2015 (5) TMI 1253 - AT - Income Tax

Estimation of income - bogus purchases - HELD THAT - We are not inclined to grant adjournment and inasmuch as before the Hon ble High Court whether the question of law has been admitted stage of hearing and likelihood of time of decision has not been explained to us. It will be expedient that instead of mounting the pendency before ITAT and refixing these appeals again and again the AO will take a view in this matter in consonance with the Hon ble Rajasthan High Court s judgment. It will avoid repeated fixation and unnecessary pendency before the ITAT inasmuch as the Hon ble Rajasthan High Court judgment will be binding on all concerns. In view thereof we reject the adjournment application. After hearing the ld DR perusing the material available on the record we set aside the matter back to the file of Assessing Officer to decide the same.

Summary

Issues:
Appeal against trading addition based on alleged bogus purchases for A.Y. 2007-08.

Analysis:
The appeal was filed against the order passed by the CIT(A)-II, Jaipur for the assessment year 2007-08. The main challenge was regarding the trading addition of Rs. 18,94,013 made by the Assessing Officer due to alleged bogus purchases of Rs. 75,76,052, which led to the rejection of the books of account. The ITAT bench referred to a previous case involving similar unverifiable purchases of precious and semi-precious stones, where a 15% disallowance out of bogus purchases was deemed reasonable. The rejection of books of account was upheld, providing partial relief to the assessee.

The counsel for the assessee requested an adjournment citing pending appeals before the Rajasthan High Court. However, the ITAT was not inclined to grant an adjournment as the status of the pending appeals before the High Court was not adequately explained. The ITAT emphasized the need to avoid unnecessary delays and repeated fixation of appeals. Consequently, the matter was remanded back to the Assessing Officer to decide in accordance with the judgment of the Rajasthan High Court once delivered, to prevent prolonged pendency before the ITAT.

Ultimately, the appeal of the assessee was allowed for statistical purposes only, indicating that while the appeal was accepted, it did not result in any substantive changes to the original decision. This comprehensive analysis highlights the key legal issues, the decision-making process of the ITAT, and the implications of the judgment in the context of the ongoing legal proceedings and the precedents set by previous cases.