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2024 (10) TMI 351
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....ith the agreement of both the parties and are being disposed off by this consolidated order. 3. In this case the registry pointed out that the appeal in these bunch of cases are delayed by 13 days. At the time of hearing of the appeal the ld. AR of the assessee submitted that though the order of the ld. CIT(A) is dated 24.01.2024, but the impugned orders were served on the assessee by speed post by on 15.02.2024 and if that fact is considered there is no delay as such. 3.1 The ld. DR representing the revenue did not raise any objection to the factual aspect of the matter. 3.2 We have considered the facts of the case that the date of communication of the order is not under dispute and the same is 15.02.2024 if that is considered then there is no delay as such and thus all these appeals are admitted for disposal on its merits. 4. The Grounds taken by the assessee in each appeal are as under: - (i) AY 1998-99 (ITA No. 429/JPR/2024), 1. On the facts and in the circumstances of the case and in law the assessment order passed by Ld. Assessing Officer on 31.10.2018 is bad in law, void-ab-initio, and deserves to be annulled for various reasons including follow....
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....s made by the assessee is not genuine, therefore, in view of various judgement of including latest Judgment of Hon'ble Supreme Court in the case of PCIT Central-3 V/s Abhisar Buildwell Private Limited 2023 (4) TMI) 1056 no addition can be made in respect of completed assessment in absence of any incriminating material. (ii) The assessment order was passed without complying the provisions of section 153D of the Act. (iii) That the order of the ld. Assessing Officer is arbitrary, whimsical, capricious, perverse and against the law and facts of the case. The CIT (A) erred in not annulling the assessment order and also not deleting the additions so made in toto. 2 On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in confirming the action of Ld. A.O. of rejecting the books of accounts by applying the provisions of section 145(3) of Income Tax Act, 1961. 3 On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in (i) holding that there is no evidence that business of trading in precious and semi-precious conducted by M/s Tirupati Balaji Gems and further erred in holding that Shri Lallu....
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....red in (i) holding that there is no evidence that business of trading in precious and semi-precious conducted by M/s Vinayak Overseas solely on the statement of Shri Mohan Prakash Sharma, (ii) holding that the purchases of Rs. 3,56,250/- is unverifiable and under invoiced to show more profit to claim the deduction u/s 80HHC, (iii) confirming the addition of Rs. 3,56,250/- being 25% of purchases of Rs. 14,25,000/- (iv) directing to tax the same as income from other sources and (iv) holding that assessee paid 25% of doubtful purchases through undisclosed cash/undisclosed source. 4 The appellant prays for leave to Add, to amend, to delete, or modify the all or any grounds of appeal on or before the hearing of appeal. (iv) AY 2001-2002 (ITA No. 432/JPR/2024) 1. On the facts and in the circumstances of the case and in law the assessment order passed by Ld. Assessing Officer on 31.10.2018 is bad in law, void-ab-initio, and deserves to be annulled for various reasons including following: - (i) During the course of search over the assessee no incriminating material of whatsoever nature was found from the premises of the assessee to prove that the purchas....
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.... ld. Assessing Officer is arbitrary, whimsical, capricious, perverse and against the law and facts of the case. The CIT (A) erred in not annulling the assessment order and also not deleting the additions so made in toto. 2 On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in confirming the action of Ld. A.O. of rejecting the books of accounts by applying the provisions of section 145(3) of Income Tax Act, 1961. 3 On the facts and in the circumstances of the case and in law the Ld. CIT(A) erred in (i) holding that proprietor/directors of M/s Shruti Gems & M/s Naman Gems private Limited were dummy proprietor/director and these firms had involved in supplying bogus bills and the finding is solely based on the self-serving statements/affidavits of proprietor/director of respective concern which is contrary to the findings of facts as held by Hon'ble ITAT Jaipur Bench in the case of Shri Umesh Saboo prop of Shruti Gems and in the case of M/s Naman Gems Pvt Ltd (ii) holding that the purchases to tune of Rs. 15,28,323/-, made from above named concerns, is unverifiable and under invoiced to show more profit to claim the deduction u....
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....2001 0 60,57,063 2001-2002 13,15,817 47,44,200 2003-2004 35,82,887 1,31,02,491 The issue taken up for all these years are on similar contention holding that the purchases made by the assessee are tainted / bogus / unverifiable. The details of the amount considered as tainted or bogus with respect to the each of the parties considered in each of the year is also tabulated here in below : Astt Year Purchases held by AO in original Assessment proceedings as bogus/unverifiable 1998-1999 a) Shree Nath Impex Rs. 2,77,128/- b) From various unregistered dealers Rs. 2,78,552/- 1999-2000 M/s Tirupati Balaji Gems Rs. 2,61,387/- 2000-2001 a) M/s Meena Gems Rs. 16,55,104/- b) M/s Vinayak Overseas. Rs. 14,25,000 2001-2002 a) M/s Ganpati Export, Rs. 5,25,000/- b) M/s Arham Gems, Rs. 7,29,375/- c) M/s S.V. Enterprises, Rs. 14,20,290/- and Rs. 5,81,360/- d) M/s Agarwal Gems Centre, Rs. 4,21,800/-and e) M/s Vinayak Overseas. Rs. 2,19,834 2003-04 a) M/s Shruti Gems Rs. 47,87,521/- b) M/s Naman Gems Pvt Ltd Rs. 13,25,792/ c) Real Gems INC Rs. 7,15,465/- d) Bright Gems Rs, 2,42,500/- While making the addition f....
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....AO 5,38,911 60,57,063 1,31,02,491 First appellate proceeding / First round of litigation 9. The assessee challenged the finding of the ld. AO for all these years before the ld. CIT(A). While dealing with these appeals of the assessee he confirmed the action of the ld. AO in rejecting the books of accounts of the assessee. But at the same time, he holds that the export sales made by the assessee cannot be considered as not genuine. In that appeal finding the ld. CIT(A) considered the purchases of the parties listed in the table herein below are not verifiable and held that the genuineness of purchases made from other then these parties cannot be doubted as there is nothing incriminating against such parties in the assessment order. Then CIT (A) confirmed the addition of income being 25% of unverifiable purchases treating the same made to inflate the export profit and directed to treat the same as Income from other sources. This impacted to the addition in total income of the assessee resulted the following figures : Astt Year Purchases held by AO in original Assessment proceedings as bogus/unverifiable Amount of unverifiable purchases (Rs.) Addition confir....
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.... 65,347/- sustained by CIT (A) in this regard while allowing objection No. 1 & 2 of the cross objection preferred by the assessee and reject the grounds of appeal preferred by the revenue as not maintainable." For AY 2000-2001 para 20 at Page 22 of its order dated 30.05.2008 "Under these circumstances, we are of the view that the A.O. was not justified in doubting the correctness of claimed purchases made from M/s Vinayak Overseas and M/s Meena Gems and export of the said goods and in invoking the provisions of section 145(3) of the Act to estimate the income of the assessee. Under these circumstances, we while setting aside the adverse finding of the lower authorities against the genuineness of the claimed purchases and exports direct the A.O. To delete the addition of Rs. 3,56,250/- sustained by the Ld. CIT (A). The grounds of the appeal preferred by the department are thus rejected and objection Nos. 1 &2 of the cross objection are allowed." For AY 2001-2002 para 22-24 at Page 27 of its order dated 30.05.2008 "We are of the view that when the assessee has discharged its initial burden by furnishing the necessary information supported with evid....
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....anded matter back to the file of the ld. Assessing Officer. The relevant finding of the jurisdictional high court is reproduced here in below for the sake of brevity: "3. Counsel for the appellant contended that the issue is squarely covered by the decision of this court in the case of Commissioner of Income Tax, Jaipur-I, New Central Revenue Building, Statute Circle, Jaipur Vs. M/s. Gems Paradise, Gulab Niwas, M. I. Road, Jaipur in D. B. Income Tax Appeal no. 201/2010 decided on 2nd November, which reads as under: 3. Considering the law declared by the Supreme Court in the case of Vijay Proteins Ltd. Vs. Commissioner of Income Tax, Special leave to Appeal (C) No. 8956/2015 decided on 06.04.2015 whereby the supreme court has dismissed the SLP and confirmed the order dated 09.12.2014 passed by the Gujrat High Court and other decisions of the High Court of Gujarat in the case of Sanjay Oilcake Industries Vs Commissioner of Income Tax (2009) 316 ITR 274 (Guj) and N. K. Industries Ltd Vs Dy. C.I.T. Tax Appeal No. 240/2003 decided on 20.06.2016, the parties are bound by the principal of law pronounced in the aforesaid three judgement. 4. We remit back the case....
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....the present proceedings being arising the set aside proceedings as per the directions, no fresh ground can be raised which is not emanating from the/in consequence to the directions of the Hon'ble High Court. 2. The requirement of 153D of the Act did not comply i.e. the approval of Joint Commissioner was not obtained Decided against the assessee The CIT (A) held that it cannot be presumed that the approval was not granted or not obtained merely on the basis that there is no express mention of the same in the assessment order. It is not the case of the appellant that inquiries were done from the assessing officer and as per the information provided it was found that whether the approval was obtained or not. The issue has been raised in the ground of Appeal without exact factual basis for the same and is based on the inference only. The CIT (A) further held that the present proceedings being arising the set aside proceedings as per the directions, no fresh ground can be raised which is not emanating from the/in consequence to the directions of the Hon'ble High Court. 2. Genuineness of Export Sales Decided in favour of assessee The CIT (A) held that export of t....
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....peal memos filed for each year. The ld. AR of the assessee filed separate submission and paper book for each of the year disputed repeating the facts of the first round of appeal and the finding of the ld. CIT(A) in the second round of litigation. Since the dispute is similar for all these years the same is decided all together based on the ground disputed in each year. 15. Ground no. 1 raised by the assessee in A. Y. 1998-99 to 2001-2002 and A. Y. 2003-04 challenges the validity of the assessment orders and the additions made therein. In support of the arguments the ld. AR of the assessee submitted that for AY 1998-99 to AY 2001-02 no addition can be made in completed assessment without any incriminating material relying on decision of Hon'ble Supreme Court in the case of PCIT Central-3 V/s Abhisar Buildwell Private Limited [149 Taxmann. 399 (SC)]. He submitted that it is admitted fact that the department has carried out search operations over the assessee and has not discovered any incriminating material in possession of the assessee, to support that it had made bogus purchase bills or inflated export profit or export profit of the assessee is not genuine. He submitted that re....
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....The assessment order can be passed only after the receipt of such approval. The fact that such approval has been obtained should also be mentioned in the body of the assessment order itself." 16. Thus, the requirement of prior approval under Section 153D of the Act is comparable with a similar requirement under Section 158BG of the Act. The only difference being that the latter provision occurs in Chapter-XIV-B relating to "special procedure for assessment of search cases" whereas Section 153D is part of Chapter-XIV. A plain reading of Section 153D itself makes it abundantly clear that the legislative intent was to obtain "prior approval" by the ld. AO when he is below the rank of a Joint Commissioner, before he passes an assessment order or reassessment order under Section 153A(1)(b) or 153B(2)(b) of the Act. Ld. AR of the assessee relied upon the decision of Hon'ble Orissa High Court in the case of ACIT, Circle- 1 (2) Vs. Serajuddin and Co. In para 23 of the order of Hon'ble Orissa High Court held that:- 23. In the present case, it is an admitted position that the assessment orders are totally silent about the AO having written to the Additional CIT seeking h....
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....nly. 21. We have heard the rival contentions and perused the material available on record. The bench noted that in this case the Hon'ble jurisdictional while allowing the appeal of the revenue set aside the assessment to be done a fresh. While doing so the Hon'ble High Court has followed the finding so given in the case of M/s. Gems Paradise in DB IT no. 201/2010 directing the assessing officer to verify the transactions are genuine or not. The bench noted that in that set aside proceeding the ld. AO did not verify the issue which was set aside by the High Court and the same addition which was done in the first round of litigation was done. Even the ld. CIT(A) also given the same finding that was recorded in the earlier order issued in the first round. 22. Ground No 2 raised by the assessee for the A.Y. 1998-99, A.Y. 1999- 2000, A.Y. 2000-01, A.Y. 2001-2002 and A.Y. 2003-04 is as regard the rejection of books of account. The ld. AR of the assessee submitted that the lower authorities have not made any findings as regard that the accounts are incomplete or not correct or the assessee is not following the proper method of accounting regularly or not following the accounting sta....
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....e correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) has not been regularly followed by the assessee, or income has not been computed in accordance with the standards notified under sub-section (2), the Assessing Officer may make an assessment in the manner provided in section 144. 25. As it is evident that the provision of section 145(3) can be invoked in the following circumstances: * When the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee. * When the method of accounting provided in Section 145 (1) has not been regularly followed by the assessee. * When the accounting standards notified under Section 145 (2) have not been regularly followed by the assessee. 26. From the observations recorded in the order of the lower authority none of the condition is satisfied and same is also not evident from the finding of the lower authority. Not only that the bench also observed that when the provision of section 145(3) is to be invoked the assessment is to be completed as per the manner provided in section 144 of the Act and the ....
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.... AY 2001-2002 a) M/s Ganpati Exports Rs. 5,25,000/- b) M/s Vinayak Overseas. Rs. 2,19,834/- 7,44,834/- 1,86,209/- AY 2003-2004 a) M/s Shruti Gems Rs. 47,87,521/- b) M/s Naman Gems Pvt Ltd Rs. 13,25,792/ 61,13,313/- 15,28,328/- 28. While dealing with ground no 3 the ld. AR of the assessee vehemently argued the assessee has submitted the quantitative details of purchases and sales. The assessee also showed the nexus of export with purchases. He stated that the very basis of doubting the purchase made from Shri Mahesh Kumar Sharma (Prop. of Tirupati Balaji Gems), Shri Gauri Shankar Pareek (Prop. of Vinayak Overseas, Shri Umesh Kumar Saboo (Prop. of M/s Shruti Gems) and Naman Gems Pvt Ltd., the issue of their being genuine or not were travelled up to ITAT, Jaipur Bench, Jaipur. That order of the bench for that assessee was placed before us in Paper Book filed for AY 1999-2000 as under;- Name of alleged bogus supplier PB Page No. Shri Umesh Kumar Saboo (Proprietor of M/s Shruti Gems) 159 to 181 Shri Mahesh Kumar Sharma (Proprietor of M/s Tirupati Balaji Gems) 56 to 63 M/s Naman Gems Private Limited 224 to 233 Shri Gauri Shankar ....
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.... Order of Hon'ble Rajasthan High Court in the cases of: - Shri Umesh Kumar Saboo (Proprietor of M/s Shruti Gems) 245 Shri Gauri Shankar Pareek (Prop. of M/s Vinayak Overseas) 246 to 247 The bench also noted that in the case of Rakesh R Purohit, Shri Ramesh Chand Maheshwari and Shri Manmohan Krishna Bagla, ITAT has categorically held that these persons were not benami of Shri Rakesh R Purohit, Shri Ramesh Chand Maheshwari and Shri Manmohan Krishna Bagla. The department filed appeal against the order of ITAT in the case of Shri Rakesh R Purohit, Shri Ramesh Chand Maheshwari and Shri Manmohan Krishna Bagla which has also been dismissed by Hon'ble Rajasthan High Court. The copy of the order of ITAT and Rajasthan High Court has been filed in paper Book for AY 1999-2000 as under: - Copy of Orders of Hon'ble ITAT, Jaipur Bench Jaipur given in the cases of: - Shri Rakesh R. Purohit, 248 to 259 Shri Ramesh Chand Maheshwari 260 to 281 Shri Manmohan Krishan Bagla. 282 to 304 Copy of Order of Hon'ble Rajasthan High Court in the cases of Shri Rakesh R. Purohit, Shri Ramesh Chand Maheshwari and Shri Manmohan Krishan Bagla. 305 to 316 ....
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....ecided on 20.06.2016, the parties are bound by the principal of law pronounced in the aforesaid three judgement. 4. We remit back the case to the Assessing Officer for deciding afresh on the factual matrix. The authority will accept the law but the transaction whether it is genuine or not will be verified by the Assessing Officer on the basis of the aforesaid three judgements. The issues are answered accordingly. The appeal is accordingly disposed of." 4. Counsel for the respondent was not in a position to assail the aforesaid factual position. 5. In that view of the matter, the issue is covered by the aforesaid judgement and the matter is remitted back to the Assessing Officer who will look in the matter afresh. The bench also noted that in the second round of litigation no fresh enquiries or no new material brought on record no enquiries said to have been made which the revenue pleaded before the Hon'ble High Court. Even the order of the ld. AO as well as of the ld. CIT(A) remained on the same finding as that of in the first round. 31. The bench also noted from the assessment order it does not appear that the ld. AO has made any fresh inquiries to....
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....the industry which is running the business, the addition which has been made on the bases of GP which has been shown of the identical industry whose case is also heard together. The GP rate of previous years reads as under:- A.Y. 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2009-10 unaudited 2010-11 Sales 198490 1426903 5466428 68749794 97777586 10306287 1072033 1540384 Stock Dif. 144657 5147868 0 71450573 6769267 83951400 83334242 5750095 Total 2129557 1941690 5466428 75894851 1054510 11145801 11553681 2115394 Purchases 181023 1698878 4962283 68670235 9376682 96584379 99103051 1S74824 Direct Cost 0 6118276 9962436 1409772 1312092 8607118 10319346 8163403 Total 181023 1760061 5061907 70080007 9507891 97445091 10013498 1956458 Grow 3193228 1816292 4045206 5S14844 9466185 14012920 15401828 1589358 G. P. rate 16.08% 12.72% 7.40% 8.45% 9.68% 13.59% 14.36% 10.31% Taking into account the average GP rate which will be applied in the prese....