2017 (12) TMI 1252

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....d confirmed by the Hon'ble ITAT, Jaipur Bench, Jaipur. ii) relying on past history of the case in spite of the fact that during the year under consideration most of the purchases of the assessee were from persons/ concerns issuing bills without delivery of goods." 2. The assessee is a partnership firm and engaged in the business precious and semi previous stones and silver and gold Jewellery. While completing the assessment for the A.Ys. in question the AO found that the assessee has not maintained stock register and as per the audit report the inventory of closing stock has been valued on estimate basis. The AO further noted that the assessee made purchases from 45 parties which are found to be entry providers for the purpose of issuing bills without actual sales. The AO has made reference to the facts found during the search and survey conducted by the Department on those entrys provider parties. The AO issued summons to these parties but returned un-served and un-complied with. Accordingly the Assessing Officer rejected the books of accounts of the assessee by invoking the provisions of section 143(3) on the ground that the assessee has failed to produce the suppliers in pe....

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....igh Court in case of N.K. Industries vs. DCIT 72 tamann.com 289/ 142 DTR 962 and the Hon'ble Supreme Court has dismissed the SLP filed against the decision of the Hon'ble Gujarat High Court, therefore, the same has attained the finality. 4. On the other hand, the ld. AR of the assessee has submitted that an identical issue was considered by this Tribunal in assessee's own case for the assessment year 2006-07 vide order dated 10.06.2001 in ITA No. 603 of 2010 wherein though the Tribunal has upheld the rejection of books of accounts u/s 145(3) however, the GP rate addition made by the ld. CIT(A) was also upheld by the Tribunal. The ld. AR has further contended that the Hon'ble jurisdiction High Court in case of CIT vs. Amrapali Jewells (P) Ltd. 65 DTR 196 has upheld the order of this Tribunal whereby the GP rate addition made by the Taxing Authorities was deleted. He has also relied upon the decision dated 15.03.2012 of the Coordinate Benches of this Tribunal in case of M/s Swarnganga Jewellers vs. ACIT ITA No. 833/JP/2011. 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 provisio....

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....editors shown in the balance-sheet, the assessee is definitely required to prima facie prove the identity of the trade creditors as well as the genuineness of the transaction. In this case, admittedly the assessee has neither been able to disclose the complete addresses of the trade creditors nor is able to give the complete addresses of the consignors nor the name has been mentioned on the challan forms, so the verification of the same by the Assessing Officer became totally impracticable 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 Rs. 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 ....

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....t history. Hence, the grounds raised in the Revenue appeals are rejected being without any substance or merits. 6. In the cross objection of the assessee has raised the common grounds is as under:- "1. In the facts and circumstances of the case and in law the ld CIT(A) has erred in confirming the action of the ld. AO in confirming the trading addition of Rs. 11.54 out of the total addition of Rs. 96,69,746/- made by the ld. AO. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the rejection of books and deleting the trading addition of Rs. 11.54/-. 2. The assessee craves its rights to add, amend or alter any of t he grounds on or before the hearing." 7. The assessee has challenged the order of the ld. CIT(A) in confirming the addition to the extent of GP rate. 8. We have heard the ld. AR as well as ld. DR and considered the relevant material on record. We find that the assessee failed to substantiate the purchases recorded in the books of accounts and to that extent the purchases were not verifiable. The Assessing officer has also pointed that the inventory of closing stock has been v....