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M/s Gupta Jewel Corporation Versus Dy. Commissioner of Income Tax Central Circle-2, Jaipur

2015 (7) TMI 203 - ITAT JAIPUR

Unaccounted purchases - Held that:- We have heard the rival contentions of both the parties and perused the material available on the record. Similar line of cases, this Bench has decided in the case of Shri Anuj Kumar Varshney Vs. I.T.O. and other cases [2015 (4) TMI 533 - ITAT JAIPUR] wherein 15% disallowances has been held reasonable on considering the detail discussion on facts and legal position on unverifiable purchases/bogus purchases. Accordingly, we also apply 15% disallowances on unver .....

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A), Central, Jaipur for A.Y. 2008- 09. The effective grounds of appeal are as under:- 1 That on the facts and in the circumstances of the case the Ld. CIT(A) is wrong, unjust and has erred in law in confirming finding recorded by the Assessing Officer that purchase of ₹ 10040088/- made by the appellant are not verifiable. 2. The Ld CIT(A) is further wrong and has erred in law in upholding rejection of books of accounts of the appellant by the Assessing Officer U/s 145(3) of the IT Act, 196 .....

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owance of ₹ 93347/- being 1/5 of depreciation and insurance of car on account of alleged personal use. 5. That the appellant craves the permission to add or to amend to any of ground of appeal or to withdraw any of them. 2. All the grounds of appeal are interlinked and against confirming the trading addition of ₹ 25,10,022/- made by the A.O. by disallowing @ 25% unverifiable purchases of ₹ 1,00,40,088/- though the rejection of books of accounts U/s 145(3) of the IT Act, 1961 wa .....

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The ld Assessing Officer observed that during the year under consideration, the assessee had shown G.P. rate of 12.34% on the total sales as against G.P. rate of 14.73% declared in the immediately preceding year. He further observed that the assessee was asked to furnish details and supporting evidence of opening and closing stock, basis of valuation and also furnish stock register but failed to furnish any stock register and also failed to give quantitative and qualitative details of stock and .....

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/8/2007 4,31,138/- 530 M/s Amar Gems 2/1/2008 2,97,594/- 555 M/s Amar Gems 4/2/2008 2,68,412/- 454 M/s Gems Ocean 3/4/2007 9,82,917/- 724 M/s Gems Ocean 3/1/2008 3,23,891/- 763 M/s Gems Ocean 5/2/2008 2,62,925/- 125 M/s Raj Shree Gems 25/8/2007 3,25,752/- 53 M/s V.S. Jewellers 2/6/2007 7,08,561/- 6 M/s Vijay Gems 4/4/2007 7,26,762/- 8 M/s Vijay Gems 4/6/2007 9,60,040/- 47 M/s Vijay Gems 2/7/2007 2,15,622/- 110 M/s Vijay Gems 1/10/2007 1,57,278/- 04 M/s Subhlaxmi gems 4/4/2007 7,41,760/- 06 M/s S .....

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g accommodation entries and not doing any genuine sale purchase of the gems & jewels. The assessee was asked to produce the above parties along with books of account in order to prove the genuineness of transaction. In response to this, the assessee submitted its reply, which was not found convincing and acceptable by the ld Assessing Officer. He relied on the various case laws i.e.: (a) M/s Kanchwala Gems Vs. JCIT ITD No. 134. (b) CIT Vs. Precision Finance P Ltd. 208 ITR 465 (Cal). (c) M/s .....

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facts are in the knowledge of the assessee it is his duty to provide the correct address or contact modes of the alleged suppliers. Payment of account payee cheque is not sacrosanct. The learned Assessing Officer after considering the assessee s reply and relying upon the decision in the case of Kachwala Gems Vs. JCIT 288 ITR 10 (SC), he rejected the book result U/s 145(3) of the Act and after following the decision in the case of Sanjay Oil Cake Industries Vs. CIT (2008) 10 DTR (Guj)153, he di .....

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ed to furnish any documentary evidence and source of such commission payment, hence the same is taxed in the hands of its income as payment made out undisclosed sources. The ld Assessing Officer observed that the assessee had concealed the particulars of his income and furnished inaccurate particulars of income by reducing its gross profits, therefore it is a fit case for initiating penalty proceedings U/s 271(1)(c) of the IT Act, which was being done separately. With regard to another ground i. .....

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e had not disallowed the proportionate amount of deprecation of ₹ 4,32,552/- and insurance for these car at ₹ 29,184/-. He disallow 1/5 of depreciation on car as well as insurance on car which comes to ₹ 93,347/-, the same is added in the total income of the assessee. 3. Being aggrieved by the order of the learned Assessing Officer, the assessee carried the matter before the learned CIT(A), who had allowed the assessee s appeal partly by observing as under:- 5. As already point .....

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ecord of citrine is as low as 3.2% and of amethyst is only 3.84%. Moreover, these yields so shown are certainly below the yield shown by other manufacturer in the similar line of business. Apart from it, the purchases shown from these unverifiable parties is certainly inflated. All these facts and circumstances in the instant case of the appellant, which have been noticed by the A.O. and further facts noticed by the undersigned regarding suppressed yield and other defects for the year under cons .....

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e of 25% out of the unverifiable/bogus purchases made by the Hon ble ITAT. Considering the facts and circumstances of the case and the legal position under consideration, particularly considering the ratio decindi of the above cited cases, the disallowance of 25% out of the bogus as well as unverifiable purchases totaling to ₹ 1,00,40,088/- is upheld, which comes to ₹ 25,10,022/- and balance addition of ₹ 5,02,004/- is deleted. The ld CIT(A) has further held regarding commissio .....

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ion of ld. AR and have perused the material on record. It is settled legal position that in case of proprietory business or firm, if the vehicle is not fully and exclusively utilized for the purpose of business, then proportionate disallowance of depreciation need to be made part from disallowance out of vehicle running expenses. Since appellant has himself rightly considered vehicle expenses partly being personal in nature and added ₹ 70,516/- in the computation of total income, proportio .....

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