DCIT, Jaipur V. AMRAPALI JEWELS PVT. LTD., Jaipur

ITA 670/JPR/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9685 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 26-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREM PRAKASH MEENAJCIT
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Bogus purchase; Rejection of books of accounts
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPUN] YS[KK LNL; ,OA JH DQY HKKJR] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM AND SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 670/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09. DY. COMMISSIONER OF INCOME - TAX, CIRCLE-2, JAIPUR. CUKE VS. M/S AMRAPALI JEWEL S PVT. LTD; PANCH BATTI, M.I. ROAD, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABCA3277F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT C.O. NO. 53/JP/2013 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 670/JP/2013 ) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09. M/S AMRAPALI JEWEL S PVT. LTD; PANCH BATTI, M.I. ROAD, JAIPUR. CUKE VS. DY. COMMISSIONER OF INCOME - TAX, CIRCLE - 2, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABCA3277F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI PREM PRAKASH MEENA(JCIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL(CA) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10.03.2017. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 23/03/2017. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THE APPEAL BY THE REVENUE AND CROSS OBJECTION BY T HE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT (A), BIKANER, DATED 14 .05.2013 PERTAINING TO ASSESSMENT YEAR 2008-09. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 2 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD.CIT(A) WAS NOT JUSTIFIED IN RESTRICTING THE TRAD ING ADDITION OF RS. 17,25,190/- TO RS. 50,000/- DESPITE UPHOLDING THE R EJECTION OF BOOKS OF A/C. 2. ON THE FACTS IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS PASSED A PERVERSE ORDER IN NOT CONSIDERI NG THE UNDISCLOSED INVESTMENT MADE IN THE STATED PURCHASES FROM THE SPECIFIC PARTIES. 2. BRIEFLY STATED THE FACTS ARE THAT THE CASE OF THE ASSESSEE WAS RE-OPENED AND THE ASSESSMENT U/S 143(3) OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) VIDE ORDER DATED 22/12/2010, WHILE FRAMING THE ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT THE CLOSING STOCK OF THE ASSE SSEE IS NOT UNVERIFIABLE FOR WANT OF ITEM WISE, DAY TO DAY QUALITATIVE CUM QUANTITATIVE INVENTORY OF STOCK. THEREFORE, HE PROCEEDED TO ESTIMATE THE PROFIT BY REJECTING BOOKS OF ACCOUNTS. THE ASSESSING OFFICER APPLIED 25% FOR DISALLOWANCE OF UNVERIFIABL E PURCHASE, THEREBY; HE MADE TRADING ADDITION OF RS. 17,25,190/- APART FROM THIS , THE ASSESSING OFFICER ALSO MADE DISALLOWANCE OF GENERAL EXPENSES OF RS. 58,925/-. AGAINST THIS THE ASSESSEE PREFERRED AN APPEAL BEFORE LD. CIT(A), WHO REDUCED THE TRADING ADDITION THEREBY HE MADE A LUMP-SUM ADDITION OF RS. 50,000/- AND ALSO R EDUCED THE DISALLOWANCE MADE ON ACCOUNT OF GENERAL EXPENSES TO THE EXTENT OF RS. 20,000/- HOWEVER, THE LD. CIT(A) CONFIRMED THE REJECTION OF BOOKS OF ACCOUNTS . AGGRIEVED BY THIS, BOTH REVENUE AND ASSESSE HAVE ASSAILED THE ORDER OF LD. CIT(A) BY FILING APPEAL AND CROSS OBJECTION 3. FIRST WE TAKE UP THE REVENUES APPEAL IN ITA NO. 670/JP/2013 . THE ONLY EFFECTIVE GROUND IS AGAINST RESTRICTING THE TR ADING ADDITION TO RS. 50,000/-. LD. DEPARTMENTAL REPRESENTATIVES SUBMITTED THAT THE LD. CIT (A) WAS NOT JUSTIFIED IN RESTRICTING THE ADDITION, HE SUBMITTED THAT THE ASS ESSING OFFICER HAS GIVEN SPECIFIC 3 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. FINDING WITH REGARD TO UNVERIFIABLE PURCHASES. HE SUBMITTED THAT UPON ENQUIRY IT WAS FOUND THAT THE PARTIES FROM WHOM THE ASSESSEE H AS CLAIMED PURCHASE WERE NOT EXISTING. HE DREW OUR ATTENTION TO ASSESSMENT ORDE R PAGE NO. 5 IN SUPPORT OF THIS CONTENTION. HE SUBMITTED THAT UNDER THESE FACTS TH E LD. CIT (A) WAS NOT JUSTIFIED IN DELETING THE ADDITION. PER CONTRA LD. COUNSEL FOR T HE ASSESSEE SUBMITTED THAT FIRSTLY, REJECTION OF BOOKS OF ACCOUNT WAS NOT JUSTIFIED. TH E INVESTIGATION WING HAD CARRIED OUT SURVEY AT THE THIRD PARTY, PREMISES ON THAT BAS IS THE AO HAS MADE ADDITION, HE SUBMITTED THAT BOOKS OF ACCOUNTS WHICH IS SUBJECT T O AUDIT. THESE BOOKS ARE DULY SUPPORTED WITH BILLS & VOUCHERS. THERE IS COMPLETE LINKAGE OF GOODS PURCHASED WITH ITEMS MANUFACTURED AND SOLD. ALL THE PURCHASES AND SALES ARE DULY RECORDED IN THE STOCK REGISTER. THE ASSESSING OFFICER HAS ACCEPTED THE SALES DECLARED BY THE ASSESSEE. THE AO HAS ALSO VERIFIED THE BOOKS OF AC COUNTS ON TEST CHECK BASIS. IT IS CONTENDED THAT IN THE ASSESSMENT YEAR 2005-06, ALSO THE ASSESSING OFFICER HAD DOUBTED THE PURCHASE MADE FROM 7 PARTIES AND ACCORD INGLY MADE TRADING ADDITION BY APPLYING GP RATE OF 17.27% ON DECLARED TURN-OVER IN STEAD OF 16.06% DECLARED BY THE ASSESSEE. HOWEVER, THE LD. CIT(A) AFTER CONSIDE RING THE REASONS FOR ALL GP RATE AND THE FACTS ARE THAT THE ALLEGED BOGUS PURCHASES WERE LESS THAN 2% OF THE TOTAL TURN-OVER DIRECTED TO AO APPLY GP RATE OF 17.27% O NLY ON SALES CORRESPONDING TO BOGUS PURCHASE AS RATE APPLY ON ENTIRE DECLARED TUR N-OVER. THIS RESULTED INTO THE ADDITION OF RS. 31,460/- AS AGAINST RS. 15,87,450/- HAS MADE BY THE ASSESSING OFFICER. AGAINST THIS THE DEPARTMENT HAS FILED AN APPEAL BEFORE HONBLE ITAT WHICH WAS DISMISSED VIDE ORDER DATED 25/02/2009 IN ITA NO . 1469/JP/2008 IN SUPPORT OF THIS CONTENTION, HE DREW OUR ATTENTION TO PAPER BOO K PAGE NO. 69 TO 75. 4 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUS ED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDER OF THE AUTHORITIES BELOW . THE ASSESSING OFFICER MADE ADDITION BY OBSERVING AS UNDER:- 3.2.1 THE ASSESSEE HAS SHOWN PURCHASE OF RS. /- DURING THE YEAR UNDER CONSIDERATION. ON EXAMINATION OF THE DETAILS OF PURCHASE, IT IS FOUND THAT THE ASSESSEE HAS MADE PURCHASE FROM THE FOLLOWING PARTY:- S. NO . NAME OF PARTIES FROM WHOM PURCHASE MADE AMOUNT 1. BALAJI CREATION 672726/- 2. ANUPAM EXPORT & IMPORTS 744156/- 3. PUJA JEWELLERS 2323696/- 4. S.P. JEWELLERS 713605/- 5. STONE IMPEX 1282955/- 6. ADITYA GEMS 424613/- 7. EMERALDS INTERNATIONAL 405506/- 8. SANT SHREE EXPORTS 71000/- 9. SURBHI EXPORTS 262500/- TOTAL 6900757/ - 3.2.2 IN ORDER TO VERIFY THE GENUINENESS OF THE AB OVE PURCHASES CLAIMED BY THE ASSESSEE, VARIOUS INVESTIGATIONS WERE CONDUCTED BY THIS OFFICE AND TH E RESULTS OF SUCH INVESTIGATION IN RESPECT OF THESE PARTIES ARE DISCUSSED BELOW;- (A) INFORMATION WAS RECEIVED FROM THE DIRECTOR OF I NCOME-TAX (INV.) JAIPUR VIDE LETTER NO. 4224 DATED 26/07/2007 STATING THAT A SEARCH AND SEI ZURE ACTION WAS CARRIED OUT AT RESIDENTIAL AND BUSINESS PREMISES OF M/S HALDIA GR OUP ON 20/04/2007 ENGAGED IN THE BUSINESS OF TRADING OF PRECIOUS AN SEMI PRECIOUS ST ONES. DURING THE COURSE OF SEARCH, CERTAIN INCRIMINATING DOCUMENTS RELATED TO PURCHASE OF GOOD S WERE FOUND. ON CONFRONTING WITH THE ASSESSEE SHRI RAVI HALDIA, IT WAS ADMITTED BY HIM T HAT TO REGULARIZE THE PURCHASES MADE IN CASH, HE HAS OBTAINED BOGUS BILLS FROM DIFFERENT PA RTIES. HE MENTIONED THAT PAYMENTS MADE TO ALL THESE PARTIES WERE SHOWN THOUGH CHEQUES BUT IMMEDIATELY WHOLE AMOUNT WAS RECEIVED 5 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. BACK IN CASH. THE LIST OF PARTIES DETECTED DURING THE COURSE OF SEARCH WHO ARE ENGAGED IN SUPPLYING BOGUS BILLS WITHOUT ACTUAL DELIVERY OF GO ODS IS ENCLOSED WITH THIS LETTER. YOU ARE REQUESTED TO KINDLY INFORM THE ASSESSING OFFICER TO UTILIZE THIS INFORMATION IN CASE OF JEWELERS, SELECTED FOR SCRUTINY. THIS INFORMATION MAY HELD T O DETECT THE BOGUS PURCHASES INTRODUCED IN BOOKS OF ACCOUNTS TO REDUCE THE PROFIT. (B) THE FACTS RELATING TO THESE PARTIES ARE THAT TH E BCIT WING OF THE INCOME-TAX DEPARTMENT CONDUCTED SURVEYS IN VARIOUS CASES IN THE YEAR 2007 -08 AND IT WAS FOUND THAT THE VARIOUS PERSONS WERE INDULGED IN THE PRACTICE OF ISSUING BO GUS BILLS IN THE TRADE OF GEMS AND JEWELLERY. THEY CATEGORICALLY ADMITTED IN THEIR RE SPECTIVE STATEMENTS RECORDED ON OATH THAT THEY WERE ISSUING BILLS ONLY AND NO REAL TRADE WAS EVER CONDUCTED BY THEM. IT WAS FOUND THAT ACTUALLY NO PHYSICAL DELIVERY OF GOODS WAS BEING GI VEN AGAINST THESE BILLS AND AFTER RECEIVING THE CHEQUES OF EQUAL AMOUNT FROM THE INTERESTED PAR TIES, CASH WAS BEING REMITTED TO THEM AFTER MAKING CASH WITHDRAWALS FROM THE BANK ACCOUNT S WHERE THESE CHEQUES WERE DEPOSITED. THESE PERSON WERE CHAGRINING COMMISSION @ 0.20% TO 0.25% OF THE QUANTUM, FOR ISSUING THESE BOGUS SALE BILLS. IN SOME CASES THE COMMISSI ON WAS HIGHER AS MUCH AS 0.50% TO 0.60% OF THE BILL AMOUNT. 3.2.3. THE ASSESSEE WAS ASKED TO PRODUCE ALL THESE PARTIES FOR VERIFICATION. SHOW CAUSE LETTERS DATED 02-11-2010 WERE ALSO ISSUED TO ALL THESE PARTIES TO PRODUCED DETAILS. THE NOTICES SEND TO THESE PARTIES WERE RETURNED BACK AS NOT DELIVERED WITH TH E REMARK NO SUCH PARTY IS AVAILABLE ON THE ADDRESS AND / OR THE ADDRESS IS NOT CORRECT. THE ASSESSEE ALSO FAILED TO PRODUCE THE ABOVE MENTIONED PARTIES FOR THE VERIFICATION OF PURCHASE MADE BY HIM DURING THE YEAR. HOWEVER, THE LD. CIT(A) REDUCED THE TRADING ADDITIO N HAS READ AS UNDER:- AS REGARDS THE ADDITION OF RS. 17,25,190/- IS CONC ERNED, IT IS SEEN THAT THE TRADING ADDITION WAS MADE RELYING UPON THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF M/S SANJAY OIL CAKE 6 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. INDUSTRIES AND THE DECISION OF HONBLE ITAT, AHMEDA BAD IN THE CASE OF VIJAY PROTEINS LTD. THE FACTS OF BOTH THE CASES ARE CLEARLY DISTINGUISHABLE . THE ITAT, JAIPUR IN A RECENT DECISION IN THE CASE OF DCIT, CIRCLE-2, JAIPUR V/S M/S GEMS PARADIS E IN ITA NO. 700/JP/2009 FOR A.Y. 2006- 2007 DATED 18.12.2009 HAD HELD THAT IN THE CASE OF SANJAY OIL CAKE A SPECIFIC FINDING WAS GIVEN BY THE AO THAT PURCHASES WERE MADE FROM THE A LLEGED BOGUS SUPPLIERS AT A HIGHER RATE AS COMPARED TO OTHER PARTIES. FURTHER IN THE CASE OF M/S VIJAY PROTEINS LTD. AFTER EXAMINING THE BANK ACCOUNT IT WAS ESTABLISHED THAT THE CHEQUE S ISSUED TO VARIOUS PARTIES WERE DEPOSITED IN ONE OF THE ACCOUNTS WHICH WAS FOUND TO BE OWNED BY THE ASSESSEE HIMSELF. BOTH THE SITUATIONS I.E. PURCHASES AT A HIGHER RATE AND PAYMENT OF CHEQUES HAVING BEING DEPOSITED IN ACCOUNT OF THE ASSESSEE ARE NOT EXISTENT IN THE INSTANT CASE. THUS, THE ADDITION MADE ON THE BASIS OF RELIANCE ON THE TWO ABOVE SAID CASES C ANNOT BE HELD TO BE JUSTIFIED. IT IS ALSO NOTEWORTHY THAT FOR APPLYING GP RATE PAST HISTORY O F THE CASE IS THE BEST GUIDE AS HELD IN SEVERAL CASE LAWS. IN THE APPELLANTS CASE THE DECL ARED SALES AND GP RATE FOR LAST TWO YEARS ARE AS UNDER:- A.Y. SALES (AMT. IN LACS) GROSS PROFIT (AMT. IN LACS) G.P. RATE(%) 2008 - 09 2711.33 510.80 18.83 2007 - 08 2464.14 384.30 15.59 THUS THERE IS AN INCREASE IN GP RATE. IN THE PRECED ING YEARS, I.E. IN AY 2005-06 TRADING ADDITION OF RS. 31460/- AND IN AY 2006-07 TRADING A DDITION OF RS. 1 LAC ONLY WAS CONFIRMED BY THE LD. ITAT, JAIPUR BENCH, JAIPUR EVEN THERE WAS A SLIGHTLY FALL IN GP IN AY 2006-07. CONSIDERING THESE FACTS INCLUDING CONSIDERABLE INCR EASE IN SALES AS WELL AS INCREASE IN GP RATE THE UNVERIFIABLE PURCHASES STANDS EXPLAINED BECAUSE THE GP RATE HAS INCREASED FROM 15.59 TO 18.83 AND IT CANT BE TREATED THAT THAT UNVERIFIABL E PURCHASES HAS BEEN USED BY THE ASSESSEE TO REDUCE THE PROFITS. HOWEVER, AS THE APPELLANT H AS BEEN FOUND INVOLVED IN UNVERIFIABLE 7 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. PURCHASES, A LUMP SUM ADDITION OF RS. 50,000/- IS H EREBY CONFIRMED. THE APPELLANT PARTY SUCCEEDS ON THIS GROUND. THE ABOVE FINDING ON FACT IS NOT CONTROVERTED BY TH E REVENUE. FURTHER, IN ASSESSEES OWN CASE, THE CO-ORDINATE BENCH UNDER THE IDENTICA L FACTS IN ITA NO. 1469/JP/2008 HAS DECIDED THE ISSUE BY OBSERVING AS UNDER:- 9. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND SUBS TANCE IN THE CONTENTION OF THE LD. D/R THAT THE DEFECTS POINTED OUT IN THE BOOKS OF ACCOUNT BY THE AO THAT THERE WAS NO BASIS FOR VALUATION OF STOCK AT THE END O THE YEAR AND CLOSING STOCK WAS VALUED ON ESTIMATED BASIS HEN CE STOCK WAS NOT SUBJECT TO VERIFICATION REMAINED UNEXPLAINED BY THE ASSESSE E EVEN BEFORE THE TRIBUNAL. THUS ON THE BASIS OF UNEXPLAINED DEFECTS IN THE BOOKS OF ACCOUNT, THE AO WAS ALSO JUSTIFIED IN REJECTING THE BOOK OF ACCOUNT. WE THUS UPHELD THE APPLICATION OF THE PROVISION OF SECTION 145(3) OF THE ACT IN THE PRESENT CASE. SO FAR AS RESTRICTION OF THE APPLICATION OF REDUCED GP RATE ON RS. 26 LACS (I.E. ROUND FIGURE OF ALLEGED BOGUS PURCHASED WORTH RS. 25,00,556/-) IS CONCERNED, WE DO NOT FIND SUBSTANCE IN THE ARGUMENT OF THE LD. D/R ESPECIALLY WHEN SALES DECLARED BY THE ASSESSEE HAVE NOT BEEN D OUBTED AND INTERFERED. FOR READY REFERENCE THE RELEVANT FINDING OF THE LD. CIT(A) AT PAGE 5 IN THIS REGARD IS BEING REPRODUCED HEREUNDER:- SO FAR AS GP ADDITION IS CONCERNED THE GO RATE OF 16.06% DECLARED IN THE YEAR UNDER CONSIDERATION IS CERTAINLY LESS THAN GP RATE OF 21% IN THE IMMEDIATE PRECEDING YEAR AS WELL AS LESS THAN 17.45% AND 17.22% IN AY 2003-04 AND AY 20 02-03. ONCE BOOKS OF ACCOUNTS ARE REJECTED THE ONLY OPTION LEFT WITH THE AO IS TO EST IMATE GP RATE. THE AO HAS TAKEN WEIGHTED AVERAGE OF 5 YEARS. HOWEVER, THE CONTENTION OF THE A/R IS CONSIDERED THAT FALL IN GP RATE WAS UNEXPLAINED TO THE AO VIDE THEIR LETTER DT. 18.12.2 007 WHICH IS AT PAGE NO. 64 OF THE PAPER BOOK. IT WAS EXPLAINED THAT SALES; HAVE INCREASED SUBSTANTIALLY FROM RS. 7.79 CRORE TO RS.13.07 CRORE AND THUS THERE IS A GROWTH OF 68% IN SALES. THIS INCREASE IN SALE WAS ATTRIBUTED TO THE OPENING OF NEW OUTLET AT NEW DELHI. TO BOOS T SALE IN DELHI SPECIAL DISCOUNT WAS GIVEN WHICH RESULTED IN DEDUCTION IN GP RATIO. ALSO THAT THERE WA STEEP COMPETITION IN THE JEWELLERY TRADE AND THERE WAS HEAVY FLUCTUATION IN GOLD BULLI ON RATES IN THE YEAR UNDER CONSIDERATION. ALSO THAT THE ALLEGED BOGUS PURCHASES OF RS. 25,00, 556/- OUT O TOTAL PURCHASES OF RS. 1326 16 LACS COMES TO ONLY 1.89%. THUS THE ALLEGED BOGUS P URCHASES HAS NOT POINTED OUT ANY SPECIFIC DEFECT IN MAINTENANCE OF BOOKS OF ACCOUNTS AND THER EFORE WHATEVER ADDITION IS TO MADE IT SHOULD BE WITH REFERENCE OF THE ALLEGED BOGUS PURCH ASES ONLY. THE FACT THAT THERE IS A QUANTUM JUMP IN TURNOVER AND IN THE YEARS EXCEPT IM MEDIATE PRECEDING YEAR THE GP RATES WERE 13.70% , 17.22% AND 17.455 AND ONLY BECAUSE TH E GP; RATE OF THE IMMEDIATE PRECEDING YEAR IS ALSO TAKEN INTO ACCOUNT THEN THE WEIGHTED A VERAGE COMES TO 17.27%. AFTER CONSIDERING THE REASONS FOR FALL IN GP RATE AND THE FACTS THAT THE ALLEGED BOGUS PURCHASES IS LESS THAN 2% OF THE TOTAL TURNOVER THE AO IS DIRECT ED TO APPLY THE GP RATE OF 17.27% ONLY ON 8 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. THE SALES CORRESPONDING TO THE BOGUS PURCHASES. AS THE BOGUS PURCHASES IS 1.89% OF THE TOTAL PURCHASES CONSIDERING THE CORRESPONDING SALES AT 2% OF THE TURNOVER WHICH COMES AROUND RS. 26 LACS AND THEREFORE AO IS DIRECTED TO APPLY HIGHE R GP RATE OF 17.27% ON SALES OF RS. 26 LACS CORRESPONDING PURCHASES. AS A RESULT, TRADING ADDI TION IS MADE BY APPLYING THE DIFFERENCE OF GP RATES WHICH COMES 1.21 ON SALES OF RS. 26 LACS. THE TRADING ADDITIONAL IS THUS REDUCED TO RS. 31,460/- AS AGAINST RS. 15,87,450/-. AS A RESU LT, THE APPELLANT GETS RELIEF OF RS. 15,55,990/-. THE GROUND OF APPEAL ARE PARTLY DECIDE D IN FAVOUR OF THE APPELLANT. THE FIRST APPELLANT ORDER ON THE ISSUE AS DISCUSSED ABOVE IS COMPREHENSIVE AND REASONED ONE HENCE WE ARE NOT INCLINED TO INTERFERE THEREWITH. THE SAME IS UPHELD. THE GROUND AND OBJECTION ARE REJECTED. IN THE PRESENT CASE ALSO THE ASSESSING OFFICER HAS NOT DOUBTED THE SALES. THEREFORE, TAKING A CONSISTENT VIEW, WE DO NOT SEE ANY REASON TO INTERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRM. 5. NOW, COMING TO THE CROSS OBJECTION 53/JP/2013 OF THE ASSESSEE . THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF CROSS OBJE CTION. 1. THE LD. COMMISSIONER OF INCOME- TAX(A) HAS ERRED O N FACTS AND IN LAW IN CONFIRMING THE ACTION OF AO IN REJECTING BOOKS OF A CCOUNTS U/S 145(3). 1.1 THE LD. CIT (A) HAS FURTHER ERRED ON FACTS AND IN L AW IN CONFIRMING AD HOC TRADING ADDITION OF RS. 50,000/- 2. THE ASSESSEE CARVES RIGHT TO ADD, ALTER, AMEND, AN D MODIFY ANY OF THE GROUND OF APPEAL 3. NECESSARY COST BE ALLOWED TO THE ASSESSEE. 6. APROPOS TO GROUND NO. 1, THE LD. COUNSEL FOR TH E ASSESSEE SUBMITTED THAT THE CIT (A) WAS NOT JUSTIFIED IN CONFIRMING THE REJECTI ON OF BOOKS OF ACCOUNTS. HE SUBMITTED THAT THE BOOKS OF ACCOUNTS ARE DULY AUDIT ED THE ASSESSING OFFICER HAS NOT GIVEN ANY SPECIFIC INSTANCES WITH REGARD TO THE DEF ECTS INTO THE BOOKS OF ACCOUNTS. 9 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. HE SUBMITTED THAT UNDER THESE FACTS, THE BOOKS OF A CCOUNTS OUGHT NOT TO HAVE BEEN REJECTED. 6.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENT ATIVES SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASS ESSING OFFICER HAS GIVEN SPECIFIC INSTANCES. 6.2 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED TH E MATERIAL AVAILABLE ON RECORD AND GONE THOUGH THE ORDER OF THE AUTHORITIES BELOW. WE FIND THAT THE ASSESSING OFFICER HAS STATED IN THE ASSESSMENT ORDER THAT NOT ICES TO THE SELLER OF THE GOOD WERE ISSUED TO FURNISH THE DETAILS. HOWEVER, SUCH NOTIC ES WERE RETURN BACK WITH REMARK NO PARTY IS AVAILABLE ON THE ADDRESS OR THE ADDRESS IS NOT CORRECT. UNDER THESE FACTS, THE AO WAS JUSTIFIED IN REJECTING THE BOOKS OF ACCO UNT, AS PURCHASE COULD NOT BE VERIFIED. THEREFORE, WE DO NOT SEE ANY REASON TO IN TERFERE INTO THE ORDER OF THE LD. CIT(A), SAME IS HEREBY AFFIRMED. THE GROUND RAISED IN THIS APPEAL IS DISMISSED. 7. APROPOS TO GROUND NO. 1.1, THE LD. COUNSEL OR TH E ASSESSEE SUBMITTED THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING AD HOC T RADING ADDITION. 7.1 ON THE CONTRARY, THE LD. DEPARTMENTAL REPRESENT ATIVES SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 7.2 WE HAVE HEARD THE RIVAL CONTENTIONS, AND WE HAV E CONFIRMED THE FINDING OF LD. CIT(A) IN ITA NO. 670/JP/2013 QUA THE ISSUE OF TRAD ING ADDITION THEREFORE, FOR THE SAME REASONING, THIS GROUND OF THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. 8. IN THE RESULT BOTH THE APPEAL OF REVENUE I.E. ITA NO 670/JP/2013 AND CROSS OBJECTION OF THE ASSESSEE IN NO. 53/JP/2013 ARE DISMISSED. 10 ITA NO. 670/JP/2013 & C.O. 53/JP/2013 M/S AMRAPALI JEWELS PVT. LTD., JAIPUR. ORDER PRONOUNCED IN THE OPEN COURT ON THURSDAY , THE 23RD DAY OF MARCH 2017. SD/- SD/- HKKXPUN] ( DQY HKKJR ) ( BHAGCHAND) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 23 /03/2017. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- DY. COMMISSIONER OF INCOME-TAX, C IRCLE-2, JAIPUR. 2. THE RESPONDENT- M/S AMRAPALI JEWELS PVT. LTD. PA NCH BATTI, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 670/JP/2013 & C.O. 53/JP/201 3) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR