TaxTMI 
TaxTMI 
2017 (7) TMI 1137
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.... in deleting the addition of Rs. 55,77,999/- made by the Assessing Officer on account of GP rate of 0.2% of total turnover of Rs. 278,89,99,500/- as against a GP rate at 0.01% which appears to be at lower side, since the assessee was making total sales in cash and no details of parties to whom sales were made furnished and the profit shown by the assessee was not verifiable." 4. From the above ground, it is gathered that only grievance of the department relates to the deletion of addition of Rs. 55,77,999/- made by the AO by enhancing the GP rate. 5. Facts of the case in brief are that the assessee is a proprietor of M/s Vasudeva Jewellers, Jaipur. A search and seizure operation u/s 132(1) of the Income Tax Act, 1961 (hereinafter referred to as the Act) was conducted at the residential premises as well as the business premises of the assessee and his group concerns/companies/family members on 28.03.2011. The AO issued notice u/s 153A of the Act on 01.02.2012. The assessee filed the return of income on 04.12.2012 declaring an income of Rs. 4,79,044/-. During the course of assessment proceedings, the AO noticed that as per the documents seized during the course of search, there....
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....furnished by the assessee shows that the assessee group has deposited cash in - various bank account during Assessment Year 2005-06 to 2011-12. ii) The assessee has furnished details regarding purchase of gold from bank/MMTC and other details in support of opening stock, sales, closing stock and cash deposits in bank accounts. iii) The assessee has filed copy of VAT return in support of sales made during the Assessment Year 2005-06 to 2011-12." 7. The AO also observed that the assessee had adopted the modus operandi for bullion trading as under: "i) The assessee purchases the gold from government agencies like, MMTC, and Banks authorized to sell gold bars through the banking channels; ii) The bullions bars (in denomination of 1 kg or 2 kg) are sold to the customers in cash through the cash vouchers; iii) This cash is deposited in the bank account of the assessee and is either transferred to other bank account for purchase of gold from that bank or pay order is made in favor of MMTC/Bank." 8. The AO in order to ascertain the actual profit earned in the above said transaction, asked the assessee to furnish the details of date wise pu....
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....orresponding transactions of purchases and sales recorded in books are identifiable, confirmed and liability due to them/due from them is ascertained; 6. The documents found during search were duly explained. In this connection reference be drawn to reconciliation in the matter submitted from time to time as well as similar matter raised in other group cases. (f) at this stage, it is important to mention that we have already placed on record the purchase bills, VAT Returns, bank statement alongwith detailed workings depicting stock situation on every sale etc which are sufficient to substantiate the figures of purchases, sales etc. as appearing in the audited accounts of the company. Sales executed during the year. Prior we proceed to explain the sales executed, we take this opportunity to draw your kind attention to various factors affecting sales and peculiarities of business dealt by us. Peculiarities of business and trade (a) wholesale market vs. retail trade it is no secret that the kind of trading i.e. wholesale or retail has a telling effect on impact of profitability. In wholesale market the emphasis is on bulk sales at lower rates contra....
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....rved that the sales made by the assessee were at lesser price than the market rate on the respective dates on various occasions and that the reasons for difference in sale rate as well as market rate had not been found convincing as the assessee was making all the sales in cash. He further observed that date and timing of sale of gold could not have been said with certainty and the price of sale considered by the assessee in the cash vouchers could not be verified in the absence of details of buyers and the cash vouchers. He further observed that during the period under consideration the prices of gold were in upward movement and any stock would have yielded good returns. Hence, the sale prices of the gold adopted by the assessee appear to have been manipulated and did not reflect the true profits. The AO observed that the assessee had done total turnover of Rs. 278,89,99,500/- and shown net profit of Rs. 3,00,489/- only. The AO also observed that the assessee had shown a GP rate at 0.001% which appears to be at lower side. He further observed that the GP rate in group cases of the assessee were not constant. The AO to cover up the leakage, made the addition by adopting the GP rate....
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....), New Delhi (2015) 7 TMI 207 (ITAT Del.) • ITO, Ward-4(5), New Delhi Vs Sh. Mahesh Chand Sharma (2015) 5 TMI 846 (ITAT Del.) • A.P. Processors, Delhi and Others Vs ACIT, Circle- 30(1), New Delhi and Others (2015) 7 TMI 847 (ITAT Del.) • ACIT Vs Sh. Vijay Kumar Aggarwal (2013) 7 TMI 41 (ITAT Del.) 15. It was further submitted that the order of the ld. CIT(A) in the case of M/s Vasudeva Jewellers Pvt. Ltd. was challenged by the department before the ITAT Delhi Bench 'SMC-III', New Delhi in ITA No. 4245/Del/2014 which has been dismissed vide order dated 12.07.2016. 16. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the AO accepted the opening stock, purchases, closing stock and cash deposits in the bank accounts which were recorded by the assessee in his books of accounts maintained in the regular course of business. The AO doubted the value of the sale for the reason that the date and timing of sale of gold could not have been said with certainty and that the price of sale considered by the assessee in the cash voucher could no....
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.... and the assessment framed under Section 153A/143(3) are in violation of the statutory conditions of the Act and the procedure prescribed under the law and as such the same is bad in the eye of law and liable to be quashed. 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the proceedings initiated under Section 153A are bad in law in the absence of any incriminating material belonging to the assessee being found during the search. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the assessment framed by the AO is against the spirit of section 153A of the Act whereby the reassessment has to be confined to the additions and disallowances consequent to the material found and does not give power to the AO to reappraise and review the completed assessments. 5(i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the addition of Rs. 41,03,460/- and Rs. 2,27,100/- made by the AO on the basis of seized do....
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.... place to discuss their problems. The captioned documents appear to be left over by some persons. As per the knowledge and belief of the undersigned, most probably, these transactions pertain to Mr. Laxman Chauhan who kept on visiting assessee's place due to his business relation with the assessee. Though currently the assessee is not in touch with the said person, however, his last available address is W-87, Anupam Garden, Sainik Farms, New Delhi. In case, your goodself so desire, you are requested to kindly make the independent inquiry directly from the concerned person." 21. The AO was not satisfied from the reply of the assessee and observed that the assessee had neither discharged his onus by satisfactorily explaining the transaction appearing in documents nor offered any information or material evidence. He, therefore, made the addition of Rs. 41,03,460/- in the hands of the assessee. The AO also noticed that the documents marked as page 77 of Annexure A-1 found and seized during the course of search operation from the residential premises of the assessee, revealed that the transaction of cash payment was before 31.03.2004, but there were some calculation of interest o....
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....en able to provide any valid explanation for the contents of the seized documents. He has not been able to prove that the document did not belong to the appellant. The AO has rightly added the amounts including the interest mentioned in the seized documents. The arguments of the AR that the documents do not belong to the appellant are without any substance. Mere submission of the name and address of some person to be the probable owner of the documents does not discharge him of the burden of rebutting the presumption contained in section 132(4A) of the Act, 1961. Therefore I have no hesitation to upholding the addition made by the AO. The ground on the issue is therefore rejected. 24. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that in the documents relied by the AO, certain accounts with certain entries were mentioned, a reference was made to page no. 34 of the assessee's paper book which contained the details of repayment of loan of State Bank of Mysore and amount paid to Mr. Malik for purchase of property. It was further submitted that in answer to a query raised by the AO, ....
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....redit Society Ltd. (2013) 12 TMI 237 (ITAT Nag) • ACIT Vs Sri B. Srinivasa Rao, M/s Prathima Educational (2013) 11 TMI 826 (ITAT Hyd) • DCIT, CC-2 Vs M/s Rising Buildestate Pvt. Ltd. (2012) 9 TMI 252 (ITAT Jaipur) • ACIT Vs Shri OP Bhalla (2012) 7 TMI 584 (ITAT Del.) • CIT Vs Girish Chaudhary (2008) 296 ITR 619 (Del.) 26. In his rival submissions the ld. DR strongly supported the orders of the authorities below and reiterated the observations made in the said orders. It was further submitted that the documents were found from the residential premises of the assessee and no satisfactory explanation was given. Therefore, the addition was rightly made by the AO and the ld. CIT(A) was fully justified in sustaining the same. 27. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the addition has been made by the AO on the basis of the documents found during the course of search. The AO made the impugned addition for the reason that there were deposits in the bank account as mentioned at page 76 to 78 of Annexure A-1 found ....
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.... and the assessee has no link with those repayments. As such the addition made by the AO and sustained by the ld. CIT(A) in the hands of the assessee was not justified, particularly when the entries mentioned in the said documents belonged to Mr. Ram Chauhan, accordingly the same is deleted. 28. As regards to the another addition of Rs. 2,27,000/- alleged to be interest on the advances, it is noticed that nothing is brought on record that the assessee earned the interest or the advances were made by the assessee. Therefore, the said addition was not justified, particularly when it was not proved that the assessee had given the advances mentioned at page nos. 76 to 78 of Annexure A-1. In that view of the matter, we do not see any justification on the part of the AO in making the addition in the hands of the assessee and the ld. CIT(A) without appreciating the facts in right perspective was not justified in sustaining the addition made by the AO. Accordingly, the same is deleted. 29. For the assessment years 2006-07 and 2007-08, similar additions have been made. Therefore, our findings given in respect of assessment year 2005-06 shall apply with the same force for those assessm....
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.... was sated that this payment made by Mrs. Kumkum Kanodia had been duly accounted for in her record. In support of the above contention, copy of ledger account of Haryana Aukaf Board in the books of Mrs. Kumkum Kanodia was also furnished. It was further stated that Mrs. Kumkum Kanodia was assessed to income tax and she was also subjected to search. The assessee furnished the copies of Income Tax Returns and the computation of income in the case of Mrs. Kumkum Kanodia and stated that the documents found at the premises which pertained to both the assessee and Mrs. Kumkum Kanodia who had given an explanation alongwith the evidences in support thereof which the AO rejected arbitrarily. Therefore, the addition made by the AO was not sustainable. The reliance was placed on the following case laws: • CIT Vs Ved Prakash Chaudhary (2008) 305 ITR 245 (Del.) • CIT Vs S.M.S. Investment Corporation (P) Ltd. (1994) 207 ITR 364 (Raj.) • CIT Vs Raj Pal Singh Ram Avtar (2007) 288 ITR 498 (Ald.) 35. The ld. CIT(A), however, did not find merit in the submissions of the assessee and confirmed the addition by observing in paras 4.4.3 and 4.4.4. of the impugned ....
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.... of the authorities below and reiterated the observations made by the ld. CIT(A) in para 4.4.3 of the impugned order. It was further submitted that the evidences produced by the assessee were not adequate, therefore, the addition made by the AO and sustained by the ld. CIT(A) was justified. 38. We have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is not in dispute that the impugned addition has been made by the AO on the basis of document A-1 page 7 found during the course of search. In the said document certain entries were mentioned, there were four entries of Rs. 1,75,000/- each paid through cheques. The AO accepted the said i.e. the payments made by the assessee, Ms. Nitika Kanodia, Sh. Rajesh Kumar Kanodia and Mrs. Kumkum Kanodia. There were two more entries reflecting the payment in cash i.e. Rs. 4,00,000/- on 01.03.2007 and Rs. 7,00,000/- on 31.03.2007. The AO considered those entries as unexplained payments made by the assessee. The explanation of the assessee was that those payments were made by Mrs. Kumkum Kanodia to Haryana Aukaf Board which was also evident from page no. 137 of....