Vijay Kumar Gupta Vs ITO (ITAT Delhi)
ITAT Delhi Grants Partial Relief to Jeweller – Sundry Debtors Addition Deleted, Purchases Restricted to 10%
Assessee, a jeweller, filed appeal against order of NFAC confirming additions made in scrutiny assessment. AO had assessed total income after adding Rs.15,20,750/- as unconfirmed sundry debtors & Rs.9,40,000/- as bogus purchases.
AO noted that sundry debtors could not be verified as notices u/s 133(6) returned unserved. He therefore added Rs.15,20,750/- to income. CIT(A) confirmed. Tribunal observed that sales corresponding to these debtors were already recorded in books & accepted by AO. Treating debtors as income again would amount to double taxation. Further, in jewellery trade, it is impractical to obtain full addresses of all customers. Hence, addition of Rs.15,20,750/- was deleted.
Regarding bogus purchases of Rs.9,40,000/-, AO found that confirmation from seller (Smt. Savitri Gupta) could not be obtained & treated transaction as non-genuine. Tribunal noted that Assessee maintained regular books & stock tally; purchases could not be fully disregarded. Balancing equities, it restricted disallowance to 10% (Rs.94,000/-) with a rider that this finding shall not be precedent.
Accordingly, appeal was partly allowed – sundry debtor addition deleted & bogus purchase addition restricted to 10%
FULL TEXT OF THE ORDER OF ITAT DELHI
