KANDOI METAL POWDERS MANUFACTRUING COMPANY, JAIPUR V. DCIT, CC-3, JAIPUR

MA 16/JPR/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7316 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 08-05-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-02-2024
• Assessment Year: 2012-2013
• Appeal Filed On: 10-10-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ABHINAV SHARMA
• Keywords: Bogus purchase
• Section: 254(2)

Judgement Text

vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM Misc. Application No. 16 & 17/JP/2022 (Arising out of vk;djvihy la-@ITA No.122/JP/2022 - Assessee & 244/JP2022 - Revenue) fu/kZkj.ko"kZ@AssessmentYear : 2012-13 M/s.Kandoi Metal Powders Manufacturing Company F-381 & 382, Road No. 9, VKI Area, Jaipur cuke Vs. The DCIT Central Circle-3 Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABCK 0316 R vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Shri Abhinav Sharma, CA Shri Mukesh Kumar Sharma jktLo dh vksjls@Revenue by: Shri Anoop Singh, Addl. CIT - DR lquokbZ dh rkjh[k@Date of Hearing : 16/02/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 09/05/2024 vkns'k@ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This is a Miscellaneous Application filed by the assessee u/s 254(2) of the Act against the order of the ITAT Jaipur Bench dated 15-09-2022 praying therein to rectify/ recall its order as there is apparent mistake apparent on record . To this effect, the ld. AR of the assessee also filed a brief submissions mentioning therein reason to make rectification in the order as under:- 2 M.A. NO. 16/JP/2022 KANDOI METAL POWDERS MANUFACTURING COMPANY VS DCIT,CENTRAL CIRCLE-3, JAIPUR ‘The above-mentioned appeal has been decided by the Hon'ble Bench Jaipur vide their order dated 15.09.2022. The following mistake is apparent from the record: - (i) While deciding the case of the assessee company the Hon'ble ITAT has mentioned in para no. 21 as under: - ‘’21. As we have the guidance available of the honourable Jurisdictional High Court directly on the issue which has been relied upon by the revenue as well as ld. AR of the assessee so as to know how much profit should be imputed to bogus purchases transactions, we deem it fit and proper that profit is required to be estimated only on the amount of bogus purchases. The quantum of the profit as generally estimated in the cases of bogus purchases should be at the rate of 12% of such purchases held by the Honourable Jurisdictional High Court and we have not been quided by both the party as to why and how the said view of the Honourable Jurisdictional High Court is not acceptable in the present case. Accordingly, we reverse the order of the learned CIT- A and direct the learned assessing officer to compute the unaccounted profit earned by the assessee at the rate of 12% on bogus purchases. As we have followed the jurisdictional high court decision where in the court has not guided as to make separate addition on the commission on the bogus purchases and therefore, respectfully following that judgement we do not find any merits in the appeal of the revenue to confirm the addition of commission and thus this ground of the revenue is dismissed and that of the assessee is allowed. (ii) The Hon'ble ITAT has referred the case of Jurisdictional High Court of Rajasthan in the case of Clarity Gold Pvt Ltd in DB ITA No. 125 to 128 of 2014 dated 19/09/2017. In this decision the Jurisdictional High Court of Rajasthan has specifically given the direction to apply the GP rate on the basis of average GP rate declared by the assessee in the earlier years. 3 M.A. NO. 16/JP/2022 KANDOI METAL POWDERS MANUFACTURING COMPANY VS DCIT,CENTRAL CIRCLE-3, JAIPUR (iii) In para no. 6 Jurisdictional High Court of Rajasthan in the case of Clarity Gold Pvt Ltd has mentioned as under: - 6. "Taking into consideration the evidence on record, the Tribunal while considering the matter has totally deleted the amount of addition. In our considered opinion, taking into account the industry which is running the business, the addition which has been made on the bases of GP which has been shown of the identical industry whose case is also heard together. (iv) In para no. 7 Jurisdictional High Court of Rajasthan in the case of Clarity Gold Pvt Ltd has mentioned as under: - 7. "Taking into account the average GP rate which will be applied in the present case will be 12 per cent. It is made clear that where ever the profit is more than 12 per cent, the same will not be refunded to the assessee but where it is less than 12 per cent, the income will be assessed on the basis of 12 per cent GP." From the above paras it has been established that the Jurisdictional High Court of Rajasthan in the case of Clarity Gold Pvt Ltd has given the direction for applying 12% GP rate on the basis of GP rate of the assessee itself and for the particular industry which is running the business. In the case of M/s Clarity Gold Pvt Ltd the company itself has declared GP rate more than 12% in various years i.e. 16.08% in AY 2004- 05, 12.72% in AY 2005-06, 13.59% in AY 2008-09, 14.36% in AY 2009-10. Hence looking to these circumstances the Hon'ble High Court has given the direction for applying the 12% GP rate. (v) Where in the assessee's case the assessee company is declaring GP rate which is ranging to 2.51% to 6.84%. Hence the application of GP rate @ 12% on the basis of decision of Clarity Gold Pvt Ltd in DB 4 M.A. NO. 16/JP/2022 KANDOI METAL POWDERS MANUFACTURING COMPANY VS DCIT,CENTRAL CIRCLE-3, JAIPUR ITA No. 125 to 128 of 2014 dated 19/09/2017 in unjustified and not as per the law pronounced by the Rajasthan High Court. Therefore, the above mistake which is apparent from the record in application of Jurisdictional High Court verdict in right perspective deserves to be rectified. So humble pray is made to the Hon'ble Bench for rectifying the above mistake.’’ The Bench also noted that the Assessee has filed MA No.17/JP/2022 which does not pertain to its Income Tax Appeal and thus the same is infructuous. 2.1 On the other hand, the ld. DR supported the order of ITAT Jaipur Bench (supra) praying that the ld. AR of the assessee wants the get the ITAT order reviewed in the garb of Misc. Application. 2.2 We have heard both the parties and perused the materials available on record. The Bench noted that there is some apparent mistake in the order of ITAT (supra) in which it is inadvertently mentioned at para 21 ..... ‘’The quantum of the profit as generally estimated in the case of bogus purchases should be at the rate of 12% of such purchases as held by the Honourable Jursidictional High Court. The Bench feels that the point raised by the assessee in its misc. application has merit which requires afresh hearing of the case as the assessee argued that the Jurisdictional High Court has also noted that the profit of the same industry has to be considered and in the case of the assessee the rate of gold industry is applied inadvertently by the Bench. Thus the order passed by the Bench dated 15-09-2022 5 M.A. NO. 16/JP/2022 KANDOI METAL POWDERS MANUFACTURING COMPANY VS DCIT,CENTRAL CIRCLE-3, JAIPUR is recalled for afresh hearing and the Registry is directed to fix the case for afresh hearing in the matter as raised by the ld. Counsel of the assessee in the above mentioned Misc. Application in regular course. Thus the M.A. of the assessee is allowed. 3.0 In the result, the Misc. Application of the assessee is allowed Pronounced in the Open Court on 09/05/2024. Sd/- Sd/- ¼Mk0 ,l- lhrky{eh ½ ¼jkBksMdeys'kt;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;dlnL;@Judicial Member ys[kklnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 09 /05/2024 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- M/s.Kandoi Metal Powders Manufacturing Company 2. izR;FkhZ@ The Respondent- The DCIT, Central Circle-3, Jaipur 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (MA No. 16/JP/2023) vkns'kkuqlkj@ By order, lgk;diathdkj@Asst. Registrar