Sh. Sandeep Aggarwal, Delhi V. DCIT, New Delhi

CO 319/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 7449 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 9 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 09-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 30-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NIDHI SRIVASTAVA
• Keywords: Bogus purchase; Search and seizure; Opportunity of cross examination; Accommodation entries

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI B BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE , JUDICIAL MEMBER ITA NO. 227 2 /DEL/20 1 5 [A.Y 20 07 - 08 ] THE DY . C.I.T VS. SHRI SANDEEP AGGARWAL CENTRAL CIRCLE - 1 9 34, SHANTI VIHAR NEW DELHI DELHI PAN : A AJPK 8226 B CO NO. 319/DEL/2015 [A/O ITA NO. 2272 /DEL/20 15 [A.Y 2007 - 08]] SHRI SANDEEP AGGARWAL VS. THE DY. C.I.T 34, SHANTI VIHAR CENTRAL CIRCLE - 19 DELHI NEW DELHI PAN : A AJPK 8226 B [APPELLANT] [RESPONDENT] DATE OF HEARING : 07 . 0 1 .201 9 DATE OF PRONOUNCEMENT : 0 9 . 0 1 .201 9 ASSESSEE BY : NONE REVENUE BY : MS. NIDHI SRIVASTAVA , CIT - DR 2 ORDER PER N.K. BILLAIYA , ACCOUNTANT MEMBER, THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE PREFERRED AGAINST THE ORDER OF THE CIT(A) - 25 , NEW DELHI DATED 04 .0 2 . 201 5 PERTAINING TO A.Y 20 07 - 08. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, THOUGH ON 05.11.2018, THE COUNSEL WAS AWARE OF THE DATE OF HEARING. WE DECIDE TO PROCEED EX PARTE. WE HEARD THE LD. DR AT LENGTH AND HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 3. T HE SOLITARY GR IEVANCE RAISED BY THE REVENUE IS THAT THE CIT(A) ERRED IN RESTRICTING THE ADDITION TO RS. 5,92,279/ - FROM TOTAL ADDITION OF RS. 1,62,26,036/ - . 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED BY THE INV WING O N 26.04.2010 IN M/S PILOT GROUP OF CASES. THE ASSESSEES PREMISES WERE ALSO COVERED U/S 132(1) 3 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT']. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION IN THE CASE OF SHRI RAKESH GUTPA, SHRI VI SHESH GUPTA, SHRI VAIBHAV JAIN AND SHRI NAVNEET JAIN, IT WAS FOUND THAT THESE PERSONS ARE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES THROUGH BOGUS PURCHASE BILLS FROM THE FIRMS OWNED AND CONTROLLED BY THEM. 4. IN THEIR RESPECTIVE SUBMISSIO NS, THESE PERSONS GAVE NAMES OF THE FIRM S WHICH WERE ENGAGED IN PROVIDING ACCOMMODATION BILLS IN RESPECT OF BOGUS PURCHASES. 5. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD MADE PURCHASES OF RS. 1,62,26,036/ - FROM SHREE GOVERDHAN INTERNATIONAL WHICH WAS ENGAGED IN PROVIDING ACCOMMODATION BILLS IN RESPECT OF BOGUS PURCHASES. TAKING A LEAF OUT OF THE STATEMENT RECORDED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE PURCHASES OF RS. 1,62,26,036/ - ARE BOGUS AND , ACCORDINGLY , MADE ADDITION OF THE SAME. 4 6 . THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) AND VEHEMENTLY STATED THAT THE COPIES OF STATEMENTS FROM WHICH THE ASSESSING OFFICER DREW CONCLUSION WERE NEVER SUPPLIED TO THE ASSESSEE NOR ANY OPPORTUNITY OF CROSS EXAMINATION WAS GIVEN. IT WAS POINTED OUT TO THE CIT(A) THAT THE ASSESSEE HAS SUBMITTED COMP LETE QUANTITATIVE DETAILS OF OPENING STOCK, PURCHASES, SALES AND CLOSING STOCK. IT WAS BROUGHT TO THE NOTICE OF THE CIT(A) THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE BEEN AUDITED AND THE SAME HAS NOT BEEN REJECTED BY THE ASSESSING OFFICER. 7 . AFTER C ONSIDERING THE FACTS AND SUBMISSIONS AND FACTUAL DETAILS BROUGHT ON RECORD AND DRAWING SUPPORT FROM VARIOUS JUDICIAL DECISIONS, THE CIT(A) WAS OF THE OPINION THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DISALLOWING THE PURCHASES OF RS. 1,62,26,036/ - . T HE CIT(A) WAS OF THE FIRM BELIEF THAT THE PROFIT @ 5% ON THE ALLEGED BOGUS PURCHASE WOULD MEET THE ENDS OF JUSTICE AND ACCORDINGLY, DIRECTED THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO RS. 5,92,279/ - . 5 8. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. THE LD. DR STRONGLY SUPPORTED THE FINDINGS OF THE ASSESSING OFFICER AND READ THE RELEVANT OBSERVATIONS OF THE ASSESSING OFFICER. 9. THE DETAILS OF PURCHASES AND THEIR CORRESPONDING SALES CAN BE UNDERSTOOD FROM THE FOLLOWING CHART: DATE PARTICULAR S ITEM UNIT PURCHASE SALE QUANTITY AMOUNT (EXCL TAX) QUANTITY AMOUNT (EXCL TAX) 3/22/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KG'S 20,023.40 1,471,720 3/22/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KGS 20,131.70 1,479,680 3/22/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KGS 20,077.80 1,475,674 3/22/2007 PILOT INDUSTRIES LTD LEAD KGS 20,023.40 1,475,725 3/22/2007 PILOT INDUSTRIES LTD LEAD KG'S 20,131.70 1,483,706 3/22/2007 PILOT INDUSTRIES LTD LEAD KG'S 20,077.80 1,479,734 3/23/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KGS 20,026.25 1,471,929 3/23/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KGS 20,073.55 1,475,406 3/23/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KG'S 20,093.20 1,476,850 3/23/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KGS 20,054.85 1,474,031 3/23/2007 PILOT INDUSTRIES LTD LEAD KGS 20,026.25 1.475,935 6 3/23/2007 PILOT INDUSTRIES LTD LEAD KGS 20.073.55 1.479,421 10. THE UNDISPUTED FACT IS THAT SALES OF RS. 1,63,36,558 / - WAS ACCEPTED BY THE ASSESSING OFFICER. ASSUMING, YET NOT ACCEPTING, THE PURCHASES OF RS. 1,62,26,035/ - ARE BOGUS PURCHASES, THEN WE FAIL TO 3/23/2007 PILOT INDUSTRIES LTD LEAD KG'S 20,093.20 1,480,869 3/23/2007 PILOT INDUSTRIES LTD LEAD KG'S 20,054.85 1,478,042 3/24/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KGS 20,063.70 1,474,682 3/24/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KG'S 20,033.65 1,472,473 3/24/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KG'S 20,086.70 1,476,372 3/24/2007 SHREE GOVERDHAN INTERNATIONAL LEAD KG'S 20,098.20 1,477,218 3/24/2007 PILOT INDUSTRIES LTD LEAD KG'S 20,063.70 1,478,695 3/24/2007 PILOT INDUSTRIES LTD LEAD KG'S 20.033.65 1,476,480 3/24/2007 PILOT INDUSTRIES LTD LEAD KG'S 20,086.70 1,480,390 3/24/2007 PILOT INDUSTRIES LTD LEAD KG'S 17,760.65 1,481,237 3/24/2007 PILOT INDUSTRIES LTD LEAD KG'S 861.3 6 66,324 TOTAL 220,763.00 16,226,035 219286.81 16,336,558 7 UNDERSTAND HOW THE ASSESSEE HAS BOOKED SALES OF RS. 1,63,36,558/ - SINCE NO ADVERSE INFERENCE HAS BEEN DRAWN BY T HE ASSESSING OFFICER IN SO FAR AS SALES ARE CONCERNED. 11. THERE ARE DEFINITELY MOVEMENT OF GOODS AND, THEREFORE, IN OUR CONSIDERED OPINION, ENTIRE PURCHASES CANNOT BE TREATED AS INCOME OF THE ASSESSEE. PROFIT OF 5% TAKEN BY THE CIT(A) IN THIS LINE OF T RADE SHOULD MEET THE ENDS OF JUSTICE. THE CIT(A) HAS RIGHTLY RESTRICTED THE ADDITION TO RS. 5,92,279/ - AND, THEREFORE, NO INTERFERENCE IS CALLED FOR. 12. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO. 227 2 /DEL/201 5 AS WELL AS THE CROSS OBJECTION OF THE ASSESSEE IN CO NO. 319/DEL/2015 ARE DISMISSED. THE ORDER IS PRON OUNCED IN THE OPEN COURT ON 0 9 . 0 1 .201 9 . S D / - S D / - [ SUCHITRA KAMBLE ] [ N.K. BILLAIYA ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 9 T H JANUARY , 201 9 VL/ 8 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5. DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER