TMI Blog2015 (8) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. Rejection of books of accounts - Held that:- The assessee raised this ground before us. On verification of form No. 35, there was no specific ground on rejection of books U/s 145(3) of the Act. Further the Hon'ble Rajasthan High Court as well as the Coordinate Bench of the ITAT, Jaipur in various cases of gems and jewellery business has held that the book result is not reliable and accordingly Assessing Officer's action U/s 145(3) is justified. The detailed findings on this issue has been given by this Bench in the case of Shri Anuj Kumar Varshney Vs. ITO [2015 (4) TMI 533 - ITAT JAIPUR] - Decided against assessee. Trading addition by applying G.P. rate of 17% as against the G.P. rate of 12.61% declared by the assessee - CIT(A) deleting the addition by applying the G.P. @ 17% as against the disallowance of ₹ 45,03,020/- @ 25% on unverifiable purchases made by the Assessing Officer - Held that:- 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] where on unverifiable/bogus purchases 15% disallowances has been decided. Accordingly, we also apply 15% disallowances on unveri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that even form No. 36 was misplaced in July, 2005 whereas the assessee has asked to supply the copy of form No. 36 from Hon'ble ITAT on 15/5/2013. There was a lapse of more than 10 months. If the assertion made by the assessee was correct, he might have asked to supply the copy of form No. 36 within 1 or 2 months after the misplacement of form No. 36 as claimed by the assessee. Therefore, there is no reason to condone the delay in filing the C.O. 5. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee filed the present C.O. on 03/6/2013. Copy of form No. 36 was served on the employee of sister concern admittedly on 14/7/2012. The AR of the assessee has not explained day to day delay with reasons in filing of the C.O. We find merit in the contentions of learned DR. The assessee has only filed a vague and general affidavit from a partner of the assessee and employee of the sister concern of the assessee, which utterly lacks any specific contentions and fails to explain day to day delay in reasonable manner. It does not conform to general human conduct in such circumstances, preponderance of probabilities and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 147 of the Income Tax Act, 1961 (in short the Act). The ld AR of the assessee has drawn our attention on reasons recorded by the Assessing Officer for reopening as under:- (i) On the basis of annexure 25 to 28 proceedings u/s 147 for A.Y. 2003-04 was initiated. Annexure 25 pertains to A.Y. 2004-05. As per information gathered in survey and finding given in A.Y. 2006-07 and 2003-04, income chargeable to tax for the year under consideration has escaped assessment. (ii) The purchases are unverifiable, since its nature is same as in A.Y. 2003-04, where addition was made. This aspect needs verification and the exact quantum can be ascertained only after verification. (iii) There are other issues arising from survey for which return filed for A.Y. 2004-05 required verification for quantification of escaped income. As per A.R. none of the reasons indicated above has reason to believe that any income has escaped assessment.. The reopening was on the basis of annexure-25 to 28, which was impounded during the course of survey in the case and carried out on 18/5/2003 in group cases of the firm. Consequently, assessment for the A.Y. 2006-07 was also framed by the ACIT, Circle-1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst challenging the rejection of book U/s 145(3) of the Act. It is submitted by the AR that the assessee had maintained complete day to day books of account, which are subject to audit. All the transactions of purchases and sales are fully verifiable from the supporting bills, vouchers and documents maintained by the assessee. The assessee made purchases with full vouchers. The supplier was registered in the sales tax department. The payments were made through account payee cheque. The addresses of the supplier is on the bill. The assessee had filed the confirmation of the purchases. The assessee has discharged his burden of proof, therefore, books of account rejected U/s 145(3) of the Act is not justifiable. 10. At the outset, the ld DR has supported the order of the ld CIT(A) and she further argued that as per form No. 35, the assessee has not taken specific ground before the ld CIT(A) even she has confirmed the rejection of books of account U/s 145(3), therefore, assessee's ground is not maintainable under the law. 11. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee raised this ground before us. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount Rs. 1. A R Exports 227, Sumer Karn Ji Ka Rasta, Ramganj, Jaipur 1423/05398 2,149,076 2. Adinath Gems 3613, MSB Ka Rasta, Johari Bazar, Jaipur AAMPJ204A 8632250994 1,726,704 3. Ambika Impex B-20, Ratna Sagar, MSB Ka Rasta, Johari Bazar, Jaipur AHHPS3389N 1451/01301 370,521 4. Creative Gems B-12, Ratna Sagar, MSB Ka Rasta, Johari Bazar, Jaipur 413,427 5. Creative International 1145, Barkat Nagar, Tonk Road, Jaipur AAHPV1885S 8092105791 244,470 6. DJ Impex 1447, Jadiyon Ka Rasta, Chaura Rasta, Jaipur ABEPV9059R 8702252275 1,859,732 7. Esdire I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,133,389 20. Triveni Gems 1538, Nagawala House, Sonthliwalon Ka Rasta 8641600652 305,037 Total Unverifiable Purchases 1,80,12,079 The ld AR submitted before the Assessing Officer that the assessee made these purchases and paid these parties through account payee cheques. The assessee furnished confirmation and claimed that the payments were made through account payee cheques. The purchases made from the relative under the provisions U/s 40A(2)(b) of the Act, the price was reasonable. The assessee also furnished addresses in all the parties and PAN in some of the cases. After considering the assessee's reply, the ld Assessing Officer observed as under:- i) Though the assessee has quoted the PAN No. of the suppliers, yet the fact of transfer of goods mentioned in the bills to the assessee is not subject to verification; ii) The business does not exist at the notified address. No new address has been provided by the assessee for further verification. The summons issued has been returned unserved. iii) Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory Vs. ITAT 178 CTR 420 (Raj). ix) The assessee has argued that if any discrepancy in the purchases is noticed, then it should be treated to have been merged with the assessment for the survey year where surrender/addition on account of unexplained stock. This argument has no force. Assessee himself has admitted that he is not maintaining any quantitative details. Therefore, it is not ascertainable that the goods purchased before 31/3/2004 is available with the assessee in subsequent years. Assessee's argument is baseless. Thereafter he rejected the book result U/s 145(3) of the Act and applied 25% on bogus purchases of ₹ 1,80,12,079/- and ₹ 45,03,020/- was added to the total income of the assessee. 13. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had confirmed the addition @ 17% on total sale turnover and net addition of ₹ 10,61,214/- was confirmed. The finding of the ld CIT(A) is reproduced as under:- 5.3 I have carefully perused the order of the A.O. and the submissions of the AR. It is a fact that the appellant was not able to verify the purchases made from 20 parties again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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