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

MA 23/JPR/2016

• Counselvise Citation: [2016] 123 COUNSELVISE.COM (IT) 5438 (ITAT-JAIPUR)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-09-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 16-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VARMA ADD CIT DHK
• Assessee Lawyers: TANUJ AGARWAL
• Keywords: Opportunity of being heard
• Section: 263

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ MA NO. 23/JP/16 (ARISING OUT OF ITA NO. 728/J P/12 & C.O.NO.63/JP/12) FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 THE INCOME TAX OFFICER, WARD 2(1), JAIPUR CUKE VS. M/S GEM STAR, 412 RATNA SAGAR, JOHARI BAZAR, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAFFG 1173 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI TANUJ AGARWAL (ADV.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VARMA (ADD. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22.07.2016 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 22/09/2016. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS MISCELLANEOUS APPLICATION HAS BEEN FILED BY TH E REVENUE AGAINST THE ORDER PASSED BY THE CO-ORDINATE BENCH IN ITA NO . 128/JP/12 AND CO NO. 63/JP/12 DATED 09.10.2015. IN ITS APPLICATION, THE REVENUE HAS SUBMITTED THAT THE TRIBUNAL HAS SET ASIDE THE ASSESSMENT TO DECID E THE ISSUE OF ESTIMATION OF INCOME ON ACCOUNT OF BOGUS/UNVERIFIABLE PURCHASES T O THE FILE OF THE AO FOR FRESH ASSESSMENT AFTER THE JUDGEMENT OF HONBLE HIG H COURT IS DELIVERED IN THE CASE OF ANUJ KUMAR VARSHNEY AND OTHERS. MA NO. 23/JP/16 ITO, WARD 2(1), JAIPUR VS. M/S GEMS S TAR, JAIPUR 2 2. IT WAS SUBMITTED BY THE REVENUE THAT THE DECISIO N OF THE TRIBUNAL IN SETTING ASIDE THE ASSESSMENT IS NOT JUSTIFIABLE AS ANY MATTER CANNOT BE SET ASIDE FOR AFRESH ASSESSMENT SUBJECT TO AN UNCERTAIN FUTUR E EVENT AND ALSO FOR INDEFINITE PERIOD. THE SET- ASIDE ASSESSMENTS ARE R EQUIRED TO BE COMPLETED BY THE AO WITHIN THE TIME PRESCRIBED IN SECTION 153(2 A) OF THE IT ACT, 1961 WHICH IS ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN W HICH THE ORDER OF THE ITAT IS RECEIVED BY THE CONCERNED COMMISSIONER. THIS LIMI TATION CANNOT BE EXTENDED BY THE HONBLE ITAT ITSELF FOR INDEFINITE AND UNCER TAIN PERIOD. AS NO LIMITATION HAS BEEN PRESCRIBED FOR THE DECISION OF THE HONBLE HIGH COURT, THEREFORE AN ASSESSMENT CANNOT BE KEPT IN ABEYANCE TILL SUCH ORD ER OF THE HONBLE HIGH COURT. FURTHER, IT WAS SUBMITTED THAT IT IS MENTION ED IN THE TRIBUNAL ORDER THAT DEPARTMENTAL REPRESENTATIVE HAD STATED THAT THE ISS UE IN QUESTION MAY BE DECIDED AS PER THE JUDGEMENT OF HONBLE ITAT DATED 22.10.2914 RENDERED IN THE CASE OF ANUJ KUMAR VARSHNEY & OTHERS VS. ITO. THIS OBSERVATION IS FACTUALLY NOT CORRECT BECAUSE NO SUCH ACCEPTANCE WAS GIVEN BY DEPARTMENTAL REPRESENTATIVE. SINCE THE MISTAKE IS APPARENT FROM THE ORDER OF THE HONBLE ITAT, JAIPUR BENCH, JAIPUR THE SAME MAY KINDLY BE R ECTIFIED UNDER SECTION 254(2) OF IT ACT, 1961 BY RECALLING THE APPEAL ORDE R AND DECIDING THE SAME ON MERITS. 