SHREE MADHU TEXTILES, MUMBAI V. ITO 14(2)(3), MUMBAI

CO 88/MUM/2015

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1014 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 7 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 15-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR D R A B C D
• Keywords: Accommodation entries
• Section: 143(3); 133A; 131; 69

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI A.D. JAIN, JM AND SHRI N.K. BILLAIYA, A M .. , . . , ./ I.T.A. NO. 769 /MUM/2014 ( / ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER 14(2)(3), EARNEST HOUSE, R. NO. 306, 3 RD FLOOR, NARIMAN POINT, MUMBAI- 400 002. / VS. MS SHREE MADHU TEXTILE, 158/164, LAXMI BHAVAN, 4 TH FLOOR, KALBADEVI ROAD, MUMBAI 400 002. ./ PAN :AAAFS6536R ( ! / APPELLANT ) .. ( '# ! / RESPONDENT ) '# $ /C.O. NO. 88/MUM/2015 ARISING OUT OF ITA NO. 769/MUM/2014 ( / ASSESSMENT YEAR 2008-09 MS SHREE MADHU TEXTILE, 158/164, LAXMI BHAVAN, 4 TH FLOOR, KALBADEVI ROAD, MUMBAI 400 002. / VS. INCOME TAX OFFICER 14(2)(3), EARNEST HOUSE, R. NO. 306, 3 RD FLOOR, NARIMAN POINT, MUMBAI- 400 002. ./ PAN :AAAFS6536R ( ! / APPELLANT ) .. ( '# ! / RESPONDENT ) DEPARTMENT BY SHRI VIMAL PUNMIYA R E SPONDENT BY : SHRI C.W. ANGOLKAR (D.R.) ? @ A B C D / DATE OF HEARING : 14-07-2015 EFGH B C D / DATE OF PRONOUNCEMENT : 22-7-2015 [ ITA 769/M/14 & CO 88/M/15 2 I / O R D E R PER A.D. JAIN, J.M . : .. , THIS APPEAL, FILED BY THE REVENUE, BEING ITA NO. 76 9/MUM/2014, IS DIRECTED AGAINST THE ORDER DATED 25-11-2013 PASSED BY THE LD. CIT(A) -25, MUMBAI, FOR THE ASSESSMENT YEAR 2008-09, AND THE CR OSS OBJECTIONS BEING, C.O. NO. 88/MUM/2015 HAVE BEEN FILED BY THE ASSESSE E. 2. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS O F TRADING. THE ORDER U/S 143(3) OF THE ACT WAS PASSED ON 29-12-2010, MAK ING ADDITION OF RS. 26,24,111/- AS UNEXPLAINED/UNPROVED PURCHASES/INVES TMENTS IN PURCHASES U/S 69 OF THE ACT, AND AFTER ADJUSTING BUSINESS LOS SES OF EARLIER YEARS TO THE EXTENT OF RS. 10,68,413/-, ARRIVING AT A TOTAL INCO ME OF RS. 15,35,055/-. THE AO NOTED THAT A SURVEY ACTION WAS CONDUCTED BY THE DEPARTMENT ON THE GROUP CONCERNS OF SHRI RAKESHKUMAR GUPTA & HIS FAMI LY MEMBERS ON 13/14.02.2009, WHEREIN IT WAS FOUND THAT THESE CONC ERNS WERE EXCLUSIVELY ENGAGED IN ISSUING ACCOMMODATION (SALES) BILLS, WIT HOUT EFFECTING REAL PURCHASES, TO THE PARTIES WHO REQUIRED THE BILLS IN ORDER TO INFLATE/ ACCOMMODATE THEIR PURCHASES MADE OUTSIDE THE BOOKS OF ACCOUNT. THE PROPRIETORS OF THESE GROUP CONCERNS HAD ADMITTED HA WALA SALES WITHOUT EFFECTING REAL PURCHASES IN THE STATEMENT RECORDED DURING THE COURSE OF SURVEY AND ALSO RE-AFFIRMED THE SAID FACTS IN THE STATEMEN TS RECORDED ON OATH U/S 131 ON 23.02.2009 AND 03.03.2009. FROM THE DOCUMENT S COLLECTED/IMPOUNDED FROM THE SURVEYED PREMISES OF T HE SAID GROUP, IT WAS FOUND THAT EVEN THE ASSESSEE HAD AVAILED OF SUCH AC COMMODATION BILLS FROM THE SAID GROUP CONCERNS TO THE EXTENT OF RS.26,24,1 11/-, AS FOLLOWS: 1. MANOJ MILLS RS. 13,23,479/- 2. DEV VANI INDUSTRIES RS. 13,00,632/- RS. 26,24,111/- 3. THE A.O., OBSERVED AS FOLLOWS:- ITA 769/M/14 & CO 88/M/15 3 (I) ASSESSEE'S PURCHASE FROM M/S MANOJ MILLS AND M /S DEV VANI INDUSTRIES AMOUNTING TO RS. 26, 24, 1111- ARE HAWAL A PURCHASES AND NOT GENUINE. (II) ASSESSEE HAS ISSUED CROSSED ACCOUNT PAYEE CHEQ UES TO THE EXTENT OF BILLS OBTAINED AND COLLECTED BACK THE AMOUNT IN CAS H AFTER REDUCING THE COMMISSION AMOUNT AS FOUND DURING THE SURVEY ACTION AND AFFIRMED U/S. 131 BY THE SAID GROUP CONCERNS. (III) AS DISCUSSED ABOVE THE ASSESSEE COULD NOT EST ABLISH THE PURCHASES TO THE EXTENT OF BILLS OBTAINED FROM THE SAID GROUP CONCERNS WHEREAS THE DEPARTMENT FOUND THAT THE SAID PARTIES HAVE NO REAL TRADING BUSINESS OF ANY GOODS BUT ISSUING OF ACCOMMODATION ENTRIES/BILL S ONLY. IN THE CIRCUMSTANCES, IT IS CLEAR THAT ASSESSEE'S PURCHASE S TO THE EXTENT CLAIMED TO HAVE MADE FROM ABOVE GROUP CONCERNS ARE FROM OUTSIDE THE BOOKS AND SOURCES FOR WHICH ARE NOT ESTABLISHED. TO GIVE COLOUR OF GENUINENESS ASSESSEE OBTAINED HAWALA SALES BILLS FR OM ABOVE GROUP CONCERNS. (IV) ALSO, THE ASSESSEE COULD NOT ESTABLISH THE PUR CHASES FROM THE SAID GROUP CONCERNS/WITH PURCHASE ORDERS, DELIVERY CHALLANS, TRANSPORT DETAILS, AND DETAILS CORROBORATING THE SALES OF THE GOODS PURCHASED FROM THE SAID PARTIES AND ALSO THESE PURCHASES ARE NOT R EFLECTED IN THE ASSESSEES STOCK REGISTER WHEN VERIFIED PHYSICALLY. THE AO CONCLUDED THAT THE ASSESSEE HAD OBTAINED ACC OMMODATION BILLS FOR AN AMOUNT OF RS.26,24,111/- FROM THE GROUP CONCERNS TO ACCOMMODATE ITS PURCHASES. IT WAS, THUS, HELD THAT THE ASSESSEE'S P URCHASES TO THE EXTENT CLAIMED TO HAVE BEEN MADE FROM THE SAID GROUP CONCE RNS WERE HAWALA PURCHASES/WERE OUT OF THE BOOKS, PURCHASES, SOURCES OF WHICH WERE NOT EXPLAINED BY THE ASSESSEE. THE ENTIRE AMOUNT OF RS. 26,24,111/- WAS, AS SUCH, ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AS U NEXPLAINED INVESTMENT AS PER SEC. 69 OF THE IT ACT, VIDE ORDER DATED 29-12-2 010. 4. THE LD. CIT(A), BY VIRTUE OF THE IMPUGNED ORDER, SUSTAINED THE ADDITION AT 10% OF THE PURCHASES, IN ORDER TO FILL THE GAP O F GP FOR THE PURCHASE AND ALSO TO PLUG ANY LEAKAGE OF REVENUE. THE ADDITION OF RS. 26,24,111/- MADE BY THE A.O. WAS THUS, RESTRICTED TO RS. 26,24,111/-. A GGRIEVED, THE DEPARTMENT AS WELL AS THE ASSESSEE HAVE FILED THEIR PRESENT RE SPECTIVE APPEALS. ITA 769/M/14 & CO 88/M/15 4 5. THE LD. COUNSEL FOR THE ASSESSEE HAS, AT THE OUT SET, SUBMITTED THAT THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE BY V ARIOUS DECISIONS OF THE TRIBUNAL. THESE ARE AS FOLLOWS:- 1. M/S JITENDRA HARSHAD KUMAR & COMPANY, ITA NOS. 3141 TO 3144/MUM/2012 AND 4349 TO 4351/MUM/2012. 2. DCIT VS. SMT. NEENA M. LEKHI, ITA NO. 1608/MUM/2013 , ORDER DATED 14-1-2015. 3. M/S C. CHOTALAL & CO., ITA NOS. 3960 TO 3967/MUM/20 12 4. ITO VS. M/S PRAMIT TEXTILES, ITA NOS. 3948 TO 3953/ MUM/2012 5. ACIT VS. M/S NEW MEENA BAZAR, ITA NO. 888/HYD/2012. 6. THE CONTENTION ON BEHALF OF THE ASSESSEE IS FOUN D TO BE CORRECT. IN M/S PRAMIT TEXTILES (SUPRA), [AUTHORED BY ONE OF US, T HE LD. AM], FOLLOWING THE ORDER IN THE CASE OF JITENDRA HARSHADKUMAR & CO. (SUPRA) AND THAT IN M/S C. CHOTALAL & CO., (SUPRA), BOTH RENDERED BY THE J URISDICTIONAL CO-ORDINATE BENCHES OF THE TRIBUNAL, IT HAS BEEN HELD AS FOLLOW S:- WE HAVE PERUSED THE ASSESSMENT ORDER AND THE ORDER OF CIT(A). WE HAVE ALSO PERUSED THE ORDER OF THE TRIBUNAL MUMBAI 'I' BENCH IN THE CASE OF M/S. JEETENDRA HARSHADKUMAR TEXTILES IN ITA NO.771 AND 2 211/MUM/2011 FOR ASSESSMENT YEAR 2007-08 DATED 21/11/2012. WE FIND F ORCE IN THE CONTENTIONS OF THE COUNSEL THAT THE FACTS AND CIRCUMSTANCES ARE IDENTICAL THOUGH THE FIGURES MAY DIFFER. THE TRIBUNAL HAD GIVEN ITS FINDING AT P ARA-8 ON PAGE-5 OF ITS ORDER WHICH READS AS UNDER :- '8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT WILL BE RELEVANT TO R EPRODUCE THE LETTER RECEIVED BY THE AO FROM SHRI RAKESH KUMAR GUPTA, WH ICH IS ALSO REPRODUCED IN THE ASSESSMENT ORDER: '1 AM IN RECEIPT OF YOUR SUMMONS U/ S. 131 OF THE I . T. ACT, 1961 IN THE CASE OF M/ S. JITENDRA HARSHAD KUMAR TEXTILE PVT. LTD. ASKING ME TO ATTEND BEFORE YOUR GOODSELF WITH THE D ETAILS OF MY ACCOUNT WITH THE SAID M/ S. JITENDRA HARSHAD KUMAR TEXTILE PVT. LTD. FOR A. Y.2002-03 & 2007-08. AS YOU ARE AWARE THAT MY ASSESSING OFFICER HAD RECO RDED ALLEGED STATEMENT U/S. 133A AND 131 OF THE I. T. ACT. 1961 HAVE BEEN RECEIVING WITNESS SUMMONS FROM ALL FOUR COMERS OF T HE CITY ON THE GROUND THAT I HAVE GIVEN ACCOMMODATION BILL, THOUGH I HAVE DENIED THE CONTENT OF THE STATEMENTS RECORDED BY A.D. U/S. 133A & 131 VIDE MY LETTER DATED 27.4.2009 AND MY AFFIDAVIT DAT ED 20.2.2009 ITA 769/M/14 & CO 88/M/15 5 SUBMITTED TO WARD 14(3)(2). IT IS PHYSICALLY IMPOSS IBLE FOR ME TO ATTEND BEFORE VARIOUS INCOME TAX AUTHORITIES, AS I AM NOT FEELING WELL, IT WILL NOT POSSIBLE FOR ME TO ATTEND BEFORE YOUR GOODSELF IN RESPONSE TO YOUR ABOVE MENTIONED SUMMONS. AS REGARDS M/ S. JIIENDRA HARSHAD KUMAR TEXTILES PV T. LTD. IS CONCERNED. I HAVE ALREADY GIVEN MY AFFIDAVIT WHE REIN, I HAVE SPECIFICALLY STATED THAT I HAVE SOLD THE GOODS TO M / S. JIIENDRA HARSHAD KUMAR TEXTILES P. LTD. AND THE CONSIDERATIO N IS RECEIVED TO ME BY CROSS ORDER CHEQUE. COPY OF THE SAID LEDGE R ACCOUNT IS ALREADY SUBMITTED THE DEPARTMENT.' 8.1 FROM THE ABOVE LETTER IT IS CLEAR THAT THE SAME WAS WRITTEN IN RESPONSE TO NOTICE ISSUED BY THE AO. NOT ONLY SHRI RAKESH KUMAR GUPTA HAS STATED THAT HE HAS RETRACTED FROM THE STA TEMENT RECORDED DURING THE SURVEY BUT ALSO III AN AFFIDAVIT DATED 2 0/2/2009 AND LETTER DATED 27/4/2009 TO DENY THE STATEMENT MADE DURING T HE SURVEY UNDER SECTION 133A. HE HAS FURTHER CONFIRMED THAT THE SAL ES MADE BY THE ASSESSEE WERE EFFECTED AND THE CONSIDERATION WAS RE CEIVED BY CROSS ORDER CHEQUES. THUS IT IS CLEAR THAT THERE IS NO MA TERIAL ON RECORD TO SAY THAT THE PURCHASES MADE BY THE ASSESSEE FROM THE SA ID CONCERN WERE BOGUS EXCEPT THE GENERAL STATEMENT RECORDED BY THE DEPARTMENT IN THE CASE OF SHRI RAKESH KUMAR GUPTA, WHICH WAS LATER ON RETRACTED. IN ABSENCE OF ANY MATERIAL BROUGHT ON RECORD AGAINST T HE SUBMISSIONS MADE BY SHRI RAKESH KUMAR GUPTA IN HIS LETTER DATED 20/1 2/2009 FILED BEFORE THE AO OF THE ASSESSEE THE ADDITION, IF ANY, MADE I N THE CASE OF THE ASSESSEE WILL BE BASED ON PRESUMPTION ONLY AND IT C ANNOT BE SUSTAINED IN THE EYES OF LAW. AS AGAINST THAT ASSESSEE HAS SU BMITTED VARIOUS EVIDENCES TO SHOW THAT THE ACTUAL DELIVERY OF THE G OODS WAS RECEIVED BY THE ASSESSEE FROM THE SAID PARTY WHICH HAS NOT BEEN DISCARDED BY THE AD. THE ADDITION SUSTAINED BY LD. CIT(A) IS ALSO ON PRESUMPTION BASIS. THEREFORE, KEEPING IN VIEW THE FACTS AND CIRCUMSTAN CES OF THE CASE, WE ARE OF THE OPINION THAT ADDITIONS MADE BY THE AO DE SERVES TO BE DELETED IN ITS ENTIRETY. WE DECIDE ACCORDINGLY. 7.1 ON IDENTICAL FACTS, AND ISSUES, THIS BENCH-HAS DECIDED THE APPEAL IN THE CASE OF M/S. C. CHOTALAL & CO. IN ITA NOS. ITA NO.3 960 TO 3967/MUM/2012 FOR ASSESSMENT YEARS 2002-03 TO 2009-10 DATED 24/09/13 WHEREIN ONE OF US (THE ACCOUNTANT MEMBER) IS A PARTY TO THE SAID DECISION. SINCE THE FACTS AND ISSUES BEING IDENTICAL, WE HAVE NO HESITATION IN FOLLOWING THE ORDER OF OUR CO-ORDINATE BENCH. RESPECTFULLY FOLLOWING THE SAME ALL THE APPE ALS FILED BY THE ASSESSEE ARE PARTLY ALLOWED AND ALL THE APPEALS FILED BY THE REV ENUE ARE ACCORDINGLY DISMISSED. 7. THE FACTS IN THE PRESENT CASE HAVE NOT BEEN SHOW N TO BE ANY DIFFERENT FROM THOSE IN THE CASE OF PRAMIT TEXTILES (SUPRA) , . THEREFORE, FOLLOWING THE ITA 769/M/14 & CO 88/M/15 6 DECISION THEREIN, THE GRIEVANCE OF THE DEPARTMENT I S FOUND TO BE WITHOUT MERIT AND IS REJECTED, WHEREAS THAT OF THE ASSESSEE IS AC CEPTED. 9. IN THE RESULT, THE APPEAL FILED BY THE DEPARTMEN T IS DISMISSED, WHEREAS THE C.O. FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JULY, 2015. I B EFGH ? JK L M 22-07-2015 F B NA SD/- SD/- (N.K. BILLAIYA) (A.D. JAIN ) ACCOUNTANT MEMBER /J UDICIAL MEMBER J ? A MUMBAI ; L DATED 22-7-2015 [ @.../ R.K. R.K. R.K. R.K. , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. '# ! / THE RESPONDENT. 3. ? VC () / THE CIT(A)- 25, MUMBAI 4. ? VC / CIT- 14, MUMBAI 5. Y@Z N 'C[\ , D [\H , J ? A / DR, ITAT, MUMBAI E BENCH 6. N ] A / GUARD FILE. ! ( / BY ORDER, # YC 'C //TRUE COPY// )/(* + ( DY./ASSTT. REGISTRAR) , J ? A / ITAT, MUMBAI