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2017 (2) TMI 36 - RAJASTHAN HIGH COURT

2017 (2) TMI 36 - RAJASTHAN HIGH COURT - TMI - Addition of unexplained expenditure under Section 69C - rejection of the books of accounts u/s 145(3) - Held that:- The main source of income of the Assessee was from salary and partly from commission and brokerage. During the year under consideration the assessee started export business in gems and stones and has earned income only from Export business and bank interests. During the year under consideration the assessee has declared total export tu .....

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ared Nil export and has declared income from salary as was done previously before he started his export business. It appears that this is an isolated case of export by the assessee in past several years. In view of the above facts, it is clear that the assessee had done the business of export mainly for one fyear i.e. for the fyear under consideration. It is not understood as to how there was such a huge export turnover in one year. That too in the first year of business and then there was subst .....

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xport and tax benefits and we are of the opinion that it is a bogus purchase - Decide against assessee - D. B. Income Tax Appeal No. 301 / 2008 - Dated:- 18-1-2017 - K. S. Jhaveri And Vinit Kumar Mathur, JJ. For the Appellant : Mr. K.D. Mathur on behalf of Mr. R.B. Mathur For the Respondent : Ms. Ishita Rawat on behalf of Mr. Gunjan Pathak JUDGMENT Per Hon ble Jhaveri J. 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has partly .....

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circumstances of the case, the ITAT has not acted perversely and illegally in coming to the conclusion that the rejection of the books under Section 145(3) of the Act by the Assessing Officer as unjustified? 3. The facts of the case are that the return of income for the assessment year 2001-02 was filed by the assessee on 31.10.2001 declaring a total income of ₹ 22,80,360/-. The case was selected for scrutiny u/s. 143(3) by issue of notice u/s. 143(2) on 21.10.2002. A fresh notice 142(2) d .....

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nk interests. During the year under consideration the assessee has declared total export turnover of ₹ 2,35,10,077/- upon which gross profit of 1,15,62,119/- was shown thereby giving a G.P. rate of 49.8%. This is the first year of business of the assessee. During the next financial year 2001-02 the assessee has declared total export turnover at ₹ 32,71,097/- upon which gross profit of ₹ 18,01,075/- is shown thereby giving a GP Rate of 55%. On perusal of the return filed for the .....

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xport turnover in one year. That too in the first year of business and then there was substantial fall in the next year and subsequently there was no business of export in any of the years. This shows that this is not the regular business of the assessee. 4. Counsel for the appellant has contended that the identical issue was decided by the Court in the case of Commissioner of Income Tax vs. M/s. Bright Future Gems in DB Income Tax Appeal No.305/2008, decided on 02.11.2016 more particularly in p .....

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s a partner. In fact Satya Pal Jain was partner of M/s Medipac, one of the sister concerns of the assessed firm. On enquiries conducted by the authorities after due notice to the assessed it was found that there was no such concern called M/s Kalpana Enterprises at either 71, Canning Street, Calcutta or 479, Bartan Market, Sadar Bazar, Delhi. Additionally Chedi Lal opened the bank account with the introduction of Satya Pal Jain and the amounts were withdrawn. If the purchases were really effecte .....

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terprises. These are some of the relevant materials which have not been considered by the Tribunal. Tribunal's conclusion that even if it is accepted that Chedi Lal was only an instrument used by Satya Pal Jain, assessed was not involved in it, is a conclusion arrived at without any foundation. On the contrary it has been established by materials on record that assessed knew that the whole thing was a fictitious arrangement. Once it is accepted that the supplies were not made by Kalpana Ente .....

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d purchases from anybody else. Its stand throughout was that it had effected purchases from M/s Kalpana Enterprises. It was not open to the Tribunal to make out a third case, which was not even the case of the assessed, to hold that the transactions were real and not fictitious as claimed by the Revenue. 6. We have heard the counsel for the appellant. 7. Before considering the matter, it will not be out of place to mention here that question which is posed for our consideration is whether the pu .....

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