2015 (6) TMI 1087

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....ion to Rs. 13,69,762/- made by the A.O. by disallowing @ 25% unverifiable purchases of Rs. 57,48,691/- though the rejection of books of accounts U/s 145(3) of the I.T. Act, 1961 was upheld. 2. Reducing the addition keeping in view the decision of ld. CIT(A) in the case of M/s Nand Kishore Meghraj in ITA No. 433/JP/2009 and confirmed by Hon'ble ITAT, Jaipur Bench, Jaipur." 2. Both the grounds of appeal are interlinked and against reducing the trading addition of Rs. 13,69,762/- made by the A.O. by disallowing @ 25% unverifiable purchases of Rs. 57,48,691/- though the rejection of books of accounts U/s 145(3) of the IT Act, 1961 was upheld. The ld Assessing Officer observed that the assessee is running a proprietory concern M/s Pi....

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....und that no such concern exist on the given address. The above parties were only giving accommodation entries and not doing any genuine sale purchase of the gems & jewels. The assessee was asked to produce the above parties alongwith books of account in order to prove the genuineness of transaction. In response to this, the assessee submitted its reply, which was not found convincing and acceptable by the ld Assessing Officer. He relied on the various case laws i.e.: (a) M/s Indian Woolen Carpet Factory Vs. ITAT & ORs.(2002) 178 CTR 420 (Raj) and M.P. High Court in the case of VISP (P) Ltd. Vs. CIT 186 CTR 718 (MP) (b) CIT Vs. Precision Finance P Ltd. 208 ITR 465 (Cal). (c) CIT Vs. Golcha Prop Pvt. Ltd. 227 ITR 39....

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....g the year the appellant has sown purchases from 8 parties that were found to be non-existent as business entities. Thus, these purchases remained unproved. The Hon'ble ITAT Jaipur Bench has consistently held unverifiable purchases in the case of gem stone traders to be a sufficient justification for rejection of books of accounts u/s 145(3). Therefore, the decision of the A.O. to reject the books of account by invoking provisions of Sec. 145(3) is upheld. Regarding estimation of income, I concur with the submissions of the A.R. regarding past history being the best guide for estimating the income. Reliance is placed on the case of Gotan Lime Khanij Udhyog 256 ITR 243 (Raj.). The appellant has shown a G.P. of 6.53% in A.Y. 2005-06, 5.91% in....