AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (8) TMI 1163
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....is justified in:- i) Granting relief of Rs. 10,37,461/- on account of trading addition made by the A.O. ii) Deleting the disallowance of Rs. 68,081/- made on account of ad-hoc expenses made by the A.O. Ground in Assessee's C.O. "1. Under the facts and circumstances of the case the ld CIT(A)-I, Jaipur went wrong in partly confirming the trading addition of Rs. 5,71,521/- out of Rs. 16,08,982/- by taking G.P. rate of 13.00% on sales of Rs. 3,45,82,025/- as against 11.34% (amounting to Rs. 39,24,685/-) declared by the assessee for the assessment year under appeal." 2. The assessee has earned income from rent and export of silver, gems and jewellery. The assessee filed return for the year under consideration on 29/09/2008 at Rs. 1,18,....
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....008. Proprietor of M/s handicrafts Enterprises namely Shri Lalit Gupta had admitted that they have provided bogus bills to M/s Bharti Export, 11 Film Colony, Jaipur (proprietory concern of assessee) by charging 4% commission on bogus bill amount. Both the concerns were not doing any gems jewellery business in reality but were providing the bogus bills to inflate the cost of purchases. The assessee was not able to produce these parties for verification before the Assessing Officer. The ld Assessing Officer issued notice U/s 133(6) of the Act and Ward Inspector was directed to serve notice and collected the required information from them but the Inspector submitted his report on 3/12/2010 and informed the Assessing Officer that there is no in....
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....for invoking the provisions of Section 145(3). Therefore, the decision of the A.O. to reject the books of accounts of the assessee by invoking provisions of Section 145(3) is upheld. Regarding the estimation of income, it has consistently been held by the Hon'ble ITAT Jaipur Bench that the past history of the case is the best guide for estimating the G.P. rate of the assessee in such cases. In A.Y. 2007-08 the Hon'ble ITAT Bench Jaipur had confirmed a GP rate of Rs. 7.5% on total turnover of Rs. 4,49,53,113.78/- in the case of the appellant. During this A.Y. the turnover has declined to Rs. 3,45,82,024.64/-. It is a well accepted fact that the G.P. rate improves with the decline in turnover. Moreover to cover the loss of revenue on accoun....
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....e turnover is 100% Export turnover. Despite of a decline of almost 25% in turnover the assessee has shown better trading results. As such it was urged that the accounts of the assessee need not be rejected by invoking provisions of Section 145(3). 5. Further submitted humbly that as the declared trading results are better than the trading results of last year as such the decision of Hon'ble Jaipur Bench of ITAT in assessee's own case following CIT Vs. Gotan Lime Khanij Udhyog (2002) 256 ITR 243 (Raj.) needs to be followed. 6. Even otherwise the G.P. rate of 11.34% shown in the current years was better than the G.P. rate of 7.45% shown in the immediate preceding year as well as 7.26% shown in the year before. As held in various courts th....
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....out confronting the material, on which reliance was placed by the A.O. no adverse inference can be drawn against the assessee. 11. As such the assessee request that in the light of facts and circumstances of the case and particularly considering the previous history of the assessee it is requested that the accounts of the assessee need not be rejected as they reflected true and correct view of the state of affairs of the assessee and it is therefore humbly prayed that the addition may kindly be deleted in full." 5. We have heard the rival contentions of both the parties and perused the material available on the record. This Bench has already decided identical issue in the case of Shri Anuj Kumar Varshney Vs. ITO & others gems and jewelle....
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....ing as under:- "I have carefully perused the order of the A.O. and the submissions of the AR and find that the A.O. has not brought on record any evidence or finding that the expenses claimed under these heads were bogus, inflated or were for non business purpose. Moreover depreciation is a statutory allowance as per the finding of ITAT Jaipur Bench in the case of Triveni Pharma. Given the nature of petty expenditure under these heads, it is not surprising that the payments were made in cash, therefore, an ad hoc disallowance of 20% on these expenses is not sustainable and the addition of Rs. 68,081/- is deleted." 8. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer and reiterat....