TMI Blog2018 (4) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri Neena Jeph (JCIT) ORDER Per : Vijay Pal Rao, J. M. These are two appeals one of the Revenue is directed against the order dated 01.07.2011 of ld. CIT(A), Jaipur arising from assessment order passed u/s 143(3) of the Act and another by the assessee is directed against the order dated 19.09.2016 of CIT(A), Jaipur arising from reassessment order passed u/s 147 r.w.s. 143(3) of the Act for the assessment year 2008-09. 2. The original assessment order was completed by the AO u/s 143(3) of the Act on 16.12.2010 whereby the AO made an addition of ₹ 1,19,58,445/- on account of purchases made by the assessee from 12 parties treating the same as not genuine. On appeal, the ld. CIT(A) deleted the addition/disallowance made by the AO except an addition of ₹ 3,00,000/- on this account. Thus, the Revenue has filed the present appeal. In the meantime the Assessing Officer reopened the assessment by issuing a notice u/s 148 on 30.03.2015 whereby proposed to assess a further income of ₹ 1,33,94,163/- on account of purchases made by the assessee from Adi Impex. The Assessing Officer in the reassessment proceedings rejected the books of account u/s 145(3) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ound of assessment whereby the assessee is aggrieved the order of the ld. CIT(A) in the reopening of the assessment. The assessee firm is deriving income from export of precious and semi precious stones including export of gold and silver jewellery. In the original assessment passed u/s 143(3) the AO doubted the purchases made from 12 parties and when the assessee could not produce the suppliers for examination, the AO treated the purchases to the extent of ₹ 1,33,94,163/- as not genuine and disallowance the same. On appeal, the ld. CIT(A) after considering the relevant facts as well as evidences produced by the assessee before the AO in support of the purchases made from these 12 parties has adjudicated the issues in para 2.3 as under:- 2.3. I have carefully considered the facts of the issue under consideration, observations of the AO and also the submissions made by Ld. AR in this regard. Before going into the merits of the rival stands, the primary claim of the appeal that the present issue has already been dealt and decided by the Hon'ble ITAT, Jaipur bench, in their favour, in the past, was examined. On perusal of the relevant orders of A.Y. 2006-07 2007-08, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the issue under consideration, if any consequently, this ground of appeal is partly upheld. Thus, it is clear that the ld. CIT(A) while deleting the addition made by the AO has followed the decision of this Tribunal in assessee s own case for the assessment year 2007-08. It is also not disputed that the assessee is an exporter of precious and semi precious stones as well Jewellery therefore, when the export of goods is not in dispute then the purchases of the corresponding quantity cannot be doubted except the cost of purchase which might have been inflated by the assessee. However, it is not the case of the A.O. that the assessee has inflated the purchases in comparison to the prevailing market price of the goods. Therefore, when the GP rate of the current year declared by the assessee at 18.55% is better than the earlier assessment year at 17.36% which has been accepted as finally decided by this Tribunal in deleting the addition made by the AO then no addition is called for on this account. Hence, as far as the Revenue s appeal is concerned in the absence of any contrary material or fact we do not find any error or illegality in the impugned order of the ld. CIT(A). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is not permissible when the AO resorted invoke the provisions of section 145(3) of the Act. Thus, this action of the AO is contrary to the decision of rejecting the books of accounts. Accordingly, we do concur with the view of the ld. CIT(A) in applying the GP rate for assessment of the income of the assessee after the rejection of books of account. This Tribunal comprising the same combination in case of CIT vs. Allied Gems Corporation in ITA No. 794/JP/2011 vide order dated 15.12.2017 considering then an identical issue has held in para 5 as under:- 5. We have considered the rival submissions as well as relevant material on record. The Assessing Officer rejected the books of account by invoking the provisions of section 145(3). The issue of rejection of books of accounts is involved in the cross objection filed by the assessee, therefore, we deal with this issue while deciding the cross objection. Once, the books of accounts are rejected by the AO the only course of action left to the AO is to assess the income of the assessee on the basis of best judgment and GP rate is considered as proper and reasonable basis and guidance for the best judgment. Once, the books resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of lack of this complete information supplied by the assessee. It means that the assessee failed in establishing the genuineness of the so called trade creditors appearing in its books of account. We are further of the opinion that since in the instant case of the assessee, the point under consideration before us is regarding the genuineness of the liability amounting to ₹ 1,75,26,586 shown by the assessee in its balance-sheet as trade creditors, so it was not relevant for us to consider as to whether the purchases made by the assessee were genuine or not or to whether the assessee has inflated those purchases or not. It is also not material to consider whether the GRs from sale-tax department were verified or not, so, the CIT(A) on considering these points was not justified in deleting the impugned addition without discussing as to whether the liability of trade creditors shown by the assessee in the absence of furnishing complete addresses of trade creditors/consignors and the payment vouchers was genuine or not. While evaluating the material collected by the Revenue on the touch stone on human probability and considering the accretion in the closing bala ..... X X X X Extracts X X X X X X X X Extracts X X X X
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