ITO, Jaipur V. GEMS WORTH, Jaipur

ITA 845/JPR/2013

• Counselvise Citation: 84523114 RSA 2013
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 12-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJ MEHRA JCIT LD
• Assessee Lawyers: P C PARWAL CA DHK
• Keywords: Business income
• Section: 5(2); 10AA

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 JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 845/JP/2013 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 THE ITO WARD- 5(2) JAIPUR CUKE VS. M/S. GEMS WORTH B-96, SETHI COLONY JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAHFG 1973 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY :SHRI RAJ MEHRA, JCIT LD. DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA LQUOKBZ DH RKJH[K@ DATE OF HEARING : 30/11/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30 /11/2015 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS REVENUE APPEAL ARISING OUT OF THE ORDER OF LD. CIT(A) II; JAIPUR DATED 28-08-13 RAISING SOLE GROUND AS UNDER: - LD. CIT(A) ERRED IN DELETING ADDITION OF RS. 12,62,530/- BEING 25% OF UNVERIFIABLE PURCHASES. 2.1 LD. DR RELIED ON THE ORDER OF AO. 2.2 LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT LD. CIT(A) DELETED THE IMPUGNED ADDITION BY FOLLOWING OBSERVATIONS:- ITA NO. 845/JP/2013 ITO , WARD- 5(2), JAIPUR VS. M/S. GEMS WORTH, JAIPU R . 2 I HAVE CONSIDERED THE FACTS OF THE CASE AND GONE THROUGH THE ASSESSMENT ORDER, ARGUMENT OF THE LD. A R AND THE VARIOUS CASES REFERRED BY THE AO. IT IS SEEN THAT T HE ASSESSEE HAS FILED THE CONFIRMATIONS OF THESE PARTIES WHEREI N THEY HAVE ACCEPTED THE SALE MADE TO THE ASSESSEE. PAYMEN T OF THE PURCHASES IS MADE BY ACCOUNT PAYEE CHEQUE. THE AO H AS NOT BROUGHT ANY INSTANCE WHICH INDICATES THAT THE PAYME NT MADE BY CHEQUE HAS BEEN RECEIVED BACK. THE HON'BLE ITAT JAIPUR BENCH HAS ALSO IN THE VARIOUS CASES HELD THAT 25% O F THE PURCHASES FROM ALLEGED BOGUS PARTIES IS UNCALLED FO R. RECENTLY I HAVE THE SIMILAR ADDITION IN CASE OF SHR I SHIV BIHARI SHARMA APPEAL NO. 617/CIT(A(/BIKANER/2010-11 WHEREIN BY RELYING ON THE DECISION OF ITAT JAIPUR B ENCH IN THE CASE OF GEMS PARADISE, IT WAS HELD THAT ADDITIO N OF 25% ON THE BASIS OF THE DECISION OF SANJAY OIL CAKE AND VIJAY PROTEINS LTD. IS UNCALLED FOR. THE FACTS OF THIS CA SE IS THE SAME. THEREFORE, ADDITION MADE BY DISALLOWING 25% O F THE PURCHASES IS DELETED. IT IS FURTHER SEEN THAT THIS IS THE FIRST YEAR OF T HE BUSINESS OF THE ASSESSEE AND THE AO HAS NOT GIVEN A NY COMPARABLE CASE WHERE THE GROSS PROFIT RATE DECLARE D BY THE ASSESSEE AT 25.18% IS LESS THAN THE OTHERS. THE ENT IRE INCOME OF THE BUSINESS OF THE ASSESSEE IS EXEMPT U/S 10AA. THEREFORE, THERE CANNT BE ANY MOTO TO INFLATE THE PURCHASE. IN ANY CASE IF ANY PROFIT IS ESTIMATE OVER AND ABOV E THE DECLARED PROFIT, THE SAME IS EXEMPT U/S 10AA IN VIE W OF THE DECISION OF ITAT DELHI AND KOLKATTA BENCH RELIED BY THE ASSESSEE SUPRA CONSIDERING ALL THESE FACTS, THE ADD ITION MADE BY THE AO IS DELETED. 2.3 LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDE R OF LD. CIT(A) AND FURTHER CONTENDS THAT IN ANY CASE THE ASSESSEE IS E LIGIBLE FOR EXEMPTION OF ITA NO. 845/JP/2013 ITO , WARD- 5(2), JAIPUR VS. M/S. GEMS WORTH, JAIPU R . 3 INCOME U/S 10AA OF THE IT ACT ON ITS BUSINESS INCOM E. EVEN IF FOR THE SACK OF ARGUMENTS IT IS HELD THAT LD. AOS ORDER IS CORRECT, DISALLOWANCE OF PURCHASES WILL INCREASE ASSESSEES BUSINESS INCOME WHICH IS EXEMPT U/S 10AA. THUS THERE WILL BE REVENUE EFFECT. 2.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. LD. COUNSEL CONTENTIONS CARRY DESERVING MERIT AND THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A) WH ICH IS UPHELD. 3.0 IN THE RESULT REVENUE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 /11/ 2015 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 30 /11/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, WARD- 5(2), JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- M/S. GEMS WORTH, 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. 845/JP/2013) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR