IN INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER ITA No. 104/JP/2016 Assessment Year : 2007-08 Shri Alok Haldia cuke ACIT Prop. M/s. Ratnakriti Vs. Circle- 1 150, Haldia House, Johri Bazar, Jaipur Jaipur PAN/GIR No.: AAEPH 11017 L Appellant Respondent Assessee by: Shri M.L. Borad, Revenue by:Shri R.A. Verma,Addl.CIT - DR Date of Hearing : 27/09/2016 Date of Pronouncement : 28 /09/2016 ORDER PER BHAGCHAND, AM assessee has filed appeal against order of ld. CIT(A)-1,Jaipur for assessment year 2007-08. 2.1 assessee has filed grounds which are concisely as under:- (i) ld. CIT(A) erred in confirming action as to initiation of reassessment proceedings u/s 147 of Act and issuance of notice u/s 148 of Act by AO. (ii) ld. CIT(A) erred in confirming disallowance to tune of Rs. 18,36,368/- being 15% of total purchases of Rs. 1,22,42,451/- 2 ITA No. 104/2016 Shri Alok Haldia, vs. ACIT ,Circle-1, Jaipur (iii) ld. CIT(A) erred in upholding action of AO as to rejection of books of account. 2.1 Brief facts of case are that assessee filed return declaring income of Rs. 17,98,610/- on 29-10-2007 which was processed u/s 143(1) of Act. AO observed that as per search and seizure operation conducted over group concern of Shri Praveen Kumar Jain by Investigation Wing, Mumbai that Shri Praveen Kumar Jain was indulged in providing bogus bills to needy persons without actual delivery of gods .The Investigation Wing of Department recorded statement of Shri Praveen Kuamr Jain who was running bogus concern in name and style of M/s. JPK Trading (I) Pvt Ltd. in which Shri Jain accepted that his business concerns are indulged in providing accommodation entries to needy parties on commission basis. AO observed that modus operandi of Shri Jain was to issue sales invoices as per requirement of parties on pre-fixed commission on bill amount. AO noted that assessee Shri Alok Haldiya, Prop. M/s. Ratnakriti is engaged in business of trading of gems. AO further noticed that assessee had shown purchases from M/s. JPK Trading (I) Pvt Ltd.(Shri Praveen Kumar Jain Company) amounting to Rs. 1,22,42,451/-. AO got information from Investigation Wing 3 ITA No. 104/2016 Shri Alok Haldia, vs. ACIT ,Circle-1, Jaipur that purchases made by M/s. Ratankirit from M/s. JPK Trading (I) Pvt Ltd. is bogus and it is imperative to examine these purchases claimed by assessee in its books of account pertaining to A.Y. 2007-08 showing income of Rs. 1,22,42,451/- which had therefore, escaped assessment. AO observed that it was failure on part of assessee to disclose fully and truly all materials facts necessary for assessment. Hence, after recording reasons for same, AO issued notice on 26-03-2014 u/s 148 of Act for reopening of assessment for which ld. AR of assessee filed objection as to issuance of notice u/s 148 of Act. Conclusively, in present case, AO observed that assessee had claimed purchases of Rs. 1,22,42,451/- from M/s. JPK Trading (I) Ltd. and this party is only issuing bogus sale invoices. In view of these facts and circumstances of case, AO considered these purchases of assessee from M/s. JPK Trading (I) Pvt Ltd. as bogus purchases and rejected books of account u/s 145(3) of Act being not maintenance of books of account and looking to all possibilities AO disallowed 25% of total purchases of Rs. 1,22,42,451/- claimed by assessee which comes to Rs. 30,60,613/- and added same to total income of assessee. 2.2 Being aggrieved, assessee carried matter before ld. CIT(A) who has restricted disallowance to extent of 15% of 4 ITA No. 104/2016 Shri Alok Haldia, vs. ACIT ,Circle-1, Jaipur total purchases in view of decision of ITAT Jaipur Bench in cases of Shri Anuj Kumar Vareshney vs. ITO & Others. 2.3 During course of hearing ld. AR of opposed disallowance confirmed by ld. CIT(A) and prayed for deletion of addition made by lower authorities. 2.4 ld. DR relied on order of ld. CIT(A). 2.5 I have heard rival contentions and perused materials available on record. assessee is engaged in business of precious and semi precious stones. It is not imperative to repeat facts of case as narrated by lower authorities. In short, it is noticed that it is case of bogus purchases wherein assessee did not maintain books of account and income of assessee was escaped from assessment. It is noticed that in such type of unverifiable purchases / bogus purchases cases, Coordinate Bench in case of Anuj Kumar Varshney vs. ITO (ITA No. 187/JP/2012 order dated 22-10-2014) had confirmed disallowance to extent of 15% . Hence, I do not find any reason to interfere with order of ld. CIT(A) who has rightly complied with direction of Coordinate Bench (supra) confirming 15% disallowance on unverifiable purchases. Thus appeal of assessee is dismissed. 5 ITA No. 104/2016 Shri Alok Haldia, vs. ACIT ,Circle-1, Jaipur 3.0 In result, appeal of assessee is dismissed. Order pronounced in open court on 28 /09/2016 Sd/- (Bhagchand) Accountant Member Jaipur Dated:- 28 /09/ 2016 Copy of order forwarded to: s 1. Appellant- Shri Alok Haldia,Jaipur 2. Respondent- ACIT, Circle- 1, Jaipur 3. CIT(A). 4. CIT, 5. DR, ITAT, Jaipur 6. Guard File (ITA No. 104/JP/2016 By order, Assistant. Registrar Alok Haldia v. ACIT, Circle- 1, Jaipur