ITO, Jaipur V. KAVIKANT BAGHRECHA, Jaipur

ITA 982/JPR/2010

• Counselvise Citation: 98223114 RSA 2010
• Duration Of Justice: 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 28-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K MEENA
• Assessee Lawyers: VIMAL CHOPRA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.982/ JP/2010 ASSESSMENT YEAR 2007-08 PAN: AFAPB 0983 L THE ITO VS. SHRI KAVIKANT BAGRECHA WARD 2(3) C-78, JAGDAMBA NAGAR JAIPUR AJMER ROAD, JAIPUR (APPELLANT ) (RESPONDENT) C.O. NO. 89/JP/2010 (ARISING OUT OF ITA NO.982/ JP/2010) ASSESSMENT YEAR 2007-08 PAN: AFAPB 0983 L SHRI KAVIKANT BAGRECHA VS. THE ITO C-78, JAGDAMBA NAGAR WARD 2 (3) AJMER ROAD, JAIPUR JAIPUR (APPELLANT ) (RESPONDENT) DEPARTMENT BY : SHRI D.K. MEENA ASSESSEE BY : SHRI VIMAL CHOPRA ORDER PER N.L. KALRA, AM:- THE REVENUE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A)- 1, JAIPUR DATED 12-05-2010 FOR THE ASSESSMENT YEAR 2007-08. THE ASSESSEE HAS FILED THE CROSS OBJECTION. 2.1 THE REVENUE IS AGGRIEVED THAT THE LD. CIT(A) HA S ERRED IN REDUCING THE TRADING ADDITION TO RS. 50,000/- AS AGAINST ADD ITION OF RS. 8,09,932/- 2 MADE BY THE AO WITHOUT CONSIDERING THE DECISION IN THE CASE OF M/S. NAND KISHORE MEGHRAJ AND THE DECISION OF THE LD. CIT(A) IN THE CASE OF WAS CONFIRMED BY ITAT JAIPUR BENCH. 2.2 THE C.O. NO. OF THE ASSESSEE IS AGAINST CONFIRM ATION OF TRADING ADDITION OF RS. 50,000/-. 2.3 THE ASSESSEE IS TRADING IN PRECIOUS AND SEMI PR ECIOUS STONE AND JEWELLERY. THE AO NOTICED THAT THE ASSESSEE HAS SHO WN THE PURCHASES TO THE EXTENT OF RS. 34,39,730/- FROM FOUR PARTIES. THE DE TAILS OF PURCHASES FROM EACH PARTY AND NAME OF THE PARTIES ARE AVAILABLE AT PAGE 2 OF THE ASSESSMENT ORDER. THE ABOVE REFERRED FOUR PARTIES HAVE BEEN FO UND TO BE INDULGING IN ISSUING BOGUS BILLS. SUCH INFORMATION IS AVAILABLE WITH THE AO ON THE BASIS OF THE STATEMENT RECORDED DURING THE COURSE OF M/S . MOTISONS , SHRI RAVI HALDIYA AND M/S. SANJEEV PRAKASHAN GROUP. THE BCTT WING ALSO CONDUCTED SURVEY AND THE NAMES OF THE PARTIES WERE CIRCULATED TO THE AO. THE AO THEREFORE, ASKED THE ASSESSEE TO GET THE PUR CHASES VERIFIED FROM FOUR PARTIES. SUMMONS ISSUED TO THESE FOUR PARTIES WERE RETURNED BACK BY THE POSTAL AUTHORITIES WITH THE REMARKS NO SUCH CONCE RN EXISTS IN THE ADDRESS GIVEN. THE ASSESSEE WAS CONFRONTED WITH THE FACTS THAT THE PARTIES WERE INDULGING IN ISSUING BILLS AND SUCH PARTIES WERE NO T AVAILABLE AT THE GIVEN ADDRESS PROVIDED BY THE ASSESSEE. THE ASSESSEE STAT ED THAT HE HAS EFFECTED 3 PURCHASES AN THE PAYMENTS HAVE BEEN MADE THROUGH CH EQUES. SUCH PARTIES ARE HAVING SALES TAX REGISTRATION NO. AND PAN. THE AO REJECTED THE BOOKS OF ACCOUNT AND MADE THE TRADING ADDITION WHICH WAS 25% OF THE UNVERIFIABLE PURCHASES. 2.4 THE LD. CIT(A) HAS UPHELD THE REJECTION OF BOOK S OF ACCOUNT. THE LD. CIT(A) NOTICED THAT THE ASSESSEE HAS SHOWN THE G.P. RATE OF 5.88% AS AGAINST 4.82% IN THE IMMEDIATELY PRECEDING YEAR. ON ACCOUNT OF UNVERIFIABLE PURCHASES, THE LD. CIT(A) UPHELD THE LUMPSUM ADDITI ON OF RS. 50,000/-. 2.5 WE HAVE HEARD BOTH THE PARTIES. ALONGWITH WRITT EN SUBMISSIONS, THE LD. AR HAS FILED THE COPY OF THE ORDER OF THE TRIBU NAL IN THE CASE OF ITO VS. MILLENNIUM DESIGNS (ITA NO. 993/JP/2010 DATED 21-04 -2011) IN WHICH THE TRIBUNAL HAS UPHELD THE REJECTION OF BOOKS OF ACCOU NT. IN THAT CASE, THE G.P.RATE WAS BETTER AS COMPARED TO LAST YEAR. THERE FORE, THE ADDITION OF RS. 50,000/- CONFIRMED BY THE LD. CIT(A) WAS UPHELD. IT IS NOTICED THAT SALES DURING THE YEAR ARE LESS AS COMPARED TO THE SALES O F THE IMMEDIATELY PRECEDING YEAR. THE SALES HAVE BEEN REDUCED BY AROU ND 50%. IF THE TURNOVER DECREASES THEN THE G.P.RATE STANDS INCREASED. IT I S ALSO A FACT THAT THE PARTIES WHICH WERE ISSUING BOGUS BILLS WERE CHARGING COMMIS SION RANGING FROM 0.3% TO 0.6%. LOOKING TO THESE FACTS, WE FEEL THAT THE LD. CIT(A) WAS JUSTIFIED IN REDUCING THE TRADING ADDITION TO RS. 5 0,000/-. HENCE, WE FIND NO 4 INFIRMITY IN THE ORDER OF THE LD. CIT(A). THUS THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. 3. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 08-07 -2011 SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 08 /07/2011 *MISHRA COPY FORWARDED TO :- 1. THE ITO, WARD 2(3), JAIPUR 2. SHRI KAVIKANT BAGHRECHA,, JAIPUR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.982/JP /10) A.R, ITAT, JAIPUR 5 6