS NOT POINTED OUT ANY SPECIFIC ITEMS IN THIS RESPECT, THEREFORE, THE ADDITIONS ARE UNJUSTIFIED AND IT SHOULD BE DELETED. 4. LEARNED D.R. CONTENDS THAT THE DEPARTMENT MAY FI LE APPEAL AGAINST THE ORDER OF THE ITAT IN THE CASE OF ANUJ K UMAR VARSHNEY, BEFORE HIGH COURT . 5. APROPOS THE OTHER ADDITIONS, THE LEARNED CIT(A) R ELIED ON VARIOUS JUDGMENTS I.E. DECISION IN THE CASE OF SURESH L. AG ARWAL VS ITO (2010- TIOL 649 ITAT), DECISION OF HONBLE GUJARAT HIGH COU RT IN THE CASE OF CIT VS. CHANDRAVILAS HOTEL (164 ITR 102) AND HONBLE DELHI HIGH COURT DECISION IN THE CASE OF GOODYEAR INDIA LTD. VS. CIT (246 ITR 116). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THIS B ENCH IN THE CASE OF SHRI ANUJ KUMAR VARSHNEY & ORS. VS. ITO & ORS. IN I TA NO. 187/JP/2012 DATED 22/10/2014 HAS HELD AS UNDER:- ITA 271/JP/2012_ GAUTAM CHAND BINAIKIA VS. ITO 4 WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. AS DI SCUSSED IN ABOVE CASES, THE MATERIAL AVAILABLE ON RECORD ESTAB LISHED THAT IN JAIPUR, A RAMPANT PRACTICE IS IN VOGUE TO GET AND I SSUE ACCOMMODATION BILLS OF PURCHASES TO DEFLATE THE PRO FIT. THE LEARNED ASSESSING OFFICER MADE DISALLOWANCE @ 25% OF SUCH BOGUS PURCHASES ON THE BASIS OF DECISION IN THE CAS E OF SANJAY OIL CAKE INDUSTRIES AND VIJAY PROTEIN LTD. (SUPRA). IN OUR VIEW THE 25% DISALLOWANCE APPEARS TO BE HIGHER SIDE, THER EFORE, KEEPING IN VIEW OF THE FACTS OF THE ASSESSEES CASE AS WELL AS OTHER CASES AS DISCUSSED ABOVE, WE FEEL THAT 15% DIS ALLOWANCE OUT OF BOGUS PURCHASES IS REASONABLE ON UNVERIFIABL E PURCHASES AND WILL MEET THE ENDS OF JUSTICE. THE REJECTION OF B OOKS OF ACCOUNT IS JUSTIFIED. THE ASSESSEE GETS RELIEF PART LY. FACTS AND CIRCUMSTANCES OF THIS CASE ARE SIMILAR CO NSEQUENTLY, WE FIND MERIT IN THE WRITTEN SUBMISSION OF THE ASSESSE E TO RESTRICT THE DISALLOWANCE TO 15%, REJECTION OF BOOKS OF ACCOUNT I S UPHELD. THUS WE HOLD THAT THE ADDITION QUA THESE UNVERIFIED PURCHAS ES SHALL BE RESTRICTED TO 15%, ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO WORK OUT THE DISALLOWANCE. 7. APROPOS THE REMAINING EXPENDITURES I.E. TELEPHON E, TRAVELLING AND CONVEYANCE, WE FIND NO INFIRMITY IN THE ORDERS OF LO WER AUTHORITIES, WHICH ARE SUPPORTED BY THE ABOVE MENTIONED JUDICIAL PRECEDENTS. EXCEPT ORAL CONTENTION ASSESSEE COULD NOT DEMONSTRA TE ABSENCE OF ITA 271/JP/2012_ GAUTAM CHAND BINAIKIA VS. ITO 5 PERSONAL ELEMENT IN THESE EXPENDITURES BESIDES THE BOOKS OF ACCOUNT OF THE ASSESSEE REMAINED REJECTED. IN VIEW THEREOF, THE ESTIMATE MADE BY THE LOWER AUTHORITIES IS UPHELD. 8. IN THE RESULT, THE ASSESSEE APPEAL IS PARTLY ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/02/2015. SD/- SD/- VH-VKJ-EHUK VKJ-IH-RKSYKUH (T.R. MEENA) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 13 TH FEBRUARY, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI GAUTAM CHAND BINAIKIA, JAIPUR 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 6(1), JAIPUR. 3. VK;DJ VK;QDR @ CIT(A)-II, JAIPUR 4. VK;DJ VK;QDR @ CIT, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 271/JP/2012) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR