ITO, Jaipur V. M/S GEMS STAR, Jaipur

ITA 728/JPR/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99350 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 14-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA-@ ITA NO. 728/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 THE ITO WARD- 2 (1) JAIPUR CUKE VS. M/S. GEMS STAR, 412, RATNA SAGAR, JOHRI BAZAR, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAFFG 1173 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT C.O. NO.63/JP/2012 (ARISING OUT OF VK;DJ VIHY LA-@ ITA NO. 728/JP/2012) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 M/S. GEMS STAR, 412, RATNA SAGAR, JOHRI BAZAR, JAIPUR CUKE VS. THE ITO WARD- 2 (1) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAFFG 1173 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJ MEHRA, JCIT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/10/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 09/10/2015 VKNS'K@ ORDER PER VIKRAM SINGH YADAV, AM:- THIS IS AN APPEAL FILED BY THE REVENUE AND THE CR OSS OBJECTION BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A)-1, JAIPUR DATED 04-06- 2012 FOR THE ASSESSMENT YEAR 2006-07. ITA NO. 728/JP/2012 ITO, WARD- 2 (1), JAIPUR VS. M/S. GEMS STAR, JAIPUR 2 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE ON THE DATE OF HEARING. THE MATTER HAS BEEN FIXED FOR HEARING ON NUMBER OF OCCASIONS IN THE PAST. THE LD. AR AGAIN MOVED AN ADJOURNMENT APPLICATION TODAY. IN VIEW OF THE PAST CONDUCT OF THE LD. AR , THE ADJOURNMENT AP PLICATION FILED BY THE LD. AR OF THE ASSESSEE ON 01-10-2015 SEEKING ADJOUR NMENT WAS REJECTED BY THE BENCH ON THE DATE OF HEARING. THUS THE BENCH DECIDED TO PROCEED IN THIS MATTER EX-PARTE BASED ON THE MATERIAL AVAI LABLE ON RECORD. 3.1 THE REVENUE HAS RAISED FOLLOWING GROUND IN ITS APPEAL. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) IS JUSTIFIED IN REST RICTING THE TRADING ADDITION TO RS. 2,09,529/- AS AGAINST TRADI NG ADDITION MADE OF RS. 22,42,334/- ON ACCOUNT OF DISALLOWANCE @ 25% OF UNVERIFIABLE PURCHASES AMOUNTING TO RS. 89,69,33 7/- WITHOUT CONSIDERING THE FACT THAT TRADING ADDITION WERE MADE AFTER PROPER INVESTIGATION AND WAS SUPPORTED BY THE JUDICIAL PRONOUNCEMENT IN THE CASE OF M/S. SANJAY OILCAKE IN DUSTRIES VS. CIT REPORTED IN (2008) 10 DTR (GUJARAT) 153 WHI CH IS SQUARELY APPLICABLE IN THE CASE OF THE ASSESSEE. 3.2 THE ASSESSEE HAS RAISED FOLLOWING GROUND IN ITS C.O. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) ERRED IN UPHOLDING T HE INVOCATION OF THE PROVISIONS OF SECTION 145(3) OF T HE I.T. ACT , 1961, THEREBY SUSTAINING TRADING ADDITION TO THE EXTENT OF RS. 2,09,529/- BY APPLYING GROSS PROFIT RATE OF 7%. ITA NO. 728/JP/2012 ITO, WARD- 2 (1), JAIPUR VS. M/S. GEMS STAR, JAIPUR 3 4.1 AS REGARDS THE ISSUE OF INVOCATION OF SECTION 1 45(3) RAISED BY THE ASSESSEE IN ITS C.O., IT IS FOUND THAT THE AO HAS E XAMINED THE BOOKS OF ACCOUNT AND CONCERNING DOCUMENTS OF THE PURCHASES M ADE BY THE ASSESSEE BUT FOR WANT OF NON-MAINTENANCE OF PROPER BOOKS OF ACCOUNT AND RELATED DOCUMENTS OF THE PURCHASES, THE AO HAS RIGHTLY INVO KED THE PROVISIONS OF SECTION 145(3) OF THE ACT WHICH HAS BEEN SUBSEQUENT LY SUSTAINED BY THE LD. CIT(A) IN THE CASE OF ASSESSEE. WE HAVE GONE THROUGH THE RECORDS AND RELEVANT DOCUMENTS TO THIS EFFECT WHEREIN WE FI ND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) AS TO IN VOCATION OF SECTION 145(3) OF THE ACT. THUS THE GROUND OF THE ASSESSEE RAISED IN ITS C.O. FOR INVOCATION OF SECTION 145(3) BY THE LOWER AUTHORITI ES IS REJECTED. 