Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 1122 - AT - Income TaxDisallowance of 25% of the unverifiable purchases - Held that:- The issue under consideration relates to taxability of unverifiable purchases of precious and semi precious stones used in jewellery manufacturing. The Coordinate Bench of ITAT in a bunch of appeals, on similar issue, by consolidated order in the case of Anuj Kumar Varshney & Others vs. ITO (2015 (4) TMI 533 - ITAT JAIPUR) has held that 15% of unverifiable purchases shall be held to be income of the assessee from undisclosed sources in the relevant years. It is also brought to our notice that both Revenue and assessee have gone in appeal before Hon’ble Rajasthan High Court against this bunch of orders. In similar cases, to avoid multiplicity of appeals, this Bench has set aside the impugned issues raised in such appeals, to the file of the AO to decide the same afresh after the judgment of Hon’ble Rajasthan High Court in the case of Anuj Kumar Varshney & others (supra) is delivered. Therefore, following our earlier orders on the same lines, the issue raised in subject appeal is also accordingly set aside to the file of the AO to decide afresh - Decided in favour of revenue for for statistical purposes. G.P. addition - CIT(A) reducing the G.P. rate on reduced sale by giving weighted average price, not following AS-2 and giving telescoping benefit to the assessee - Held that:- Regarding the net profit decided by the Assessing Officer and partly confirmed by the ld CIT(A), the ld Assessing Officer made valuation of sale on approval memos on the basis of average method. However, the assessee chose to apply weighted average price method, it is a fact that in jewellery business, particularly diamonds are sold on the basis of colour, cut, clarity and carat, therefore, the ld Assessing Officer was not right to apply simple average method of valuation of sale made on approval memos. The assessee’s calculation of sale on the basis of approval memos is more scientific than the Assessing Officer. The ld CIT(A) had applied G.P. rate @ 20%. The assessee has shown G.P. rate on the basis of regular books of account @ 18.44% as mentioned by the Assessing Officer on page 2 of the assessment order. Therefore, the GP applied by the ld CIT(A) is also reasonable. Further the ld CIT(A) has allowed the set off against the excess stock found during the course of search, which is also reasonable on the ground that there is no evidence found during the course of survey that either firm or partner of the firm has taken out the income upon unaccounted sale and made expenditure or made investment outside the book. Therefore, she rightly allowed the set off unaccounted income estimated by applying G.P. rate on sale made through approval memo. - Decided against revneue
|