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2015 (10) TMI 740 - ITAT JAIPUR

2015 (10) TMI 740 - ITAT JAIPUR - TMI - Bogus purchases - not providing opportunity of cross examination of the persons whose statements have been used against the assessee - Held that:- This Bench of ITAT has taken decision to apply 15% net profit rate on unverifiable purchases in the cases of Anuj Kumar Varshney and others vs. ITO (2015 (4) TMI 533 - ITAT JAIPUR). However, assessee's request is accepted and the AO is directed to reframe assessment order by considering outcome on this issue as .....

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or verification by the AO but the assessee showed inability to produce the parties. The AO sent his Circle Inspector to verify the facts about the existence of the parties but they were not found at the given addresses. Therefore, the assessee has not discharged its onus to prove the purchases debited in profit and loss account as genuine and the assessee has not shifted his onus on the Revenue - Decided against assessee. - ITA No. 561/JP/2013 - Dated:- 7-9-2015 - SHRI R.P. TOLANI, JM & SHRI .....

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atements have been used against the assessee. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the entire assessment order which is passed in gross violation of principle of natural justice. 2. In the facts and circumstances of the case and in law, the ld. CIT(A) has erred in confirming the action of the ld. AO in holding the purchases from the following parties as bogus. S.N. Name of parties from whom pur .....

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sions of Section 145(3) and thereafter making a trading addition of ₹ 1,22,500/-. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the rejection of books of account and deleting the trading addition of ₹ 1,22,500/- made by the AO is confirmed. 2. Brief facts of the case are that the assessee company is engaged in the business of manufacturing and trading of gold jewellery studded with Diamond a .....

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f semi-precious stones, had made purchases in one bulk but the sales had been made in different qualities at different rates. The AO observed that because of this defect, the trading results of the assessee are not verifiable. He thus invoked the provisions of Section 145(3) of the Act. The AO also observed that the assessee had made purchases from M/s. Ashish Jewellers for ₹ 2,44,500/- and M/s. Anupam Export for ₹ 2,45,500/- totaling to ₹ 4.90,000/-. The AO observed that as pe .....

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ve parties being the entry providers but assessee showed its inability to produce the parties. The AO made efforts to enquire about these parties about the genuineness of the purchases but no party was found at the existing address and the inspector of the concerned circle confirmed that no such business concerns exists at the given address. 3. The AO observed that books of the assessee are not reliable and true profits could not be deduced from them and he has no option except to estimate the t .....

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unverifiable purchases of ₹ 4,90,000/- which worked out to ₹ 1,22,500/- and the same has been added to the income of the assessee. 4. The assessee had preferred first appeal before the ld. CIT(A) who by considering the order of the AO as well as submissions of the assessee dismissed the appeal of the assessee by observing as under:- I have considered the facts of the case and the submissions made. From the perusal of the details on record, it is seen that although the appellant had .....

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istence of these firms. The verification of transactions cannot be said to have been completely made because of the non-production of the parties for examination. Further, the ld. CIT(A) has relied upon various decisions where it was held that non-verifiable purchase constituted a serious defect in the books of account due to which the same were liable for rejection. In view of the foregoing, the rejection of books of account by the AO is held to be justified and is sustained. This part of groun .....

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case, the trading addition made by the AO of ₹ 1,22,500/- is therefore, confirmed. 5. Now the assessee is before us wherein the ld. AR of the assessee argued that the issue involved in the present appeal pertains to unverifiable purchases. In view of the consistent view taken by Hon'ble Bench, he humbly requested to set aside the case to the file of the AO. The ld. AR of the assessee also drew our attention to the following case laws. 1. ACIT vs. Allied Gems Corporation (ITA No. 716/J .....

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