3. HERE IT WOULD BE RELEVANT TO REFER TO THE FINDIN GS OF THE CO-ORDINATE BENCH, WHICH IS THE SUBJECT MATTER OF PRESENT APPLI CATION, WHICH IS AS UNDER: WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ISSUE UNDER CONSIDERATION RELATES TO UNVERIFIAB LE PURCHASES AND ESTIMATION OF APPROPRIATE GROSS PROFIT RATE THEREON. THE AO HA S APPLIED 25% GROSS PROFIT RATE WHICH HAS BEEN REDUCED TO 7% BY THE LD. CIT(A) . IN THE PAST, THE CO- ORDINATE BENCH IN CASE OF ANUJ KUMAR VARSHNEY AND O THERS VS. ITO (SUPRA) HAVE TAKEN A VIEW THAT 15% OF UNVERIFIABLE PURCHASES SH ALL BE THE INCOME OF THE MA NO. 23/JP/16 ITO, WARD 2(1), JAIPUR VS. M/S GEMS S TAR, JAIPUR 3 ASSESSEE. THE SAID MATTER HAS SINCE REACHED HONB LE RAJASTHAN HIGH COURT AND CURRENTLY PENDING ADJUDICATION. IN OUR CONSID ERED VIEW, GIVEN THE SIMILARITY OF ISSUE INVOLVED IN THE SUBJECT MATTER AND THE MATTER PENDING ADJUDICATION BEFORE THE HONBLE RAJASTHAN HIGH COU RT, IT WOULD BE APPROPRIATE TO AWAIT THE DECISION OF HONBLE RAJASTHAN HIGH CO URT AND FOLLOW THE SAME IN THE INSTANT MATTER. WE ACCORDINGLY SET ASIDE THE I SSUE RAISED IN REVENUES APPEAL AS WELL AS IN ASSESSEES CROSS OBJECTION SO FAR IT RELATES TO DELETION OF ADDITION ON UNVERIFIABLE PURCHASES AS WELL AS DETER MINATION OF GROSS PROFIT RATE AND RESTORE THE MATTER BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AFTER THE JUDGEMENT OF HONBLE RAJASTHAN HIGH COUR T IN THE CASE OF ANUJ KUMAR VARSHNEY & OTHERS VS. ITO(SUPRA) IS DELI VERED, AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . 4. THE LD DR TOOK US THROUGH THE RELEVANT PROVISIONS O F SECTION 153(2A) OF THE ACT WHICH STATES AS UNDER: (2A) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-S ECTIONS(1), (1A), (1B) AND (2) IN RELATION TO THE ASSESSMENT YEAR COMMENCI NG ON THE 1 ST DAY OF APRIL, 1971 AND ANY SUBSEQUENT ASSESSMENT YEAR, AN ORDER OF FRESH ASSESSMENT IN PURSUANCE OF AN ORDER U/S 250 OR 254 OR SECTION 263 OR SECTION 264, SETTING ASIDE OR CANCELLING AN ASSESS MENT, MAY BE MADE AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER U/S 250 OR SECTION 254 IS RECEIV ED BY THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINC IPAL COMMISSIONER OR COMMISSIONER OR, AS THE CASE MAY BE, THE ORDER U/S 263 OR SECTION 264 IS PASSED BY THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER. MA NO. 23/JP/16 ITO, WARD 2(1), JAIPUR VS. M/S GEMS S TAR, JAIPUR 4 5. FROM THE PERUSAL OF MATERIAL AVAILABLE ON RECORD , IT IS NOTED THAT ONLY ISSUE INVOLVED IN THE ASSESSMENT PROCEEDINGS RELATE D TO UNVERIFIED PURCHASES AND ESTIMATION OF APPROPRIATE GROSS PROFIT RATE THE REON. THE AO HAD APPLIED 25% GROSS PROFIT RATE WHICH HAS BEEN REDUCED TO 7% BY THE LD. CIT(A) WHICH WAS THE SUBJECT MATTER OF APPEAL AND CROSS OBJECTIO N BEFORE THE COORDINATE BENCH. THE COORDINATE BENCH VIDE ITS ORDER DATED 0 9.10.2015 HAS SET ASIDE THE SAID ISSUE AND RESTORED THE MATTER BACK TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH AFTER THE JUDGEMENT OF HONBLE RAJASTH AN HIGH COURT IN THE CASE OF ANUJ KUMAR VARSHNEY & OTHERS VS. ITO(SUPRA) IS D ELIVERED. FROM THE PERUSAL OF RECORDS, IT IS ALSO NOTED THAT THE PROVISIONS OF SECTION 153(2A) OF THE ACT WERE NOT BROUGHT TO THE NOTICE OF THE COORDINATE BE NCH. WE ACCORDINGLY RECALL THE ORDER PASSED BY THIS TRIB UNAL DATED 09.10.2015 AND DIRECT THE REGISTRY TO FIX THE MATTER FOR FRESH HEA RING IN DUE COURSE. THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISPOSED OFF ACCORDINGLY. ORDER PRONOUNCED IN THE OPEN COURT ON 22/09 /2016. SD/- S D/- ( KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 22/ 09/2016 PILLAI VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: MA NO. 23/JP/16 ITO, WARD 2(1), JAIPUR VS. M/S GEMS S TAR, JAIPUR 5 1. VIHYKFKHZ@ THE APPELLANT- 2. IZR;FKHZ@ THE RESPONDENT- 3. VK;DJ VK;QDR@ CIT I, JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-I, JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. /JP/201) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR