SHRI NAVRATAN JOHARI, JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, JAIPUR

ITA 442/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7684 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 29-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROONIPAL
• Keywords: Bogus purchase; Rejection of books of accounts; Accommodation entries
• Section: 143(3); 234B; 133(6); 143(2)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S,B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 442/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2013-14 SHRI NAVRATAN JOHARI T-355, DHAMANI MARKET, STREET CHOURA RASTA, JAIPUR. CUKE VS. THE ACIT, CIRCLE-1, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACKPJ4333R VIHYKFKHZ@ APPELLAN T IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI S.L.JAIN (C.A.) & SHRI ASHOK KUMAR GUPTA (ADV.) JKTLO DH VKSJ LS @ REVENUE BY : SMT. ROONIPAL (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING :13/01/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 27/01/2020 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 12.02.2019 OF THE LD. CIT (A)-I, JAIPUR FOR THE ASS ESSMENT YEAR 2013-14. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. ASSESSMENT AGAINST CBDT CIRCULAR :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN UPHOLD ING THE ASSUMPTION OF JURISDICTION OF THE LD. ACIT TO INITI ATE ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 2 PROCEEDINGS U/S 143(2) OF THE ACT AND, FRAME ASSESS MENT U/S 143(3) OF THE ACT DESPITE THE FACT THAT INITIATION OF PROCEEDING WAS NOT IN ACCORDANCE WITH THE INSTRUCTION ISSUED B Y CENTRAL BOARD OF DIRECT TAXES FOR SELECTION OF CASES FOR TH E FINANCIAL YEAR 2012-13. 2. INVOCATION OF SECTION 145(3) IS BAD :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIRMING AP PLICATION OF PROVISIONS OF SECTION 145(3) BY LD. AO BY ALLEGING CERTAIN PURCHASES TO THE TUNE OF RS. 94,23,653/- MADE FROM FIVE PARTIES AS UNDER S.NO. NAME OF THE PARTY AMOUNT OF THE PURCHASES MADE IN RS. 1. M/S SHREE ABHUSHAN RS. 25,91,381/- 2. M/S R.R.GEMS RS. 32,87,355/- 3. M/S RED ROSE ENTERPRISE RS. 13,44,276/- 4. M/S PARVATI GEMS RS. 12,63,067/- 5. M/S ANUSHREE DIAM RS. 9,37,574/- TOTAL 94,23,653/- THUS, THE ACTION OF LD. CIT(A) IN CONFIRMING THE PU RCHASES MADE FROM ABOVE PARTIES AS UNVERIFIABLE DESERVES TO BE H ELD BAD IN LAW AND THE CONSEQUENT ADDITION DESERVES TO BE DELETED. 3. 25% TRADING ADDITION OF RS.23,55,913/- ON UNVERI FIED PURCHASES:- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIRMING TR ADING ADDITION OF RS. 23,55,913/- BEING 25% OF THE ALLEGED UNVERIFIAB LE PURCHASES OF ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 3 RS. 94,23,653/ - ARBITRARILY, WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCE OF THE CASE AND THE SUBMISSION MADE BE FORE HIM. THUS, THE ADDITION OF RS. 23,55,653/- DESERVES TO B E DELETED. 4. BOOKS OF ACCOUNT AND ENTRIES THEREIN -EVIDENTIA RY VALUE :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN NOT ACCEPTING BOOKS OF ACCOUNT MAINTAINED IN THE REGULAR COURSE OF BUSINESS WHICH ARE RELEVANT AND AFFORD PRIMA FACIE PROOF OF THE ENTRIES AND THE COR RECTNESS. - TOLARAM DAGA VS CIT, (1966) 59 ITR 632, 636 ( AGGAM ) 5. ASSESSMENT BASED ON MERE CONJECTURE IS BAD THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. CIT(A) HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIRMING AS SESSMENT BASED ON MERE CONJECTURE, SURMISE OR SUSPICION OR IRRELEV ANT AND INADMISSIBLE EVIDENCE AND MATERIAL IS INVALID AND U NSUSTAINABLE IN LAW. 6. FAILURE TO ISSUE PROPER SHOW CAUSE NOTICE :- THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. AO HAS GROSSLY ERRED IN LAW AND FACTS IN WHERE HE PROPOSES TO MAKE ADDITIONS OR DISALLOWANCES, THE ASSESSEE WOULD BE G IVEN A FAIR OPPORTUNITY TO EXPLAIN HIS POSITION ON THE PROPOSED ADDITIONS/ DISALLOWANCE IN ACCORDANCE WITH THE PRINCIPLE OF NA TURAL JUSTICE. IN THIS REGARD THE AO SHALL ISSUE AN APPROPRIATE SHOW- CAUSE NOTICE DULY INDICATING THE REASONS FOR THE PROPOSED ADDITIONS/D ISALLOWANCES ALONG WITH NECESSARY EVIDENCES. WHICH IS MANDATORY AS PER CBDT CIRCULAR. 7. INTEREST LEVIED U/S 234A, 234B AND 234C THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE LD. AO HAS GROSSLY ERRED IN LAW AND FACTS IN BY CONFIRMING IN CHARGING INTEREST U/S, 234(A), 234(B) & 234(C). ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 4 8. THAT THE APPELLANT RESERVES HIS RIGHT TO ADD, AM END OR ALTER THE GROUND OF APPEAL ON OR BEFORE THE DATE OF APPEAL HE ARING. 2. THE ASSESSEE IS A PROPRIETOR OF M/S TARKESH ART JEWELLERS DEALING IN TRADING EXPORT OF SILVER & GOLD JEWELLERY AS WEL L AS BULLION. THE ASSESSEE FILED ITS RETURN OF INCOME ON 28.09.2013 D ECLARING TOTAL INCOME OF RS. 41,42,660/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSUED NOTICE U/S 133(6) OF THE ACT TO SIX PARTI ES FROM WHOM THE ASSESSEE HAS MADE PURCHASES. OUT OF THE SIX NOTICES ISSUED ONLY ONE PARTY HAS MADE A PARTIAL COMPLIANCE AND FOUR OF THE M COME BACK UNSERVED. ACCORDINGLY, THE AO ASKED THE ASSESSEE TO PRODUCE THE PARTIES FOR VERIFICATION. SINCE THE ASSESSEE COULD NOT PRODUCE SUPPLIERS BEFORE THE AO, THEREFORE, THE AO DOUBTED PURCHASE M ADE BY THE ASSESSEE FROM THESE SIX SUPPLIERS AND SUBSEQUENTLY REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE BY INVOKING THE PROVISI ONS OF SECTION 145(3) OF THE ACT. THE ASSESSING OFFICER THEN MADE A DISAL LOWANCE OF 25% OF THE PURCHASES MADE FROM FIVE PARTIES TO THE TUNE OF RS. 94,23,653/- WHICH AMOUNT TO RS. 23,55,913/-. AGAINST THE ACTION OF THE AO THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A) AND CHALLENGED THE REJECTION OF BOOKS OF ACCOUNTS AS WELL AS CONSEQUEN T ADDITION MADE BY THE AO. THE LD. CIT(A) HAS CONFIRMED THE REJECTION OF BOOKS OF ACCOUNT ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 5 U/S 145(3) OF THE ACT. AS REGARDS THE ADDITION MADE BY THE AO BEING 25% OF THE UNVERIFIABLE PURCHASES THE LD. CIT(A) HA S TOOK A DIFFERENT APPROACH AND HELD THAT THE INCOME OF THE ASSESSEE I S REQUIRED TO BE ESTIMATED BY APPLYING AVERAGE GP DECLARED BY THE AS SESSEE IN THE PRECEDING YEARS. SINCE THE ADDITION WOULD HAVE BEEN MORE THAN THE ADDITION MADE BY THE AO, THEREFORE, THE LD. CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE AO OF RS. 23,55,913/-. 3. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT THE ENTIRE PURCHASES HAVE CORRESPONDING SALES AND THERE FORE, WHEN THE SALE IS NOT UNDISPUTED THEN PURCHASES CANNOT BE DOUBTED. THE ASSESSING OFFICER HAS DOUBTED PURCHASES DUE TO THE REASONS TH AT THE ASSESSEE COULD NOT PRODUCE SUPPLIERS FOR VERIFICATION, THERE FORE, THE ACTION OF REJECTION OF BOOKS OF ACCOUNT IS NOT JUSTIFIED AND VALID. HE HAS FURTHER CONTENDED THAT EVEN THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS ALSO HIGHLY ARBITRARY AND UNJUSTIFIE D WHEN THE LD. CIT(A) HAS ACCEPTED THE FACT THAT IN THE PRECEDING YEARS T HE ASSESSEE WAS DOING TRADING IN THE PRECIOUS AND SEMI PRECIOUS STO NE JEVELLERY AND THE TURNOVER OF THE ASSESSEE WAS VERY LESS WHEREAS DURI NG THE YEAR UNDER CONSIDERATION THE TURNOVER IS MAINLY FROM SALE FROM EXPORT OF THE BULLION AS WELL AS GOLD JEWELLERY AND THEREFORE, THE GP DEC LARED BY THE ASSESSEE ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 6 IN THE PRECEDING YEARS CANNOT BE COMPARED WITH THE GP UNDER CONSIDERATION WHEN 99% OF THE SALE IS EXPORT OF BUL LION. THUS, THE LD. AR HAS SUBMITTED THAT THE ADDITION SUSTAINED BY THE LD. CIT(A) BY CONSIDERING THE GP OF THE PRECEDING TWO YEARS IS HI GHLY ARBITRARY WHEN THE ASSESSEE HAS ALREADY EXPLAINED THE DECIDING IN GP IS DUE TO EXPORT OF BULLION CONSISTING 99% OF THE TOTAL TURNOVER AND FURTHER SALE OF THE GOLD JEWELLERY IN COMPARISON TO THE SALE OF PRECIOU S AND SEMI PRECIOUS STONE JEWELLERY IN THE PRECEDING YEARS. HE HAS FURT HER CONTENDED THAT THE TOTAL TURNOVER FOR THE YEAR UNDER CONSIDERATION IS RS. 53.56 CRORE IN COMPARISON TO RS. 2.72 CRORE FOR THE ASSESSMENT YEA R 2010-11 AND RS. 4.17 CRORE FOR THE ASSESSMENT YEAR 2011-12. THUS, T HE LD. AR HAS SUBMITTED THAT IN VIEW OF THE FACTS AND CIRCUMSTANC ES AS EXPLAINED BEFORE THE LOWER AUTHORITIES THE ADDITION SUSTAINED THE LD. CIT(A) MAY BE DELETED. 4. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT THE LD. CIT(A) HAS ALREADY CONSIDERED THE ESTIMATION OF INCOME OF THE ASSESSEE BY APPLYING REASONABLE CRITERIA BEING AVERAGE OF GP DE CLARED IN THE PRECEDING YEARS. SINCE, THE ADDITION WOULD HAVE BEE N MUCH MORE THEN THE ADDITION MADE BY THE AO HAD THE AVERAGE GP APPL IED FOR ESTIMATION OF INCOME, THEREFORE, THE LD. CIT(A) AS RESTRICTED THE ADDITION ONLY TO ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 7 THE AMOUNT OF THE ADDITION MADE BY THE AO. HE HAS R ELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS EXPLAINED THE REASONS FOR DECLARING LESS GP RATE FOR THE YEAR UNDER CONSIDERA TION IN COMPARISON TO THE PRECEDING YEARS AND THE FACTS EMERGING FROM THE RECORD SUPPORTS THE CASE OF THE ASSESSEE THAT FOR THE YEAR UNDER CO NSIDERATION 98.77% OF THE TURNOVER OF THE ASSESSEE IS FROM EXPORT OF B ULLION. THEREFORE, WITHOUT GOING INTO THE ISSUE OF REJECTION OF BOOKS OF ACCOUNT U/S 145(3) OF THE ACT WE FIRST EXAMINE THE ISSUE OF ADDITION M ADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) DUE TO DECLINE IN THE G P DECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION IN COMPAR ISON TO THE GP DECLARED IN THE PRECEDING YEARS. AT THE OUTSET WE N OTE THAT THE LD. CIT(A) HAS CONSIDERED THIS ISSUE IN PARA 3.1.2 (VII ) & (VIII) AS UNDER:- (VII) THUS, IN VIEW OF THE ABOVE JUDICIAL PRONOUNC EMENTS, AFTER REJECTION OF BOOKS OF ACCOUNTS, THE PAST HIST ORY OF THE APPELLANT HAS TO BE SEEN, FOR ESTIMATING THE PR OFIT OF THE APPELLANT. DURING THE APPELLATE PROCEECINGS, TH E APPELLANT SUBMITTED ITS TRADING RESULTS FOR ASST. YEAR TURNOVER GROOS PROFIT GP RATE 2010-11 2,72,59,880 40,78,06.76 14.96% 2011-12 4,17,59,028.17 47,83,412.14 11.45% ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 8 2012-13 53,56,71,843.00 74,59,648.13 1.39% (VIII) IT MAY BE MENTIONED THAT IN THE CASE OF CIT VS. VAIBHAV GEMS LTD. [2014] 112 DTR 84 (RAJ), IT HAS BEEN HELD BY THE HO NBLE HIGH COURT COURT OF RAJASTHAN THAT WHILE THE PAST HISTORY BECO MES THE RELEVANT BASIS BUT IF THE AO WISHES TO TINKER WITH THE BASIS OF PAST RECORDS, THEN SOME FLAW HAS TO BE FOUND BY THE AO IN MAKING SOME ADDITION AND, IN THE INSTANT CASE UNDER CONSIDERATION, THE PURCHASES TO THE TUNE OF RS. 94, 23,653/- WAS FOUND TO BE BOGUS/UNVERIFIABLE. AS PURCHASES TO THE EXTENT OF RS. 94,23,653/- WERE NOT VERIFIABLE DURING THE ASSE SSMENT PROCEEDINGS AND BILLS WERE OBTAINED THROUGH ACCOMMO DATION ENTRY PROVIDERS WHICH DEFINITELY RESULTS IN HIGHER GP RATE. THE HIGHER GROSS PROFIT WILL ALSO TAKE INTO ACCOUNT OF THE IRREGULARITIES COMMITTED BY THE APPELLANT IN OBTAIN ING ACCOMMODATION ENTRIES. THE GROSS PROFIT DURING THE YEAR IS 1.39% ONLYHAS FALLEN FROM 11.45% AND 14.96% IN PREC EDING YEARS. FOR SUCH A STEEP FALL IN GROSS PROFIT, IT WA S SUBMITTED BY THE APPELLANT BEFORE THE AO THAT THE APPELLANT STAR TED DEALING IN GOLD JEWELLERY IN COMPARISON TO EARLIER YEARS, WHER E SALE WAS MAINLY GEMS AND STONE JEWELLERY. IT WAS ALSO SUBMIT TED THAT THE APPELLANT MAINLY PURCHASED GOLD FROM CORPORATION BA NK AND EXPORTED 98.77% OF GOODS OUT OF TOTAL TURNOVER. IT IS SEEN THAT THE TURNOVER OF THE APPELLANT HAS SUBSTANTIALLY INC REASED IN COMPARISON TO EARLIER YEARS AND THEREFORE, THE GROS S PROFIT RATIO IS BOUND TO BE MODERATE. HOWEVER, THE LINE OF BUSIN ESS OF THE APPELLANT REMAINED THE SAME, THEREFORE, IT INDICATE S THAT THE ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 9 BOGUS PURCHASES / ACCOMMODATION ENTRIES HAVE ADVERS ELY AFFECTED THE BOOK RESULTS OF THE APPELLANT. THE FAC T THAT THERE WAS DEFECT IN REPORTING PURCHASE FROM PARTIES WHO A RE IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES, NEEDS TO BE FACTORIZE IN ESTIMATING THE BOOK RESULTS. THE AO HA S MADE AN ADDITION OF RS. 23,55,913/- ON ACCOUNT OF BOGUS PUR CHASE (25% OF RS. 94,23,653/-). AFTER CONSIDERING THE ABOVE TR ADING ADDITION, THE GROSS PROFIT OF THE APPELLANT FOR THE YEAR UNDE R CONSIDERATION BECOMES RS. 98,15,561/-WHICH IN TERMS OF PERCENTAGE IS 1.83% ONLY. THUS, EVEN AFTER CONSIDERING THE ADDITION MAD E BY THE AO, THE GROSS PROFIT RATIO FOR THE YEAR REMAINS FAR BEL OW THE GROSS PROFIT RATE OF EARLIER YEARS. CONSIDERING THE A DOVE FACTS , NO INTERFERENCE IS CALLED FOR AND THE ADDITION MADE BY THE AO IS HE REBY SUSTAINED. UNDISPUTEDLY THERE IS MANIFOLD INCREASE IN THE TURN OVER OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION IN COMPARISON TO T HE PRECEDING TWO YEARS AS CONSIDERED BY THE LD. CIT(A). FOR THE ASSE SSMENT YEAR 2010-11 THE TURNOVER OF THE ASSESSEE WAS ONLY RS. 2.72 CROR E AND FOR THE ASSESSMENT YEAR 2011-12 IT WAS RS. 4.17 CORES WHERE AS FOR THE YEAR UNDER CONSIDERATION THE TURNOVER HAS INCREASED TO R S. 53.56 CORE. FURTHER, THE LD. CIT(A) HAS DULY NOTED THE FACT THA T FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE STARTED DEALING IN GOLD JEWELLERY IN COMPARISON TO THE STONE JEWELLERY FOR THE PRECEDING YEARS. APPARENT ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 10 FROM THE SALE OF GOLD JEWELLERY THE ASSESSEE ALSO T RADED IN BULLION BY PURCHASING GOLD FROM CORPORATION BANK AND EXPORTED THE SAME. THE REVENUE HAS NOT DISPUTED THAT 98.77% OF THE TOTAL T URNOVER OF THE ASSESSEE IS COMPRISING EXPORT OF BULLION. ONCE 98.7 7% OF THE TOTAL TURNOVER REPRESENTS EXPORT OF BULLION THEN THE GP D ECLARED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION CANNOT BE COMPARED WITH THE GP FOR THE PRECEDING YEARS WHEN THERE IS VERY LESS TURNOVER OF THE ASSESSEE IN THE TRADING OF STONE JEWELLERY. IT IS U NDISPUTED THAT THE MARGIN IN TRADING OF BULLION IS VERY LESS AND 1% GP IS CONSIDERED AS A REASONABLE PREVAILING MARGIN. THUS, 99% OF THE EXPO RT TURNOVER CAN FETCH ONLY 1% MARGIN BEING TRADING IN BULLION THEN IN REMAINING 1.23% TURNOVER OF THE ASSESSEE IS REPRESENTING THE SALE O F JEWELLERY. AS PER DIRECTIONS OF THE BENCH THE ASSESSEE HAS FILED THE DETAILS OF EXPORTS FROM WHICH IT IS CLEAR THAT OUT OF TOTAL TURNOVER R S. 53.56 CRORE THE TURNOVER OF TRADING IN BULLION IS RS. 52.96 CORE A ND THE TURNOVER FROM SALE OF JEWLLERY IS RS. 6,00,000/-. THEREFORE, IN V IEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN AROUND 99% OF THE TU RNOVER OF THE ASSESSEE IS FROM TRADING OF BULLION AND PURCHASES O F BULLION MADE FROM THE CORPORATION BANK THEN THE GP DECLARED BY THE AS SESSEE AT 1.39% IS REASONABLE. THE REJECTION OF BOOKS OF ACCOUNT WOULD NOT BE IFSO FACTO ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 11 RESULT AN ADDITION IF THE ASSESSEE HAS DECLALRED TH E PROFIT IN LINE WITH THE PREVAILING PROFIT IN THE TRADE /INDUSTRY OR IN LINE WITH THE PAST HISTORY OF THE ASSESSEE. IN THE CASE IN HAND WHEN THE ASSESSEE HAS DECLARED GP AT 1.39% OF TOTAL TURNOVER OF RS. 53.56 CORES OUT O F WHICH ABOUT 53 CORE TURNOVER IS CONSISTING OF EXPORT OF BULLION. T HUS WHEN ALMOST ALL THE TURNOVER OF THE ASSESSEE IS AN EXPORT OF BULLIO N THEN THE MARGIN/GP DECLARED BY THE ASSESSEE AT 1.39% IS IN THE LINE WI TH THE PROFITS PREVAILING IN THIS TRADE. NEITHER THE AO NOR THE LD . CIT(A) HAS APPRECIATED THIS FACT THAT ABOUT 99% OF THE TURNOVE R OF THE ASSESSEE IS FROM TRADING IN BULLION, THEREFORE, THE ADDITION MA DE BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS NOT JUSTIFIED AND TH E SAME IS DELETED. SINCE WE HAVE DELETED THE ADDITION MADE BY THE AO A ND SUSTAINED BY THE LD. CIT(A), THEREFORE, WE DO NOT PROPOSE TO GO INTO THE ISSUE OF REJECTING OF BOOKS OF ACCOUNT BEING ACADEMIC IN NAT URE. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/01/2020 . SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/01/2019. * SANTOSH. ITA NO. 442/JP/2019 SHRI NAVRATAN JOHARI VS. ACIT 12 VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE M/S SHRI NAVRATAN JOHARI, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- ACIT, CIRCLE-1, 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. 442/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR