TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 327
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....ned Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the action of A.O. in rejecting books of accounts u/s 145(3). 2.1 The learned Commissioner of Income Tax (Appeals) has further erred on facts and in law in confirming trading addition of Rs. 10,61,214/- by applying G.P. rate of 17% as against G.P. rate of 12.61% declared by the assessee." 2. Firstly we take C.O. of the assessee. The assessee filed the present C.O. belated by 293 days, for which he also filed a condonation petition to condone the delay alongwith affidavit of Shri Neeraj Lakhi, a partner of M/s Lakhi Gems and Shri Gopal Das Ganglani, employee of M/s Bihari Lal Hola Ram (sister concern) of Lakhi Gems. 3. The ld AR of the assessee argued that this was the mistake of the employee who got received form NO. 36 served on him on 14/07/2012, which was misplaced by Shri Gopal Das Ganglani. Therefore, the assessee has reasonable cause to file the C.O. delayed by 293 days. 4. At the outset, the ld DR opposed the condonation of delay application as claimed by the assessee that this was the mistake of Shri Gopal Das Ganglani. She further argued that even form No. 36 was misplaced in July, 200....
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....d not taken a proper plea to show sufficient cause giving evidence and proof beyond reasonable doubt for the delay. There was no need to interfere with the order of the Tribunal." In this judgment, the Hon'ble Supreme Court citation i.e. Collector, Land Acquisition Vs. Mst. Katiji (1987) 167 ITR 471 (SC) has also been considered. We find merit in the contentions of ld. DR that law helps diligent and not the indolent as well as the axiomatic delay defeats equity. In our considered view that the condonation petition filed by the assessee and material available on the record, fail to invoke any confidence, fail to explain reasonable and sufficient cause for condonation of long delay of 293 days in filing this C.O. The assessee has to come clean with all the relevant facts, which happened in the period of one year. The assessee has to explain all the events and be specific in the dates. In the entirety of facts and circumstances of the case, we decline to condone the delay of 293 days in filing this C.O. 6. Now we are deciding the C.O. on merit. Ground No. 1 of the C.O., the assessee challenged the reopening the case U/s 147 of the Income Tax Act, 1961 (in short the Act). The ld....
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....ate the purchases. Therefore, the assessee's ground may please be dismissed. 8. We have heard the rival contentions of both the parties and perused the material available on the record. In this case, the order U/s 143(1) was passed. There was a reason to believe that the assessee has inflated the purchases by accepting bogus bills from the market on which this case was reopened and quantified additions were made by the Assessing Officer after verification as the Hon'ble Supreme Court in various cases has held that reason to believe does not have certainty that Assessing Officer in each and every case should have made addition but there should be prima facie believe of escapement of income. The finding given by the ld CIT(A) had not controverted by the AR. The subsequent year finding as held in (2012) 343 ITR 188 (Bom) can be reason in reopening wherein ld Assessing Officer had made the addition on account of bogus purchases by rejecting the books of account U/s 145(3) of the Act, which has been confirmed by the ld CIT(A), therefore, we dismiss this ground of appeal. 9. The 2nd ground of C.O. is against challenging the rejection of book U/s 145(3) of the Act. It is submitt....
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....ried out on 18/08/2005. From the various annexures impounded during the course of survey, it is revealed that the firm and its partners were booking bogus purchases from various bill providers. Subsequent to the survey, scrutiny assessments in the case of assessee for the A.Y. 2003- 04, 2005-06 and 2006-07 had been framed by the Assessing Officer wherein finding was given that the assessee has also procured bogus bills. The ld CIT(A) also confirmed the findings. The ld Assessing Officer recorded the reasons U/s 147 of the Act and issued notice U/s 148, which was responded by the assessee. A detailed questionnaire dated 24/10/2011 was issued by the Assessing Officer to the assessee on decline in G.P. as well as bogus purchases made by the assessee. The G.P. rate during the year had come done from 14.75% in preceding year to 12.61% in year under consideration. There was a bogus purchases to the tune of Rs. 1,80,12,079/- from the following parties: S.No. Name of supplier Address of supplier PAN SCT/RST/TIN No. 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 AAMPJ....
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.... 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) From the Dak returned by the postal authorities it is evidenced that the assessees do not exist at the given address. It is evident that these suppliers are mere fake bill providers. iv) The assessee has not maintained any stock register on day to day basis so as to verify the day to day movement of the stock. v) The entire exercise is made with a view to verify the correctness of each of the entries made in the trading account which culminates in the determination of the gross profit. If the correctness of any one entry of the trading account is found to be incorrect, then it will have a bearing on the gross profit declared because it is arrived at by arithmetical calculations. vi) The observations of formalities on paper, like TIN, RCST/CST No./PAN, Bank account are part of the modus operandi to run the racket of issuing bogus ....
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....ed the addition @ 17% on total sale turnover and net addition of Rs. 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 against whom department had gathered information of being entry providers. Thus these purchases could not be verified and the Hon'ble ITAT, Jaipur Bench has consistently held in the case of gems and jewellery trader/manufacturers that unverifiable purchases are sufficient grounds for invoking provisions of section 145(3). Therefore, the rejection of the books of the account of the appellant as unreliable u/s 145(3) is upheld. 5.4 Regarding the estimation of G.P. the Hon'ble ITAT, Jaipur Bench has consistently held that the past history of the assessee is the most reliable guide. In the case of the assessee it is seen in the A.Y. 2003-04, the assessee had shown a G.P. rate of 14.75% on total turnover of Rs. 1,53,91,516/-. In A.Y. 2005-06, the Hon'ble ITAT upheld the G.P. of 16.16% on total turnover of Rs. 2,55,00,660/-. During this assessment year, it ....