4.2 THE LD. DR RELIED ON THE ORDER OF THE AO AND FU RTHER CONTENDS THAT THE COORDINATE BENCH OF ITAT VIDE ITS CONSOLIDATED ORDER DATED 22-10- 2014 IN THE CASE OF ANUJ KUMAR VARSHNEY AND OTHERS VS. ITO HAD HELD THAT 15% OF THE UNVERIFIABLE PURCHASES SHALL BE THE INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES IN THE RELEVANT YEAR. THE APPEAL MAY ACCORDINGLY BE DECIDED BY THE ITAT. AT THE SAME TI ME, IT IS PLEADED THAT REVENUE AND ASSESSEE HAVE GONE IN APPEAL BEFORE HON 'BLE RAJASTHAN HIGH COURT AGAINST THIS BUNCH OF ORDERS AND IT IS CURREN TLY PENDING ADJUDICATION ITA NO. 728/JP/2012 ITO, WARD- 2 (1), JAIPUR VS. M/S. GEMS STAR, JAIPUR 4 4.3 WE HAVE HEARD THE LD. DR AND PERUSED THE MATERI AL AVAILABLE ON RECORD. THE ISSUE UNDER CONSIDERATION RELATES TO UN VERIFIABLE PURCHASES AND ESTIMATION OF APPROPRIATE GROSS PROFIT RATE THE REON. THE AO HAS APPLIED 25% GROSS PROFIT RATE WHICH HAS BEEN REDUCE D TO 7% BY THE LD. CIT(A). IN THE PAST, THE COORDINATE BENCH IN CASE O F ANUJ KUMAR VARSHNEY AND OTHERS VS. ITO (SUPRA) HAVE TAKEN A VI EW THAT 15% OF UNVERIFIABLE PURCHASES SHALL BE THE INCOME OF THE A SSESSEE. THE SAID MATTER HAS SINCE REACHED HON'BLE RAJASTHAN H IGH COURT AND CURRENTLY PENDING ADJUDICATION. IN OUR CONSIDERED V IEW, GIVEN THE SIMILARITY OF ISSUE INVOLVED IN THE SUBJECT MATTER AND THE MATTER PENDING ADJUDICATION BEFORE THE HON'BLE RAJASTHAN HIGH COU RT, IT WOULD BE APPROPRIATE TO AWAIT THE DECISION OF HON'BLE RAJAS THAN HIGH COURT AND FOLLOW THE SAME IN THE INSTANT MATTER. WE ACCORDING LY SET ASIDE THE ISSUE RAISED IN REVENUES APPEAL AS WELL AS IN ASSESSEE'S CROSS OBJECTION SO FAR IT RELATES TO DELETION OF ADDITION ON UNVERIFIABLE PUR CHASES AS WELL AS DETERMINATION OF GROSS PROFIT RATE AND RESTORE THE MATTER BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AFTER THE JUDGEMEN T OF HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF ANUJ KUMAR VARS HNEY & OTHERS VS. ITO (SUPRA) IS DELIVERED, AFTER GIVING ADEQUATE OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO. 728/JP/2012 ITO, WARD- 2 (1), JAIPUR VS. M/S. GEMS STAR, JAIPUR 5 5.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS ALL OWED AND C.O. OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE S. ORDER PRONOUNCED IN THE OPEN COURT ON 09 /10/2015 . SD/- SD/- VKJ-IH-RKSYKUH FOE FLAG ;KNO (R.P.TOLANI) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09 /10/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 2 (1), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. GEMS STAR, JAIPUR 3. VK;DJ VK;QDRVIHY ) @ CIT(A) 4. VK;DJ VK;QDR@ CIT 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.728/JP/2012) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR