M/s B.M.Chandra Jewellers., North 24 Parganas V. I.T.O. Wd-50(1),Kolkata, North 24 Parganas

ITA 285/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99910 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 08-02-2013
• Court: TRIBUNAL
• Department Lawyers: D LAHIRI
• Assessee Lawyers: N O N E
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA [BEFORE SHRI MAHAVIR SINGH, JM & SHRI M. BALAGANES H, AM] I.T.A NO. 285/KOL/2013 ASSESSMENT YEAR: 2007-08 M/S. B. M. CHANDRA JEWELLERS VS. INCOME-TAX OFFIC ER, WD-50(1), KOLKATA (PAN: AADFB1925C) ( APPELLANT ) ( RESPONDENT ) DATE OF HEARING: 09.10.2015 DATE OF PRONOUNCEMENT: 15.10.2015 FOR THE APPELLANT: N O N E FOR THE RESPONDENT: SHRI D. LAHIRI, JCIT ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XXXII, KOLKATA IN APPEAL NO. 06/XXXII/10-11/50(1)/KOL DATED 30.11.201 2. ASSESSMENT WAS FRAMED BY ITO, WD-50(1), KOLKATA U/S. 143(3)/147 OF THE INCOM E-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2007-08 VIDE ITS O RDER DATED 26.02.2010. 2. THE FIRST ISSUE IN THIS APPEAL OF ASSESSEE IS AG AINST THE ORDER OF CIT(A) CONFIRMING THE ADDITION MADE BY AO ON ACCOUNT OF BOGUS PURCHAS ES OF RS.8,52,556/-. FOR THIS, ASSESSEE HAS RAISED FOLLOWING GROUND NO.1: 1. THE LEARNED ASSESSING OFFICER IS BIASED IN CAL CULATING GOLD AT 18 CARETS WHICH IS NOT PRACTICABLE. HE DID NOT CONSIDER THAT THE PURCHASE PRICE OF 22 CARETS GOLD IS AS PER THE RATE SPECIFIED IN NEWS PAPER. SO THE REVISED THE COST OF PURCHASE OF GOLD IS NOT APPLICABLE IN OUR CASE. THE CALCULATION OF OLD GOLD AT 18 CARETS IS I MPRACTICAL AND WRONG. THEREFORE THE ADDITION OF RS. 8, 52,556.00 IS NOT CORRECT AND REQ UESTED TO BE RECTIFIED. THE COMMISSIONER OF INCOME TAX APPEAL IN HIS ORDER MENTIONED THAT NO EVIDENCE IN SUPPORT OF OUR CLAIM WAS SUBMITTED. IN FACT NO EVID ENCE WAS ASKED FOR. IT IS THE NORMAL BUSINESS PRACTICE TO DEDUCT 10% TO 20% IN WEIGHT FR OM THE OLD ORNAMENTS FOR IMPURITIES. IN THE RELEVANT CASE WE HAVE FOLLOWED THE SAME PRACTIC E THEN PAID TO THE INDIVIDUAL SELLER AT THE RATE PREVAILING ON THE DATE OF PURCHASE. THEREF ORE THE ADDITION MADE BY THE AO AND CONFIRMED BY CIT APPEAL IS NOT JUSTIFIED. THE CIT APPEAL IN HIS ORDER NOTED THAT NO SELLER CO ULD BE PRODUCED BEFORE THE AO AT THE TIME OF ASSESSMENT. THE SELLERS ARE MAINLY HOUSE WI VES FROM HOME OLD GOLD ORNAMENTS WERE PURCHASED AND PAYMENT FOR THEIR ORNAMENT GOLD WAS M ADE LONG BACK IT BECOME IRRELEVANT TO TRACE OUT THEM. SO THIS SHOULD NOT BE A GROUND O F REJECTION IN OUR CASE. 3. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE IS HAVING A JEWELLERY SHOP AT HABRA, DISTRICT NORTH 24 PARGANAS, WEST BENGAL. THE ASSESSEE PURCHASED GOLD ORNAMENTS FROM INDIVIDUALS AS WELL AS FROM REGISTER ED DEALERS. THE ASSESSEE PURCHASED GOLD ORNAMENTS WHICH ARE OF 22 CT. GOLD A ND THE RATES OF THIS ARE GIVEN IN THE BULLION EXCHANGE. BUT THE AO VALUED THIS GOLD ORNAMENTS AT 18 CT. INSTEAD OF 22 CT. DISCLOSED BY THE ASSESSEE. ASSESSEE CLAIMED BE FORE THE AO THAT IT HAD ALREADY 2 ITA NO.285/KOL/2013 B.M.CHANDRA JEWELLERS AY 2007-08 CLAIMED CERTAIN DEDUCTIONS VARYING FROM 10 TO 20% I N THE WEIGHT BUT THE AO DESPITE THIS FACT TAKEN PURCHASE PRICE OF GOLD ORNAMENTS AT 18 CT. AND DIFFERENTIAL WAS TREATED AS BOGUS PURCHASES. AGGRIEVED, ASSESSEE PREFERRED A PPEAL BEFORE CIT(A), WHO SIMPLY CONFIRMED THE ADDITION BY OBSERVING AS UNDER: I DULY CONSIDERED THE ASSESSMENT ORDER AND SUBMIS SION OF THE APPELLANT. THE APPELLANT TAKEN THE ARGUMENT THAT THE QUANTITY OF C OPPER & SILVER ALREADY DEDUCTED FROM THE WEIGHT. THE APPELLANT ACCEPTED IN THE SUB MISSION THAT THERE ARE 10 TO 15% OF COPPER AND SILVER COMPONENTS IN THE GOLD. THE A PPELLANT FAILED TO FILE ANY EVIDENCE WHICH PROVE THAT THE APPELLANT ALREADY DE DUCTED FROM THE WEIGHT OF COPPER AND SILVER FROM THE GROSS WEIGHT. THE ASSESSING OF FICER HAD GIVEN DETAIL FINDING IN THE ASSESSMENT ORDER. IN THE SPOT ENQUIRY MADE BY THE INSPECTOR ABOUT 25% PERSONS ARE NOT IN THE GIVEN ADDRESSES. THE APPELLANT ALSO FAILED TO PRODUCE THE SINGLE PERSON FROM WHOM THE OLD GOLD ORNAMENTS WAS PURCHAS ED. ALL THE PURCHASES ARE IN CASH. THE PURCHASES ARE NOT FULLY VERIFIABLE. THE ONUS ON THE APPELLANT TO PROVE THE GENUINENESS OF THE PURCHASES BUT APPELLANT FAILED T O PROVE THE GENUINENESS OF THE PURCHASES. CONSIDERING THE ABOVE FINDING AND FACTS OF THE CAS E, I AM OF THE VIEW THAT THE ADDITION MADE BY THE AO OF RS.8,52,556/- IS AS PER LAW. HENCE, I CONFIRM THE ADDITION MADE BY THE AO OF RS.8,52,556/- AS BOGUS P URCHASES. THIS GROUND IS NOT ALLOWED. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US 4. WE HAVE GONE THROUGH THE ORDER OF CIT(A) AND FOU ND THAT THE ORDER OF CIT(A) IS CRYPTIC ONE AND NON-SPEAKING. THERE IS N O IOTA OF MERITS DISCUSSED IN THE ORDERS BY CIT(A). THE DUTY OF THE CIT(A) IS TO PASS A SPEAKING ORDER AFTER CONTROVERTING ALL THE FACTS GIVEN BY ASSESSEE AND D ECIDE THE ISSUE WITH REASONS. HENCE, WE QUASH THE ORDER OF CIT(A) AND REMIT THE A PPEALS BACK TO HIS FILE FOR FRESH ADJUDICATION WITH THE ABOVE DIRECTION. WE OR DER ACCORDINGLY. THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. THE NEXT ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE DISALLOWANCE ON ACCOUNT OF SUNDRY EXPENSES OF R S.6707/- FOR NON-RECONCILIATION OF ACCOUNT OF MANNA STORES. FOR THIS, ASSESSEE HAS RAI SED FOLLOWING GROUND NO.3: 3. FOR THAT THE CIT(A) ERRED IN LAW IN CONFIRMING THE DISALLOWANCE OF RS.6707/- BEING SUNDRY EXPENSES FOR ALLEGED NON RECONCILIATION OF A CCOUNT OF MANNA STORES WHEN THE ENTIRE EXPENDITURE WAS PROVED WITH VOUCHERS & BILLS. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO DISALLOWED THE SUNDRY EX PENSES CLAIMED BY ASSESSEE BEING THE DIFFERENCE IN SALES SHOWN BY MANNA STORES AT RS.1,2 7,968/- AND SHOWN BY THE ASSESSEE AT RS.1,34,675/- BEING DIFFERENCE OF RS.6,707/-.THE AS SESSEE NOW BEFORE US FILED RECONCILIATION OF PAYMENTS MADE TO MANNA STORES AT RS.1,34,675/- ALONG WITH BILLS. WE 3 ITA NO.285/KOL/2013 B.M.CHANDRA JEWELLERS AY 2007-08 FIND THAT RECONCILIATION FILED BY ASSESSEE SEEMS AL RIGHT AND THIS BEING A SMALL ISSUE, WE DELETE THE ADDITION. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 15.10.2 015. SD/- SD/- (M. BALAGANESH) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 15TH OCTOBER, 2015 JD. SR. P.S COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT M/S. B. M. CHANDRA JEWELLERS, 109, JESS ORE ROAD, HABRA, BARASAT, 24 PGS (N)-743263 2 RESPONDENT ITO, WD-50(1), KOLKATA 3 . THE CIT(A), KOLKATA 4. 5. CIT KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .