Karni Jewellers, Hyderabad, Hyderabad V. ACIT, Circle-4(1), Hyderabad, Hyderabad

MA 39/Hyd/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8234 (ITAT-HYDERABAD)
• Duration Of Justice: 1 month(s) 22 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-08-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Next Hearing Date: 16-07-2021
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PAVITRAN KUMAR
• Assessee Lawyers: S RAMA RAO
• Keywords: Bogus purchase; Wrong claim
• Section: 133A; 254(2)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD (THROUGH VIRTUAL HEARING) BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER M.A. NO. 39/HYD/2021 (IN I.T.A. NO. 351/HYD/2017 ) ASSESSMENT YEAR: 2007 - 08 KARNI JEWELLERS, HYDERABAD . [PAN: AADFK5720G] VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 4(1), HYDERABAD (APPELLANT) (RESPONDENT) ASSESSEE BY SRI S. RAMA RAO REVENUE BY SRI PAVITRAN KUMAR DATE OF HEARING: 16/07 /2021 DATE OF PRONOUNCEMENT: 12 /0 8 /2021 ORDER PER A. MOHAN ALANKAMONY , A.M: THIS MISCELLANEOUS APPLICATION IS FILED BY THE ASSESSEE U/S. 254(2) OF THE INCOME TAX ACT, 1961 SEEKING RECTIFICATION OF THE TRIBUNAL ORDER DATED 17/12/2020 PASSED IN ITA NO.351/HYD/2017 FOR THE A.Y. 2007 - 08. 2. THE ASSESSEE IN ITS ELABORATE MISCELLANEOUS P ETITION HAS STATED THAT CERTAIN MISTAKES HAD CREPT IN TO THE ORDER OF THE TRIBUNAL DATED 17/12/2020 FOR THE AY 2007 - 08 HOWEVER, THE CRUXES OF THE ISSUES ARE AS FOLLOWS: - 2 (I) IN THE TRIBUNAL ORDER DATED 17/12/2020 AT PAGE 7, LINE NO.6, THE NET PROFIT DECLARED BY THE ASSESSEE IS ERRONEOUSLY STATED AS 0.33% WHEREA S THE RATE OF PROFIT DECLARED BY THE ASSESSEE IS MORE THAN 10% BECAUSE THE ASSESSEE HAD ALREADY ADMITTED PROFIT OF RS. 40,45, 000/ - ON ACCOUNT OF STOCK . (II) IN ALL THE EARLIER ORDERS OF THE TRIBUNAL O N SIMILAR CIRCUMSTANCES THE TRIBUNAL HAS ESTIMATED THE PROFIT AT 8 TO 10 % OF THE TURNOVER WITH RESPECT TO PURCHASE OF DIAMONDS AND IN THE CASE OF THE ASSESSEE ALSO SIMILAR VIEW WOULD BE ACCEPTABLE FOR ITS TURNOVER ON PURCHASE OF DIAMONDS OF RS. 98, 69,910/ - . 3. CITING THE ABOVE GROUNDS RAISED IN THE MA , THE LD. AR PLEADED T HAT IF TH E SE MISTAKES IN THE ORDER OF THE TRIBUNAL ARE RECTIFIED THEN THE ADDITION MADE BY THE LD. REVENUE AUTHORITIES MAY NOT BE SUSTAINABLE BECAUSE ASSESSEE HA D ALREADY DECLARED ITS PROFIT MORE THAN 10% OF ITS TURNOVER . THE LD. DR ON THE OTHER HAND SUBMITTED THAT THERE IS NO MISTAKE APPA RENT IN THE ORDER OF THE TRIBUNAL HENCE THE MA OF THE ASSESSEE MAY BE DISMISSED. 4. WE HAVE HEARD BOTH THE PARTIES AN D CAREFULLY PERUSED THE MATERIAL S ON RECORD, AND WE DO NOT FIND ANY MISTAKE APPARENT IN THE 3 ORDER OF THE TRIBUNAL. WHILE PASSING THE ORDER, THE BENCH HAS CAREFULLY REFERRED AND EXTRACTED THE PARTICULARS FURNISHE D BY THE ASSESSEE IN THE PAPER BOOK VIZ., SALE OF GOLD ORNAMENTS WITHIN THE STATE RS. 6,29 ,910 / - (PAPER BOOK - PAGE NO.18), SALE OF GOLD ORNAMENTS OUT OF STATE RS. 3,88,61,050/ - (PAPER BOOK PAGE NO.18) , SALE OF DIAMOND RS. 10,60,000/ - (PAPER BOOK PAGE NO.16) , AGGREGATE OF WHICH WORKS OUT TO RS. 4,05,50,960 / - TOWARDS WHICH ASSESSEE HAD DECLARED PROFIT OF RS. 1,33,921.20 (PAPER BOOK PAGE NO.16) . THEREFORE, THE NET PROFIT RATIO IS WORKS OUT TO 0.33% (RS. 1,33,921.90 X 100 / RS. 4,05,50,960 ). FURTHER, ASSESSEE HAD DECLARED RS. 40,45,000/ - AS EXCESS STOCK NOT DISCLOSED IN THE BOOKS OF ACCOUNT DURING THE COURSE OF SURVEY PROCEEDINGS U/S. 133A OF THE ACT WHICH HAS TO BE TREATED SEPARATELY AS UNDISCLOSED INCOME AND T HEREFORE, THIS AMOUNT CANNOT BE INCLUDED WHILE COMPUTING THE NP RATIO OF THE ASSESSEE FROM ITS REGULAR DISCLOSED TURNOVER IN THE BOOKS OF ACCOUNTS . HENCE, THE NET PROFIT ARRIVED IN THE ORDER OF THE TRIBUNAL AT 0.33% IS IN ORDER. 5. AS REGARDS THE ADDITION MADE FOR RS. 98,69,702/ - , THE FINDING S OF THE REVENUE ARE THAT THE ASSESSEE HAD OBTAINED BOGU S BILLS FOR PURCHASE OF DIAMONDS AND DEBITED IN ITS PROFIT & LOSS A/C FOR WHICH PAYMENT S WERE MADE THROUGH CHEQUES AND THE SAME WAS RECEIVED BACK BY WAY OF CASH AND THE ASSESSEE DID NOT RECEIVE THE DIAMONDS. IN SUCH SITUATION IT IS OBVIOUS THAT , IT IS NOTHING, BUT A BOGUS CLAIM OF EXPENDITURE 4 RECORDED IN THE BOOKS OF ACCOUN TS OF THE ASSESSEE AGAINST WHICH NO REVENUE TOWARDS TURNOVER COULD BE ATTRIBUTED. THEREFORE, ESTIMATION CANNOT BE MADE ON THE BOGUS PURCHASES AT 8 OR 10 % AS CLAIMED BY THE ASSESSEE AND THE ENTIRE BOGUS CLAIM OF EXPENDITURE HAS TO BE DISALLOWED WHICH THE TRIBUNAL HAD CORRECTLY DEALT WITH IN ITS ORDER. HENCE, THERE IS NO MISTAKE APPARENT ON RECORD IN THE ORDER OF THE TRIBUNAL ON THIS ISSUE ALSO. THEREFORE, TH E MA FILED BY THE ASSESSEE IS DEVOID OF MERITS ON ALL COUNT S. 6. IT IS PERTINENT TO MENTION THAT FILING OF SUCH FRIVOLOUS MISCELLANEOUS APPLICATION BEFORE THE TRIBUNAL ONLY LEADS TO WATE OF TIME AND RESOURCES TOWARDS WHICH LEVY OF COST MAY BE JUSTIFI ABLE WHICH WE REFRAIN FROM DOING SO. 7 . IN THE RESULT, MA FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THE 12 TH AUGUST , 2021. SD/ - SD/ - (P. MADHAVI DEVI) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 12 TH AUGUST , 2021. OKK COPY TO: - 5 1) KARNI JEWELLERS, C/O. SRI S.RAMA RAO, ADVOCATE, FLAT NO. 102, SHRIYAS ELEGANCE, 3 - 6 - 643, STREET NO. 9, HIMAYAT NAGAR, HYDERABAD. 2) THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 4(1), HYDERABAD. 3) CIT(APPEALS) - 1, HYDERABAD. 4) THE PR.CIT - 1, HYDERABAD. 5) THE DR, ITAT, HYDERABAD 6) GUARD FILE