SHRI NITESH PAREEK, Jaipur V. ITO, Jaipur

ITA 378/JPR/2012

• Counselvise Citation: 37823114 RSA 2012
• Duration Of Justice: 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: G M MEHTA
• Keywords: Accommodation entries

Judgement Text

ITA 378-12 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH : SMC JAIPUR (BEFORE SHRI R.K.GUPTA) ITA NO.378/JP/2012 ASSTT. YEAR : 2007-08 SHRI NITESH PAREEK, VS. THE INCOME TAX OFFICER, JAIPUR. WARD-4(2), JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G.M.MEHTA RESPONDENT BY : SHRI D.K.MEENA DATE OF HEARING : 27.06.2012 DATE OF PRONOUNCEMENT : 06.07.2012 ORDER DATE OF ORDER : 06.07.2012 THIS IS AN APPEAL BY ASSESSEE AGAINST THE ORDER OF LD.CIT(A) RELATING TO ASSESSMENT YEAR2007-08. 2. THE ASSEESSEE IS OBJECTING CONFIRMING THE APPLIC ATION OF PROVISION OF U/S 145(3) AND CONFIRMING BROKERAGE INCOME OF RS.60,000/- AND ADDITION OF RS.1,62,087/- BY ESTIMATING TRADING ADDITION. 3. DURING THE ASSESSMENT PROCEEDING AO NOTICED THAT THE ASSESSEE HAD MADE HUGE PURCHASE OF GEM STONES FROM UNREGISTERED DEALER. TH E G.P.RATE OF 0.86% HAD BEEN DECLARED BY THE ASSESSEE WHICH WAS VERY LOW. THE A O ALSO NOTICED THAT ASSESSEE HAD EMPLOYED A CAPITAL OF RS.3.2 LACS ONLY WHEREAS TURN OVER OF THE ASSESSEE HAS BEEN SHOWN 4.98 CRORE. THE AO SUMMONED THE ASSESSEE WHERE HE ADMITTED THAT HE IS A SMALL BROKER OF SEMI PRECIOUS STONES. HE WAS SUPPLY GOODS TO BIG TRADER AND ENTIRES SALES WERE - 2 - RECEIVED IN CASH. HE ALSO ADMITTED THAT HE STARTED THE BUSINESS OF PROVIDING ACCOMMODATION BILLS ON WHICH HE WAS USED TO CHARGED BROKERAGE 0.8%. 4. IN VIEW OF THESE FACTS THE AO REJECTED BOOKS OF ACCOUNT AND ESTIMATED HIS BROKERAGE INCOME AT RS.60,000/- AND NET COMMISSION INCOME FOR PROVIDING ACCOMMODATION BILLS AT RS.3,07,287/-. THE CIT(A) HA S ALSO CONFIRMED THE ACTION OF THE AO. 5. LD.A/R FILE WRITTEN SUBMISSION ON THE OTHER HAND LD.D/R PLACED RELIANCE O THE ORDER OF CIT(A). 6. AFTER CONSIDERING THE SUBMISSION PLACED THE MATE RIAL ON RECORD, I FOUND THAT ASSESSEE DESERVED TO SUCCEED IN IS APPEAL IN PART. THERE WERE SO MANY DEFECTS IN BOOKS OF ACCOUNTS THEREFORE INVOKING PROVISION OF SECTION 1 45(3) IS JUSTIFIED. ACCORDINGLY, I CONFIRMED THE REJECTION OF BOOKS OF ACCOUNT. 7. REGARDING BROKERAGE INCOME AND INCOME ON ACCOUNT OF PROVIDING ACCOMMODATION ENTRIES, I NOTED THAT IN EARLIER YEAR THE ASSESSEE HAS SHOWN G.P.RATE OF 0.71% ON A TOTAL TURNOVER OF RS.6.53 CRORE WHEREAS IN THIS YEAR THE ASSESSEE HAS SHOWN G.P.RATE OF 0.83% ON TURNOVER OF RS.4.98 CRORE. RESULT OF EARLIER YEA R HAS BEEN ACCEPTED BY THE DEPARTMENT. DEPARTMENT HAS MADE A SEPARATE ADDITION OF RS.60,0 00/- ON ACCOUNT OF BROKERAGE WHEREAS ON ADDITION OF RS.1,62,087/- HAS BEEN ADDED SEPARATELY ON ACCOUNT OF ACCOMMODATION OF ISSUING BILLS. THERE IS NO EVIDENC E ON RECORD THAT ASSESSEE HAS EARNED BROKERAGE COMMISSION SEPARATELY. IF THERE WAS ANY C OMMISSION INCOME I.E. INCLUDING IN THE INCOME SHOWN ON ACCOUNT OF PROVIDING BILLS ETC. THEREFORE, SEPARATE ADDITION IS NOT JUSTIFIED, ACCORDINGLY, I DELETE THE ADDITION OF RS .60,000/-. - 3 - REGARDING ESTIMATED INCOME OF RS.3,07,287/- AGAINS T INCOME OF RS.1,45,200/-. I FEEL THAT ESTIMATE MADE BY ON HIGHER SIDE. IN MY VI EW IF AN ADDITION OF RS.75,000/- IS SUSTAINED ON THIS ACCOUNT THAT WILL MEET THE END OF JUSTICE. I ORDER ACCORDINGLY. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. 10. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 06 .07.2012. SD/- (R.K.GUPTA) JUDICIAL MEMBER JAIPUR, *BASANT* COPY FORWARDED TO :- NITESH PAREEK, JAIPUR. THE ITO, WARD-4(2), JAIPUR. THE CIT(A) THE CIT THE D/R GUARD FILE (ITA NO.378/JP/12) BY ORDER AR, ITAT, JAIPUR.