SANJAY KUMAR JAIN, Jaipur V. ASST COMMISSIONER OF INCOME TAX, Jaipur

ITA 44/JPR/2023

AI Insights

The case involves Shri Sanjay Kumar Jain, who appealed against the order of the National Faceless Appeal Centre (NFAC/CIT(A)), which confirmed the addition of Rs. 15,00,000 to his income for the assessment year 2016-17. The addition was initially made by the Assessing Officer (AO) due to the non-production of complete books of accounts and supporting documents during the assessment proceedings. The CIT(A) upheld the AO's decision, noting that the assessee failed to provide necessary documents despite multiple opportunities. The Tribunal, after reviewing the submissions and the records, decided the case on merits in the absence of the assessee or any representative, confirming the lower authorities' decisions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132384 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 15-05-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 24-01-2023
• Other Referred Cases: CIT vs. K.Y. Pillaih and Sonce (1967) 63 ITR 411 (SC), CIT vs. Surjit Singh Mahesh Kumar (1994) 210 ITR 83 (All H.C.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Rejection of books of accounts
• Section: 145; 144; 143(3); 143(2); 44AB; 145(3)

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR Mk0 ,l- lhrky{eh]U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA No. 44/JPR/2023 fu/kZkj.k o"kZ@Assessment Year : 2016-17 Shri Sanjay Kumar Jain Kotawala Building, Nawab Ki Haweli, Tripoliya Bazar, Jaipur- 302001. cuke Vs. ACIT, Circle-1, Jaipur. LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABKPJ 0316 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : None jktLo dh vksjls@Revenue by: Smt.MonishaChourdhary (Addl.CIT) lquokbZ dh rkjh[k@Date of Hearing :16/05/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 28/06/2023 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal is filed by the assessee aggrieved from the order of the National Faceless Appeal Centre, Delhi [herein after referred to as “NFAC/CIT(A)”] for the assessment year 2016-17 dated 23.11.2022,which in turn arises from the order passed by the ACIT, Circle-1, Alwar passed under Section 143(3)of the Income Tax Act, 1961 (in short 'the Act') dated 13.12.2018. 2 ITA No. 44/JPR/2023 Sanjay Kumar Jain vs. ACIT 2. The assessee has raised the following ground:- “ 1.1The learned AO has erred in making addition of Rs. 15,00,000/- u/s 143(3) of the I.T. Act, 1961. 1.2 The learned AO has erred in rejecting books of accounts of the assessee u/s 145(3) of the I.T. Act, 1961. 2. The appellant craves her rights to add, delete, amend any of the grounds on or before the hearing.” 3. None appeared on behalf of the assessee however, the Bench decided to proceed the matter on merit based on the materials available on record, concerning the issue in question. 4. The brief facts of the case are that the assesseeis engaged in the business of trading of jewellery (bullions) and share/ commodity/futures. The assessee is also a partner in a partnership firm M/s Govind paper Traders from which the assessee received inter on capital and share of profit. The assessee has filed its return of income on 17.10.2016 declaring total income of Rs. 16,08,350/-. The case was selected for scrutiny assessment through CASS under complete scrutiny’ and notice u/s 143(2) of the Act was issued and duly served upon the assessee. Further, notice u/s 142(1) of the Act annexing show cause to ex-parte has been issued and served upon the assessee. 3 ITA No. 44/JPR/2023 Sanjay Kumar Jain vs. ACIT 5. Aggrieved, from the said order of assessment the assessee has filed the appeal before the ld. CIT(A). The ld. CIT(A) after hearing the contention of the assessee dismissed the appeal of the assessee by giving following findings on the issue:- “6.3 I have perused the matter and the relevant factors to be considered in this case including the surrounding circumstances, objective facts, evidences adduced and material available on record. 6.4 In this regard, the appellant's submission is that the appellant had prepared complete books of accounts and submitted all relevant details during the assessment proceedings including ledger for unsecured loans, creditors, fixed assets, loans & advances, stock summary, sales and expenses ledgers. Further, he has stated that the appellant has maintained regular books of accounts including stock register and the books were duly audited u/s 44AB and hence the rejection of books of accounts was not correct. 6.5 It is noticed from the assessment order, the appellant has not produced books of account of trading bullions &jewellery along-with bills/vouchers of all expenses debited in P&L account. The stock register could not be verified, hence details pertaining to trading and manufacturing concern in point no. 35(a) and 35(b) and material consumed/finished goods produced ratio in point no. 40 of Form 3CD had not been given. In the present case, proper opportunity was given to the appellant to produce all relevant material/facts of the case, but neither the appellant nor his AR produce books of account of trading of bullions &jewellery and bills/vouchers. Thus, it is evident that the appellant intentionally resorted the delaying tactics and not produced the books of accounts. In absence of books of account and bills/vouchers of all the expenses so debited in P&L account could not be justified and therefore, the AO has no option other than to reject the books of account as the primary onus for proving the 4 ITA No. 44/JPR/2023 Sanjay Kumar Jain vs. ACIT genuineness, completeness and correctness of books of account lies only over the appellant. 