M/s. Metals United Alloys & Fusion Products Ltd, Nashik V. Income-tax Officer,

CO 39/PUN/2016

• Counselvise Citation: [2017] 123 COUNSELVISE.COM (IT) 3002 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-04-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-04-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 07-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 143(3); 234B; 133(6); 148

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO.2286/PUN/2016 [ [ / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, WARD1(4), NASHIK. . / APPELLANT VS. M/S.METAL UNITED ALLOYS FUSION PRODUCTS LTD, GAT NO.601/602, JAULKE ROAD, AT POST JAULKE, TAL.DINDORI, NASHIK PAN: AAFCM0083K . / RESPONDENT . / C.O. NO.39/PUN/2016 [ [ / ASSESSMENT YEAR : 2010-11 M/S.METAL UNITED ALLOYS FUSION PRODUCTS LTD, GAT NO.601/602, JAULKE ROAD, AT POST JAULKE, TAL.DINDORI, NASHIK PAN: AAFCM0083K . / CROSS OBJECTOR VS. THE INCOME TAX OFFICER, WARD1(4), NASHIK . / RESPONDENT [ / ASSESSEE BY : SHRI PRAMOD SHINGTE / REVENUE BY : SHRI SUHAS S. KULKARNI ITA NOS.2286/PUN/2016 CO NO.39/PUN/2016 M/S.METAL UNITED ALLOYS FUSION PRODUCTS LTD. 2 / DATE OF HEARING : 18.04.2017 / DATE OF PRONOUNCEMENT: 21.04.2017 / ORDER PER SUSHMA CHOWLA, JM: THE PRESENT APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) 1, NASHIK, DATED 04/07/2016 RELATING TO ASSESSMENT YEAR 2010 11 AGAINST ORDER PASSED U/S 143(3) R.W.S 147 OF THE OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT). THE ASSESSEE HAS FILED CROSS OBJECTIONS AGAINST THE APPEAL OF THE REVENUE. 2. THE REVENUE IN ITA NO.2286/PUN/2016 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-1, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS.33,93,110/- ON ACCOUNT OF ALLEGED BOGUS PURCHASES FROM HAWALA DEALERS/PARTIES? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-1, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION ON THE BASIS OF THE SECTION 292BB WHICH IS MAINLY FOR THE REFERENCE TO THE NOTICE ISSUE? 3. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-1, NASHIK WAS JUSTIFIED IN DELETING THE PURCHASES TREATED AS BOGUS ON THE BASIS OF THE OBJECTION RAISED BY THE ASSESSEE AND IGNORING THAT THE CASE FALLS UNDER SECTION 292B WHICH PROVIDES THAT AN ASSESSMENT WOULD NOT BE INVALIDATED SIMPLY BY AN OMISSION OR MISTAKE? 4. WHETHER THE LEARNED CIT(A) -1, NASHIK ERRED IN ASSUMING THE OBJECTIONS RAISED BY THE ASSESSEE AS U/S 292BB, WHICH ONLY REFERS TO THE ISSUE OF NOTICE AND THE OBJECTIONS RAISED WERE REGARDING THE VALIDITY OF PROCEEDINGS INITIATED BY THE AO U/S 147 AND REASONS RECORDED BY THE AO? 5. THE APPELLANT PRAYS THAT THE ORDER OF THE LEARNED CIT(A)-1, NASHIK MAY PLEASE BE CANCELLED AND THE ORDER OF ASSESSING OFFICER MAY PLEASE BE RESTORED. 6. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE HIS CASE. 7. THE APPELLANT PRAYS LEAVE TO ADD, ALTER CLARIFY, AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCASION DEMAND. ITA NOS.2286/PUN/2016 CO NO.39/PUN/2016 M/S.METAL UNITED ALLOYS FUSION PRODUCTS LTD. 3 3. THE ASSESSEE IN CO NO.39/PUN/2016 HAS RAISED THE FOLLOWING GROUNDS OF OBJECTIONS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN INITIATING THE PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 IN SPITE OF THE FACT THAT ON AN INDEPENDENT INQUIRY U/S 133(6) APPELLANT HAS SUBMITTED ALL THE NECESSARY DOCUMENTS AND SAME WERE VERIFIED BY THE LEARNED ASSESSING OFFICER, THEREFORE THE PROCEEDINGS INITIATED U/S 147 ARE BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN COMPLETING THE ASSESSMENT WITHOUT SERVICE OF NOTICE U/S 143(2), HENCE THE ASSESSMENT ORDER U/S 143(3) DATED 30/03/2015 IS BAD IN LAW AND NEEDS TO BE QUASHED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN RELYING ON THE STATEMENT OF M/S, JAIN CORPORATION RECORDED BY SALES TAX OFFICIALS WITHOUT GIVING ANY OPPORTUNITY TO THE APPELLANT TO REBUT, HENCE IT IS PRAYED TO DELETE THE ADDITION BASED ON SUCH STATEMENT. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN MAKING THE DISALLOWANCE OF PURCHASE OF A SUM OF RS.84,08,874/- BY ALLEGING THAT THESE PURCHASES ARE MADE FROM ALLEGED HAWALA PARTIES BY DISREGARDING THE ENTIRE DOCUMENTARY EVIDENCES PLACED ON RECORD. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN COMPLETING ASSESSMENT WITHOUT ISSUE OF NOTICE U/S.142 (1) CALLING FOR INFORMATION. 6. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE & IN LAW, THE LOWER AUTHORITIES ERRED IN COMPLETING THE ASSESSMENT U/S.143 (3) WITHOUT APPRECIATING THAT ASSESSEE NEVER APPEARED BEFORE A.O. FOR ASSESSMENT 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN NOT ALLOWING THE SET-OFF OF BROUGHT FORWARD LOSSES FROM THE ASSESSED INCOME AS PER THE PROVISIONS OF LAW, YOUR APPELLANT PRAYS FOR SUCH SET-OFF OF BROUGHT FORWARD LOSSES AS PER THE PROVISIONS OF LAW. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN LEVYING THE INTEREST U/S 234B A SUM OF RS.4,59,240/- WITHOUT CONSIDERING THE PROVISIONS OF SUB-SECTION 3 OF SECTION 234B AND FURTHER ERRED IN LEVYING THE INTEREST U/S 234B A SUM OF RS.69,973/-, APPELLANT SEEKS CONSEQUENTIAL RELIEF. 4. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THERE IS NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE, WHERE THE CIT(A) HAS DECIDED THE ISSUE ON JURISDICTION AND HAD HELD THE IMPUGNED ASSESSMENT ORDER TO BE BAD IN LAW. ITA NOS.2286/PUN/2016 CO NO.39/PUN/2016 M/S.METAL UNITED ALLOYS FUSION PRODUCTS LTD. 4 5. ON PERUSAL OF THE ORDER OF CIT(A), IT TRANSPIRES THAT THE ISSUE WHICH WAS ADJUDICATED BY THE CIT(A) WAS THE EXERCISE OF JURISDICTION UNDER SECTION 147/148 OF THE ACT. THE ASSESSING OFFICER AFTER RECORDING REASONS FOR REOPENING THE ASSESSMENT, HAD ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE IN REPLY, FILED THE RETURN OF INCOME AND ASKED FOR REASONS RECORDED FOR REOPENING THE ASSESSMENT. THE SAID REASONS WERE SUPPLIED TO THE ASSESSEE, WHO FILED OBJECTIONS AGAINST THE SAID REASONS. THE ASSESSING OFFICER WAS REQUIRED TO DISPOSE OF OBJECTIONS BY PASSING A SEPARATE AND SPEAKING ORDER, WHICH WAS NOT PASSED. THE CIT(A) RELIED ON THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. BAYER MATERIAL SCIENCES PVT. LTD. IN W.P. NO.2502 OF 2015, JUDGMENT DATED 27.01.2016 AND HELD THAT WHERE THE OBJECTIONS HAVE NOT BEEN DISPOSED OF BY THE ASSESSING OFFICER, THEN THE ASSESSMENT ORDER PASSED IS BAD IN LAW AND WAS QUASHED. 6. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) AND HAS RAISED THE ISSUE AGAINST THE MERITS OF DELETION OF ADDITION. 7. THERE IS NO MERIT IN THE APPEAL FILED BY THE REVENUE WHERE THE CIT(A) HAD ALLOWED THE APPEAL OF ASSESSEE ON JURISDICTIONAL ISSUE AND HAD NOT CONSIDERED THE MERITS OF THE ADDITION. FIRST OF ALL, THE CIT(A) HAS APPLIED PROPOSITION LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. BAYER MATERIAL SCIENCES PVT. LTD. (SUPRA) TO HOLD THAT WHERE THE OBJECTIONS FILED BY THE ASSESSEE AGAINST REASONS RECORDED FOR REOPENING THE ASSESSMENT HAVE NOT BEEN DISPOSED OF BY A SEPARATE SPEAKING ORDER, THEN THE IMPUGNED ASSESSMENT ORDER IS BAD IN LAW. THE SAID PROPOSITION IS SQUARELY APPLICABLE TO ITA NOS.2286/PUN/2016 CO NO.39/PUN/2016 M/S.METAL UNITED ALLOYS FUSION PRODUCTS LTD. 5 THE FACTS OF THE PRESENT CASE AND APPLYING THE SAME, THE ASSESSMENT ORDER IS TO BE QUASHED. IN SUCH CIRCUMSTANCES, THERE IS NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE AGAINST THE MERITS OF ADDITION AND THE SAME ARE DISMISSED. 8. THE ASSESSEE HAS FILED CROSS OBJECTIONS WHICH ARE DISMISSED BEING ACADEMIC IN NATURE. 9. IN THE RESULT, BOTH THE APPEALS OF REVENUE AND THE CROSS OBJECTIONS OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON THIS 21 ST DAY OF APRIL, 2017. SD/- (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 21 ST APRIL, 2017. / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. () / THE CIT(A)- 1 , NASHIK; 4. / THE PR. CIT-1, NASHIK ; 5. 6. , , / DR SMC, ITAT, PUNE; [ / GUARD FILE. / BY ORDER, // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE