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TMI Blog2016 (12) TMI 1708X X X X Extracts X X X X X X X X Extracts X X X X ..... circumstances of the case and in law the ld. CIT(A) is justified in deleting the disallowance of foreign traveling expenses of Rs. 1,00,000/- made by the AO. (iv) Whether on the facts and in the circumstances of the case and in law the ld. CIT(A) is justified in deleting the addition made by the AO u/s 40(a)(ia) on account of non-deduction of TDS on Credit card commission. C.O. No.65/JP/12 (i) The ld CIT(A) has erred on facts and in law3 in confirming the trading addition to the extent of Rs. 6,63,915/- by applying the g.p.rate of 25.5% as against the G.P. rate of 25.06% declared by the assessee. (ii) The ld. CIT(A) has erred on facts and in law in confirming the disallowance of Rs. 1,44,276/- out of the commission paid to the four parties/agents @ 20% of the total commission of Rs. 7,21,380/- paid to them. 2. Regarding ground no. 1 of the revenue and cross objection no. 1 of the assessee, the brief facts of the case are that the assessee firm is engaged in the business of trading, manufacturing and export of handicrafts, gold, silver jewellery, precious, semi precious and cut stones. During the year, it declared gross profit of Rs. 3,78,67,-74/- on turnover of Rs. 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO has erred in treating the purchases of Rs. 63,21,501/- from M/s Clarity Gold Pvt. Ltd. as non-genuine. In respect of purchases made from the remaining 3 parties aggregating to Rs. 37,79,228/-, the complete details of these parties were submitted during the course of assessment proceedings vide letter dated 24.11.2011. Therefore, only for the reason that they have not filed the information or that summons were return unserved, purchases made from these parties cannot be held to be non-genuine. The Hon'ble ITAT Jaipur Bench in assessee's own case, on the same facts, in A.Y. 2004-05 to A.Y.2008-09 wherein the addition was made by AO by disallowing 25% of the alleged unverifiable purchases has reduced such addition by applying G.P. rate considering the past history. Therefore, when Hon'ble ITAT has consistently determined the income of the assessee by applying a G.P. rate and the facts for the year under consideration is same as in earlier years, the CIT(A) has rightly deleted the trading addition made by the AO by disallowing 25% of the alleged unverifiable purchases. The Hon'ble ITAT Jaipur Bench, Jaipur vide order dated 22.10.2014 in case of Anuj Kumar Varshney vs. ITO (2014 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases shall be the income of the assessee from undisclosed sources in the relevant year. Therefore, the appeals may be decided in view of the ITAT order. At the same time, it is pleaded that both the revenue and assessee have gone in appeal before Hon'ble Rajasthan High Court against this bunch of orders. 2.3 We have heard the rival contentions and pursued the material available on record. We found force in the arguments of the Ld AR that when the department has accepted the sales made by M/s Clarity Gold Pvt. Ltd which is assessed to tax, how the purchases made by the assessee from the same party can be held to be unverifiable/non-genuine more particularly when the party has given the confirmation for the transaction. We accordingly agree with the contention of the assessee and the AO is directed to allow the said claim after verifying the assessment records of M/s Clarity Gold Pvt Ltd. Further, the matter in respect of unverifiable purchases in case of Anuj Kumar Varshney vs. ITO (supra) as referred by the ld AR has since been referred and pending adjudication before the Hon'ble Rajasthan High Court. Given the consistent stand taken by this Bench, we are inclined to set as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax has been deducted at source on commission payment. The summarized position of outcome of the issue of notice u/s 131 is as under: * Out of 21 parties, 17 parties (total commission payment to them Rs. 29,45,182/-) complied with the summons and filed the reply directly to the AO wherein they have accepted the fact of receipt of commission. * These 17 parties have also filed their income tax returns wherein the commission income is declared. In 11 cases, commission income declared in the return is matching with commission paid by the assessee. In 6 cases, commission income declared in their return is less than the commission paid which is for the reason that these persons may have claimed certain expenses against the commission receipts. * In respect of 4 parties who did not comply with the summon, the AO did not took any action against them even when summons were served on them. Out of these 4 persons, Shri Sudhir Jain to whom commission of Rs. 1,24,1790/- is paid has complied with the summon u/s 131 by filing letter dated 13.12.2011 but it was not considered by the AO. The AO has also not given any opportunity to the assessee to adduce the evidence in respect of these 4 p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bench that the entire travelling expense has been incurred for the purpose of the business. Out of total expenditure of Rs. 21,95,887/- foreign travelling expenses are of Rs. 17,78,080/-undertaken by partners and employees for the purpose of the business. Out of the total foreign travelling expense, expenses amounting to Rs. 13,41,519/- was incurred on trip undertaken to USA to participate in Las Vega Jewellery Show cum exhibition. Mr. Vikas Kaul accompanied in this trip. He is a tourist guide and having visa of USA. Therefore, he was taken to Las Vegas Jewellery show to assist the assessee in the jewellery show cum exhibition held there Thus the expenditure incurred on the guide is for the purpose of the business. So far as visit of Neeta Dadda is concerned, she is partner in the firm and looking after the business. There is no expenditure of other family members. 4.2 We have heard the rival contentions and pursued the material on record. The assessee has provided the necessary explanation in respect of travel of tourist guide Vikas Kaul and Neeta Dadda who is a partner in the firm. Further, it is noted that on similar facts, the disallowance was deleted by ld CIT(A) for AY 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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