6.6 Section 145 of the Income Tax Act 1961, lays down that income chargeable under the head "Profit and gains of business or profession" or "Income from other sources" shall, subject to the accounting standards notified by the Central Government in the Official Gazette, be computed in accordance with either cash or mercantile system of accounting regularly employed by the assessee, Subsection 3 of Section 145 laysdown that where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting namely cash or mercantile systems or accounting standards as notified by the Central Government, have not been regularly followed by the assessee, the Assessing Officer may make an assessment in the manner provided in Section 144 of the Income Tax Act, 1961. 6.7 In view of the above and on the basis of the detailed findings and reasons given by the AO in his assessment order, which have not been explained by the appellant and no evidence to the contrary has been submitted either at the stage of assessment or appeal. Hence, reject the books of accounts of trading of bullions &jewellery of the appellant u/s 145(3) of the Act by invoking the provisions of section 145(3) of the Act as the appellant did not produce books of account, bills/vouchers of all the expenses, the addition made by the AQ amounting to Rs. 15,00,000/- is hereby confirmed and ground of appeal in this regard is dismissed.” 6. Aggrieved by the order of CIT(A) the assessee has filed the appeal before us. The assesee or his representative never appeared before us for more than 7 hearings or never filed any written submissions or documents. 5 ITA No. 44/JPR/2023 Sanjay Kumar Jain vs. ACIT 7. We have heard the ld. DR and perused the material available on record. None appeared on behalf of the assessee during the course of hearing. We observed that the ld. AR for the assessee was absent for 7 hearing, so toady we opinioned that based on the order of the lower authorities and the submissions made by the ld. DR decided to pass the order on merit in absence of the assessee. The main issue before us the addition of Rs. 15,00,000/- u/s 143(3) of the I.T. Act, 1961 and rejecting the books of accounts of the assessee u/s 145(3) of the Act. Before us, the assessee did not appear and has not controverted the finding of the ld. CIT(A) or ld. AO. We note from the assessment order during the assessment proceedings, the assessee did not filed any submissions and the assessee has filed part reply. We observed that the ld. AR for the assessee has not produced books of account, bills/vouchers of all the expenses debited in Profit and loss account in the assessment proceedings and the ld. CIT(A). The Assessing Officer arrived the finding in absence of books of accounts of trading of bullions and jewellery so debited in the profit and loss account could not be justified, where the Assessing Officer is not satisfied and relied by the Hon’ble Supreme Court in case of CIT vs. K.Y. Pillaih and Sonce (1967) 63 ITR 411 (SC) and CIT vs. Surjit Singh Mahesh Kumar (1994) 210 ITR 83 (All H.C.) , wherein it was held that “where books of account are rejected or not produced, then AO may compute the profits by applying a flat rate of a certain percentage to the admitted or estimated turnover 6 ITA No. 44/JPR/2023 Sanjay Kumar Jain vs. ACIT or gross receipts.” And made addition of Rs. 15,00,000/- to the total income of the assessee in the year under consideration. We further noted that during the appellate proceedings asseseehas not furnished any evidences, where the ld. CIT(A) relied on the detail findings and reasons given by the ld. AO in his assessment order which have not been explained by the assessee and no evidence to the contrary has been submitted either at the stage of assessment or appellate. Before us taking into consideration the facts and circumstances of the case and the submissions by the ld. DR, the Bench confirm and uphold the order of the ld. CIT(A) as per rejection of books of accounts of trading of bullions and jewellery of the assessee u/s 145(3) of the Act by invoking the provisions of Section 145(3) of the Act as the assessee did not procuded books of account, bills/vouchers of all the expenses even before us and the addition made by the AO amounting to Rs. 15,00,000/- is hereby confirmed and ground of appeal in this regard is dismissed. In the result,the appeal of the assessee is dismissed. Order pronounced in the open court on 28/06/2023. Sd/- Sd/- ¼jkBksM deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28/06/2023 *Santosh 7 ITA No. 44/JPR/2023 Sanjay Kumar Jain vs. ACIT vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. vihykFkhZ@The Appellant- Shri Sanjay Kumar Jain, Jaipur. 2. izR;FkhZ@ The Respondent- ACIT, Circle-1, Jaipur. 3. vk;djvk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZQkbZy@ Guard File (ITA No. 44/JPR/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar