DCIT, Jaipur V. SHRI DINESH HALDIA, Jaipur

ITA 721/JPR/2011

• Counselvise Citation: 72123114 RSA 2011
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M L BORAD
• Keywords: Depreciation

Judgement Text

1 ITA 721-11 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR. ( BEFORE SHRI R.K. GUPTA AND SHRI N.L. KALRA ) ITA NO. 721/JP/2011 ASSTT. YEAR : 2007-08. THE DCIT, CENTRAL CIRCLE-3, VS. SHRI DINESH HALDI A, JAIPUR. PROP. M/S. D.H. EXPORTS, C-18, JYOTI MARG, BAPU NAGAR, JAIPUR. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUNIL MATHUR RESPONDENT BY : SHRI M.L. BORAD DATE OF HEARING : `10.01.2012. DATE OF PRONOUNCEMENT : 30.01.2012. ORDER DATED : 30/01/2012. PER R.K. GUPTA, J.M. THIS IS AN APPEAL BY DEPARTMENT AGAINST THE ORDER OF LD. CIT (A) RELATING TO ASSESSMENT YEAR 2007-08. 2. GROUND NO. 1(I) TO 1(IV) RELATES TO DELETING THE ADDITION OF RS. 9,75,000/- OUT OF TOTAL ADDITION OF RS. 13,00,000/- WHICH WAS MADE BY AO ON ACCOUNT OF CASH PURCHASES BY RELYING UPON THE DECISIONS OF HONBLE GUJARAT HIGH COURT IN CASE OF SANJAY OIL CAKE INDUSTRIES, 316 ITR 274 AND IN CASE OF VIJAY PROTEI NS LTD., 58 ITD 428. WHILE MAKING ADDITION, PROVISIONS OF SECTION 145(3) WAS ALSO APP LIED. 3. THE LD. D/R HAS STATED DURING THE APPELLATE PROC EEDINGS THAT PURCHASES WERE NOT GENUINE AS NEITHER THE PARTIES WERE PRODUCED NOR TH EY WERE FOUND AT THE ADDRESSES GIVEN NEITHER ANY QUANTITATIVE DETAILS WERE GIVEN. ALL TH E PURCHASES WERE SHOWN HAVING 2 PURCHASED IN CASH. THEREFORE, THE LD. CIT (A) WAS NOT JUSTIFIED IN REDUCING THE ADDITION MADE BY AO AT RS. 13,00,000/- TO RS. 9,75,000/-. 4. ON THE OTHER HAND, THE LD. COUNSEL OF THE ASSESS EE HAS STATED THAT THIS ISSUE HAS ALREADY BEEN DECIDED BY THE TRIBUNAL WHILE DECIDING THE APPEAL OF THE ASSESSEE FOR SAME YEAR. ATTENTION OF THE BENCH WAS DRAWN ON COPY OF TRIBUNALS ORDER DECIDED IN ITA NO. 30, 711,723 AND 719/JP/2011 RELATING TO ASSESSMENT YEAR 2004-05, 05-06, 07-08 AND 08- 09 VIDE ORDER DATED 19.12.2011. ON A QUERY FROM T HE BENCH THAT WHY THE APPEAL OF THE DEPARTMENT WAS NOT BROUGHT TO THE KNOWLEDGE OF THE BENCH WHILE DECIDING THE APPEAL OF THE ASSESSEE, IT WAS STATED THAT AT THAT POINT OF T IME IT WAS NOT IN THE KNOWLEDGE OF THE ASSESSEE THAT DEPARTMENT HAS ALSO FILED ANY APPEAL, THEREFORE, THE SAME COULD NOT BE BROUGHT TO THE KNOWLEDGE OF THE TRIBUNAL. THE LD. CIT D/R ALSO RAISED NO OBJECTION TO DECIDE THIS APPEAL INDEPENDENTLY. HOWEVER, HE HAS S TATED THAT HIS ARGUMENTS ADVANCED SHOULD BE TAKEN INTO CONSIDERATION. 5. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DECIDE THE APPEAL OF THE DEPARTMENT INDEPENDENT AS THE INFORMATION ABOUT THE PENDING APPEAL OF THE DEPARTMENT WAS NOT BROUGHT TO THE KNOWLEDGE OF THE TRIBUNAL BY EITHER PARTY, AND THEREFORE, THE APPEAL OF THE ASSESSEE WAS DISPOSED OFF SEPARATELY OTHERWISE BOTH THE APPEALS SHOULD HAVE BEEN DISPOSED OFF TOGETHER. 6. AFTER GOING THROUGH THE ORDERS OF THE AO, LD. CI T (A) AND THE SUBMISSIONS OF THE PARTIES MENTIONED ABOVE, WE FIND THAT THIS ISSUE HA S ALREADY BEEN DECIDED BY THE TRIBUNAL WHILE DECIDING THE APPEAL OF THE ASSESSEE IN ITA NO . 711/JP/2011. THROUGH GROUND NOS. 3 & 4, THE ASSESSEE HAS OBJECTED CONFIRMING DISALLO WANCE OF RS. 3,25,000/- OUT OF TOTAL ADDITION MADE BY AO ON ACCOUNT OF UNVERIFIABLE PURC HASES. THE GROUNDS OF THE ASSESSEE WERE ALLOWED BY OBSERVING THAT A SEPARATE TRADING A DDITION WAS SUSTAINED BY THE TRIBUNAL 3 WHILE DECIDING THE GROUND IN RESPECT TO TRADING ADD ITION MADE SEPARATELY BY APPLYING GP RATE OF 30% AGAINST GP RATE OF 11% SHOWN BY ASSESSE E. TRIBUNAL HAS DIRECTED TO APPLY 20% GP RATE AGAINST 11.88% SHOWN BY ASSESSEE. EVEN AND OTHERWISE, THE JAIPUR BENCHES OF THE TRIBUNAL ARE TAKING A CONSISTENT VIEW THAT W HERE CERTAIN PURCHASES REMAINED UNVERIFIABLE THEN INVOKING OF PROVISIONS OF SECTION 145(3) ARE ATTRACTED. THEREFORE, TRIBUNAL HAS CONFIRMED THE INVOCATION OF PROVISIONS OF SECTION 145(3) WHILE DISPOSING THE GROUND OF THE ASSESSEE. THE BENCHES OF THE TRIBUNA L ARE ALSO TAKING A CONSISTENT VIEW THAT WHERE CERTAIN PURCHASES REMAINED UNVERIFIABLE THEN THE ADDITION SHOULD BE MADE ON THE BASIS OF PAST HISTORY AND TAKING INTO CONSIDERA TION THE CURRENT EVENTS OF THE CASE. TAKING INTO CONSIDERATION THE APPLICATION OF GP RAT E, THE TRIBUNAL HAS ALREADY DIRECTED TO APPLY GP RATE OF 20% AGAINST 11.88% SHOWN BY ASSESS EE. THEREFORE, NO SEPARATE ADDITION IS WARRANTED ON ACCOUNT OF UNVERIFIABLE PU RCHASES AS THE TRADING ADDITION MADE WILL TAKE CARE OF LEAKAGE OF REVENUE, IF ANY. SINC E WE HAVE ALREADY DELETED PART ADDITION SUSTAINED BY LD. CIT (A) I.E. ADDITION OF RS. 3,25, 000/- OUT OF TOTAL ADDITION OF RS. 13,00,000/-, THEREFORE, THE GROUND OF THE DEPARTMEN T IS REJECTED. 7. GROUND NO. 2 IS AGAINST DELETING ADDITION OF RS. 82,200/- MADE BY AO ON ACCOUNT OF EXPENSES. 8. THE LD. D/R HAS PLACED RELIANCE ON THE ORDER OF AO. 9. ON THE OTHER HAND, LD. COUNSEL OF THE ASSESSEE P LACED RELIANCE ON THE ORDER OF LD. CIT (A). 10. AFTER CONSIDERING THE ORDERS OF THE AO AND LD. CIT (A), WE FIND NO INFIRMITY IN THE FINDINGS OF LD. CIT (A). THE AO DISALLOWED 20% OF EXPENSES WHICH WORKS OUT TO RS. 1,64,400/- AND OTHER EXPENSES LIKE NCDEX MEMBERSHIP FEES, NCDEX PENALTY AND MCX PENALTY AMOUNTING TO RS. 1,28,811/-. IN THIS WAY T OTAL DISALLOWANCE MADE BY AO AT 4 RS.2,94,711/-. THE LD. CIT (A) ALLOWED THE APPEAL OF THE ASSESSEE AS HE UPHOLD THE DISALLOWANCE OF TELEPHONE EXPENSES, OFFICE EXPENSES , MOTOR CAR EXPENSES, VEHICLE INSURANCE/SALARY TO DRIVER AND DEPRECIATION ON CAR TO THE EXTENT OF 10% ON THE BASIS OF DISALLOWANCE CONFIRMED FOR ASSESSMENT YEAR 2006-07. IN THIS WAY, THE LD. CIT (A) DELETED ADDITION OF RS. 82,200/- OUT OF TOTAL ADDIT ION. ASSESSEE ALSO RAISED THIS ISSUE IN ITS APPEAL. HOWEVER, TRIBUNAL HAS REJECTED THE GROUND O F THE ASSESSEE AND HAS CONFIRMED THE ORDER OF LD. CIT (A) FOLLOWING ITS ORDER FOR ASSESS MENT YEAR 2008-09 WHERE ON SIMILAR ISSUE THE ORDER OF LD. CIT (A) WAS CONFIRMED. THER EFORE, THE ORDER OF LD. CIT (A) HAS ALREADY BEEN CONFIRMED WHILE DECIDING THE APPEAL OF THE ASSESSEE. ACCORDINGLY, WE REJECT THIS GROUND OF THE DEPARTMENT ALSO. 11. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. 12. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 .01.2012. SD/- SD/- ( N.L. KALRA ) ( R.K. GUPTA ) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR, D/ COPY FORWARDED TO :- THE DCIT CENTRAL CIRCLE-3, JAIPUR. SHRI DINESH HALDIA, JAIPUR. THE CIT (A) THE CIT THE D/R GUARD FILE (ITA NO. 721/JP/2011) BY ORDER, AR ITAT JAIPUR.