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TMI Blog2016 (5) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... Appeal No.129/2015 - - - Dated:- 6-5-2016 - Mr. Justice M.N. Bhandari and Mr. Justice J.K. Ranka Mr. NL Agrawal, counsel for the appellant BY THE COURT (Per: Hon'ble J.K. Ranka, J.) 1. Instant appeal under Section 260A of the Income Tax Act, 1961 (for short, 'Act') is directed against the order dt. 05/06/2015 passed by the Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short, 'Tribunal') in ITA No.644/JP/2012. It relates to the assessment year 2007-08 2. Brief facts noticed for disposal of the appeal are that the appellant-assessee is engaged in the business of manufacturing and export of silver jewellery and also trading of semi-precious stones. On perusal of the books of accounts, it was noticed by the Assessing Officer (for short, 'AO') that the assessee has shown total purchases of ₹ 4,19,29,991/- out of which on random basis, the AO directed to provide further details and to produce the parties from whom the assessee had purchased goods to the extent of ₹ 57,48,691/-. The AO during the course of proceedings observed that information had been gathered by the Revenue that no such concerns exists on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowing 25% of the unverifiable purchases of ₹ 57,48,691/- based on the judgment of this Court in case of Indian Woolen Carpet Factory Vs. ITAT and others: (2002) 178 CTR 420 and so also the judgment of Gujarat High Court in the case of M/s Sanjay Oil Cake Industries Vs. Commissioner of Income Tax:(2008)10 DTR (Guj.)153 and other judgments made aforesaid additions. 4. The matter was carried in appeal before the Commissioner of Income Tax (Appeals) (for short, 'CIT(A)') who though was satisfied that the books of accounts are to be rejected under Section 145(3), however, on the issue of reasonableness of the gross profit rate, the trading addition of ₹ 14,37,173/- was reduced to ₹ 67409/-. 5. The Revenue carried the matter in appeal before the Tribunal and the Tribunal, following the judgment in the case of Shri Anuj Kumar Varshney Vs. I.T.O. and other cases in ITA No.187/JP/2012 order dt.22/10/2014, taking into consideration the overall discrepancies and the facts noticed, made disallowance of 15% out of unverifiable purchases and accordingly directed for making addition to this extent. 6. Learned counsel for the appellant contended that the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount 1 M/s. Selective Gems 5,64,701/- 2 M/s. Aayush Jewellers 2,65,415/- 3 M/s. Govindam Jewellers 13,28,897/- 4 M/s. Gaurav Exports 6,86,130/- 5 M/s. Touch Jewels 10,14,794/- 6 M/s. Anil Exporters 6,82,664/- 7 M/s. Mahaveer Gems Jewels 3,93,680/- 8 M/s. Bright Jewels 8,12,410/- Total 57,48,691/- However, the defence of the assessee throughout is that they made purchase through broker. He may also place on record as to who are the brokers along with name, address and amount of brokerage paid by the assessee and as claimed by the counsel of which reference has been made by the Assessing Officer and CIT(A) in its assessment order dt.12/11/2009 and appellate order dt.12/04/2012. List o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er book placed on record is the one filed before CIT(A) which shows enclosures as:- S.No. Particulars Page No. 1. Copy of confirmation 1-8 2. Copy of audit report u/s 44AB of the Assessee 9-25 3. Copy of bank accounts of the assessee 26-41 4. Copy of admission made before the Learned A.O. 42-44 CERTIFICATE Certified that papers at Sr. No.1 to 4 and page no.1 to 44 were before the Learned Assessing Officer. Sd/- (Counsel for the assessee) 13. The said does not contain copies of the purchase bills and certificate annexed which makes it clear that even purchase bills were not submitted even before the learned A.O. 14. We may also add that the order in this context was passed by this Court on 26/11/2015 for hearing on 08/01/2016 but the counsel sought time on 08/01/2016, 25/01/2016, 19/02/2016, 01/04/2016 23/04/2016 and it was only when this Court made it clear on 23/04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erification, but despite ample opportunities having been granted, the parties were not produced, particularly in view of the fact that the summons at the addresses given by the assessee himself either came back unserved and returned unserved by postal authorities or if served none of them presented before the A.O. It is the prime duty of an assessee to produce the sellers from whom he has purchased the goods in view of the fact that notices came back unserved. On perusal of the copies of the accounts of the firms as also the other details, it is noticed that from some of the parties, the goods purchased were to the extent of ₹ 12 to ₹ 20 Lacs. Merely because the parties are assessed to income tax and the transactions being by account payee cheques will not prove the genuineness of the transactions in view of the fact that in case of sellers as observed by the A.O. some of the parties denied the sale and stated that they did not sell the goods and merely issued bills without effecting actual delivery. Once this fact has come on record that the notice could not be served for one or the other reasons and the parties did not turn up then in our considered view the onus and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment passed by it in the case of Shri Anuj Kumar Varshney Vs. I.T.O. and other cases in ITA No.187/JP/2012 dt.22/10/2014, where the case of G.B. Impex Vs. Income Tax Officer was also part of the appeals decided by the Tribunal. 21. We may also deal with the judgments relied upon by counsel for the appellant. 22. In the case of Commissioner of Income Tax, Orissa Vs. Orissa Corporation (P) Ltd. (supra), the facts noticed by the Apex Court were that the assessee has given names and addresses of the alleged creditors, it was in the notice of the Revenue that the said creditors were income tax assessees, their index number was in the file of the Revenue, still the Revenue apart from issuing notices under Section 131 at the instance of the assessee did not pursue the matter further. The Revenue did not examine the source of income of the said alleged creditors to find out whether they were credit worthy or were such who could advance the alleged loan, there was no averment to pursue the so-called alleged creditors and on such finding, it came to the opinion that the assessee has discharged the burden and found no question of law to be involved. However, the facts in the instant c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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