HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 125 / 2014 Commissioner of Income Tax (Central) Jaipur ----Appellant Versus M/S Clarity Gold (P) Ltd., 4, Ganga Vihar, Sardar Patal Marg, C-Scheme, Jaipur (Rajasthan) ----Respondent D.B. Income Tax Appeal No. 126 / 2014 Commissioner of Income Tax (Central) Jaipur ----Appellant Versus M/S Clarity Gold (P) Ltd., 4, Ganga Vihar, Sardar Patal Marg, C-Scheme, Jaipur (Rajasthan) ----Respondent D.B. Income Tax Appeal No. 127 / 2014 Commissioner of Income Tax (Central) Jaipur ----Appellant Versus M/S Clarity Gold (P) Ltd., 4, Ganga Vihar, Sardar Patal Marg, C-Scheme, Jaipur (Rajasthan) ----Respondent D.B. Income Tax Appeal No. 128 / 2014 Commissioner of Income Tax (Central) Jaipur ----Appellant Versus M/S Clarity Gold (P) Ltd., 4, Ganga Vihar, Sardar Patal Marg, (2 of 5) [ITA-125/2014] C-Scheme, Jaipur (Rajasthan) ----Respondent For Appellant(s) : Mr. Anil Mehta with Mr. Sameer Sharma and Mr. Gaurav Gaur For Respondent(s) : Mr. N.L. Agarwal with Mr. S. L. Poddar HON'BLE MR. JUSTICE K.S.JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 19/09/2017 1. In all these appeals since identical questions of law and facts are involved, they are decided by this common judgment. 2. By way of these appeals, appellant has challenged judgment and order of Tribunal whereby Tribunal has allowed appeal of assessee. 3. This court while admitting appeals framed following question of law:- 1. D.B. Income Tax Appeal No. 125/2014 Whether ITAT order is perverse in deleting entire trading addition of Rs. 7,15,57,073/- ignoring admitted facts in statement of Shri Khushi Kumar Ameriya (Director) u/s 132(4) of IT Act as well as evidences gathered during search confirming bogus purchase bills obtained? 2. D.B. Income Tax Appeal No. 126/ 2014 Whether ITAT order is perverse in deleting entire trading addition of Rs. 60,94,433/- ignoring admitted facts in statement of Shri Khushi Kumar Ameriya (Director) u/s 132(4) of IT Act as well as evidences gathered during search confirming bogus (3 of 5) [ITA-125/2014] purchase bills obtained? 3. D.B. Income Tax Appeal No. 127/ 2014 Whether ITAT order is perverse in deleting entire trading addition of Rs. 5,12,77,217/- ignoring admitted facts in statement of Shri Khushi Kumar Ameriya (Director) u/s 132(4) of IT Act as well as evidences gathered during search confirming bogus purchase bills obtained? 4. D.B. Income Tax Appeal No. 128/2014 Whether ITAT order is perverse in deleting entire trading addition of Rs. 4,21,16,555/- ignoring admitted facts in statement of Shri Khushi Kumar Ameriya (Director) u/s 132(4) of IT Act as well as evidences gathered during search confirming bogus purchase bills obtained? 4. Facts of case are that assessee company derives its income from business of manufacturing of jewellery and in trading of gems stones. background of search action on Clarity Group was survey under Section-133A conducted in FY2007-08 by BCTT Wing of Investigation Directorate of Jaipur which revealed that Clarity Gold Pvt Ltd. And its sister concerns M/s Marine Minerals and Herbal Remedies Pvt. Ltd. Jaipur had obtained bogus purchase bills amounting to Rs. 13.59 crores from various entry providers, who provided bogus sale bills without supplying goods mentioned in bills. After search (20.05.2009) case of assesssee was centralized with ACIT, Central Circle-1, Jaipur, who issued notice under Section-153A to assessee company on 23.09.2009. In response return was filed on 28.04.2011, declaring income of Rs. 17,86,470. Assessment was completed at Rs. 98,87,157 through order dated 23.08.2011 passed under Section-143(3) r.w.s.153A by ACIT, Central Circle-1, Jaipur. (4 of 5) [ITA-125/2014] 5. We have heard Mr. Mehta counsel for appellant and Mr. Gupta counsel for respondents. 6. Taking into consideration evidence on record, Tribunal while considering matter has totally deleted amount of addition. In our considered opinion, taking into account industry which is running business, addition which has been made on bases of GP which has been shown of identical industry whose case is also heard together. GP rate of previous years reads as under:- A.Y. 2004-05 2005-06 2006-07 2007-08 2008- 2009-10 2009-10 2010-11 09 unaudite Sales 198490 1426903 5466428 6874979 977775 10306287 1072033 1540384 4 86 Stock Dif. 144657 5147868 0 7145057 676926 83951400 83334242 5750095 3 7 Total 2129557 1941690 5466428 7589485 105451 11145801 11553681 2115394 1 0 Purchases 181023 1698878 4962283 6867023 937668 96584379 99103051 1S74824 5 2 Direct Cost 0 6118276 9962436 1409772 131209 8607118 10319346 8163403 2 Total 181023 1760061 5061907 7008000 950789 97445091 10013498 1956458 7 1 Grow 3193228 1816292 4045206 5S14844 946618 14012920 15401828 1589358 5 G. P. rate 16.08% 12.72% 7.40% 8.45% 9.68% 13.59% 14.36% 10.31% (5 of 5) [ITA-125/2014] 7. Taking into account average GP rate which will be applied in present case will be 12 per cent. It is made clear that where ever profit is more than 12 per cent, same will not be refunded to assessee but where it is less than 12 per cent, income will be assessed on basis of 12 per cent GP. 08. In view of above, all appeals stand allowed to aforesaid extent. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. B.M. G. /Gourav-69-72 Commissioner of Income-tax (Central) Jaipur v. Clarity Gold (P) Ltd