TaxTMI 
TaxTMI 
2015 (11) TMI 1280
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....ent to the persons covered by Section 40(A)(2)(b), which was made after recording cogent reasons." 2. The first ground of the revenue's appeal is against reducing the trading addition of Rs. 5,60,827/- even after upholding the rejection of books U/s 145(3) of the Income Tax Act, 1961 (hereinafter referred as the Act). The assessee firm is engaged in the business of manufacturing and trading of gold and silver ornaments. The assessee filed return of income on 31/10/2008 declaring total income of Rs. 13,09,040/-. The case was scrutinized U/s 143(3) of the Act. The assessee has produced books of account and details as desired by the Assessing Officer, which was examined by him. The ld. Assessing Officer has observed as under:- 1. Assessee has shown purchase of Rs. 2,25,38,086/- from URD (unregistered dealers) out of total purchase of Rs. 4,47,89,444/-. Such URD purchase is not having proper bills, only self made vouchers are available. PAN, address of such sellers is also not available. 2. Quantitative & qualitative stock of diamond & precious stones are not maintained. 3. Assessee following LIFO method which is not acceptable as per accounting standard. ....
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....profit of the assessee was to be estimated, however, this estimation should have the basis which is fair and scientific. One such basis for estimation of profit can be trading results shown by the assessee in the preceding year. However, past history of the case has been that of rejection of books of account, thereby cannot be adopted as basis for estimation. Considering the facts and circumstances of the case as mentioned above by the Assessing Officer, he applied G.P. rate @ 14% against the declared G.P. rate of 13.20%. Thus he made addition of Rs. 5,60,827/- in the income of the assessee. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal by observing as under:- "The first to fourth grounds of appeal are against the trading addition of Rs. 5,60,827/- made by invoking the provisions of Section 145(3) and holding that in respect of URD purchases they are not supported by proper bills. This ground of appeal are squarely covered in favour of the appellant by virtue of the order of the Hon'ble ITAT, Jaipur Bench, Jaipur in Appeal No. 426/JP/2009, ITA No. 375/JP/2010 & ITA No. 627/JP/20....
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....f years and no addition had been made by the ld Assessing Officer in past on this ground and same has been followed by the assessee consistently. The Coordinate Bench had already considered the identical facts and circumstances of the case in assessee's own case in A.Y. 2006-07 and 2007-08 and dismissed the revenue's appeal. Therefore, we find no reason to intervene in the order of the ld CIT(A), accordingly, which is upheld. 7. The second ground of the revenue's appeal is against deleting the disallowance of interest or Rs. 9000/-. The ld Assessing Officer observed that the assessee had provided interest free advance to Shri Satish Kumar Khandaka at Rs. 3 lacs. The assessee firm has taken secured and unsecured loan and claimed interest expenses on it. The ld Assessing Officer gave reasonable opportunity of being heard on this issue, which has availed by the assessee. As per Assessing Officer, the assessee could not explain satisfactorily the reason that why it had not charged interest on the advances of Rs. 3 lacs after relying on various cases of Hon'ble High Court. He disallowed 12% interest on day to day basis and addition of Rs. 9 lacs was made, which was deleted by the....
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....ssing Officer, the assessee carried the matter before the ld CIT(A), who had allowed the appeal by observing as under:- "The sixty ground of appeal are against the addition of Rs. 7,68,872/- U/s 40(A)(2)(b). This ground of appeal are squarely covered in favour of the appellant by virtue of the order of Hon'ble ITAT, Jaipur Bench, Jaipur in Appeal No. 426/JP/2009, ITA No. 375/JP/2010 and ITA No. 627/JP/2010 dated 30/09/2010 in the appellant's own case for A.Y. 2006-07 and 2007-08 wherein similar additions was deleted. There being no change in the material facts and the legal position. This disallowance is deleted on the basis of the said order of the Hon'ble ITAT, Jaipur. The appellant succeeds on this ground." 12. Now the revenue is in appeal before us. The ld DR has vehemently supported the order of the Assessing Officer. At the outset, the ld AR of the assessee has submitted that the burden U/s 40(A)(2)(b) of the Act is on the revenue to prove that expenditure incurred by the assessee is not reasonable for which he relied on the decision of Hon'ble ITAT, Jaipur Bench in the case of ITO Vs. Vimal Kumar Jain reported in XXXVII Tax World 63 and in the case of Goverdhan P....