The DCIT, Circle-6, Surat V. Shri Chirag Mishrimal Shah, Surat

ITA 1004/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76739 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 06-05-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 06-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Section: 143(3); 131

Judgement Text

, , , , B, IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, B BENCH . .. . . .. . , !' !' !' !', , , , #$ %&'( #$ %&'( #$ %&'( #$ %&'(, , , , )* + ) ' )* + ) ' )* + ) ' )* + ) ' BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND ANIL CHATURVEDI, ACCOUNTANT MEMBER) ITA NO.1004/AHD/2011 [ASSTT.YEAR : 2007-2008] DCIT, CIR.6, SURAT. /VS. SHRI CHIRAG MISHRIMAL SHAH PROP. SUCHI GEMS 301, DIVYA DARSHAN APARTMENTS BH. UMRA POLICE STATION GHOD DOD ROAD, SURAT. PAN : AMUPS 4678 Q ( (( (-. -. -. -. / APPELLANT) ( (( (/0-. /0-. /0-. /0-. / RESPONDENT) + 1 2 )/ REVENUE BY : SHRI P.L. KUREEL, SR.DR 4& 1 2 )/ ASSESSEE BY : SHRI TUSHAR HEMANI 5 1 &(*/ DATE OF HEARING : 6 TH MAY, 2014 678 1 &(*/ DATE OF PRONOUNCEMENT : 06-06-2014 )9 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THIS APPEAL BY THE REVENUE FOR THE ASSESSMENT YEAR 2007-2008 IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A). 2. THE GROUNDS OF THE APPEAL OF THE REVENUE ARE AS UNDER: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE ENTIRE ADDITION MADE BY THE A O ON ACCOUNT UNVERIFIABLE PURCHASES OF RS.90,04,927/-. ITA NO.1004/AHD/2011 -2- 2. WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(A) WAS RIGHT IN HOLDING THAT THE DISALLOWANCE O N ACCOUNT OF REJECTION OF FICTITIOUS PURCHASES WAS ERRONEOUS ? 3. WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(A) WAS RIGHT IN DISMISSING RELEVANT FACTS AND E VIDENCES REGARDING NON-GENUINENESS OF PURCHASE CLAIMS AS COL LECTED IN ASSESSMENT AND PLACED ON RECORD. ? 4. WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(A) WAS RIGHT IN RELYING ON IRRELEVANT MATERIALS , THEORETICAL PREMISES, SURMISES AND CONJECTURES REGARDING THE PU RCHASES BEING GENUINE ? 5. WHETHER, ON THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE CIT(A) WAS RIGHT IN HOLDING THAT THE ASSESSEE HAS D ISCHARGED HIS ONUS AS REGARDS TO PURCHASE CLAIMS DESPITE FAILING TO FURNISH ADDRESSES OF THE PURCHASE PARTIES AND TO PRODUCE TH EM FOR VERIFICATION. ? 3. THE LEARNED DR SUBMITTED THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF PURCHASES AMOUNTING TO RS.90.04 LAKH S PERTAIN TO ITEMS OF PURCHASE OF DIAMOND CLAIMED TO HAVE BEEN PURCHASED FROM M/S.SANJAY ENTERPRISE, SURAT AND M/S.VISHAL OVERSEAS, SURAT DU RING THE YEAR. HE SUBMITTED THAT MERELY BECAUSE THE PAYMENT OF PURCHA SES WAS MADE PER ACCOUNT PAYEE CHEQUE BY THE ASSESSEE, IT COULD NOT BE SAID THAT THE ASSESSEE HAS DISCHARGED ITS ONUS OF PROVING THE GENUINENESS OF THE PURCHASES. HE RELIED ON THE DECISION OF ITAT, AHMEDABAD BENCH IN M/S.VEERA EXPORTS VS. ACIT, ITA NO.966/AHD/2007 DATED 30.4.2008 WHERE IN HELD THAT MERE PAYMENT MADE THROUGH BANKING CHANNEL IS NOT SUFFICI ENT, AND THE ESTABLISHMENT OF GENUINENESS OF PARTY OF PURCHASE O F DIAMONDS IS NECESSARY. 4. THE LEARNED COUNSEL FOR THE ASSESSEE HAS OPPOSED THE SUBMISSIONS OF THE LEARNED DR. HE RELIED ON THE ORDER OF THE CIT( A) AND REFERRED TO PARA ITA NO.1004/AHD/2011 -3- 4 OF THE CIT(A)S APPELLATE ORDER WHEREIN THE CIT(A ) HAS RECORDED THAT THE ONLY REASON FOR HOLDING THE PURCHASES FROM THESE TW O PARTIES AS NON- GENUINE WAS NON-PRODUCTION OF THESE PARTIES BEFORE THE AO. THE ASSESSEE HAS FILED ALL DOCUMENTARY EVIDENCES IN THE FORM OF PURCHASE INVOICES, EVIDENCES OF PAYMENT DURING THE YEAR AND ALL OUTSTA NDING AMOUNTS IN SUBSEQUENT YEARS, CONFIRMATIONS FROM THE TRANSACTIN G PARTIES AND RELEVANT EXTRACTS OF THE BANK STATEMENTS OF TRANSACTING PART IES, BOOKS OF ACCOUNTS AND STOCK STATEMENT ETC. THE LEARNED COUNSEL FOR T HE ASSESSEE SUBMITTED THAT THE CIT(A) HAS RECORDED THAT THE AO ALSO DID N OT DEEM IT FIT TO VERIFY THE RECORDS OF THE TRANSACTING PARTIES, WHICH WERE AVAILABLE IN HIS OWN RANGE, DETAILS OF WHICH HAS BEEN PROVIDED BY THE AS SESSEE. THE CIT(A) HAS FURTHER RECORDED THAT EVEN DURING THE REMAND PR OCEEDINGS, THE AO HAS NOT CONSIDERED IT RELEVANT TO VERIFY THE FACTS EITH ER FROM THE IT RECORDS OR BY ISSUE OF SUMMONS UNDER SECTION 131 OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PURCHASES MADE FROM M/S.SANJAY ENTERPRISES, SELLER PARTY OF DIAMONDS, IN THE IMMED IATELY PRECEDING ASSESSMENT YEAR, WAS ACCEPTED BY THE AO IN SCRUTINY ASSESSMENT FRAMED BY THE DEPARTMENT. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT THE ASSESSEE IN TH IS CASE WAS ABLE TO PROVE THE GENUINENESS OF TWO ITEMS OF PURCHASE OF D IAMONDS FROM SURAT PARTIES. THE ASSESSEE HAS FILED NECESSARY DOCUMENT ARY EVIDENCES IN SUPPORT OF ITS CLAIMS OF PURCHASE IN THE FORM OF PU RCHASE INVOICES, EVIDENCES OF PAYMENT THROUGH BANKING CHANNELS DURIN G THE YEAR AND OUTSTANDING AMOUNTS IN SUBSEQUENT YEAR, CONFIRMATIO NS FROM THE TRANSACTING PARTIES AND RELEVANT EXTRACTS OF THE BA NK STATEMENTS OF THE TRANSACTING PARTIES, BOOKS OF ACCOUNTS AND STOCK ST ATEMENTS. IN THE IMMEDIATELY PRECEDING ASSESSMENT YEAR, THE PURCHASE S OF DIAMOND FROM ITA NO.1004/AHD/2011 -4- M/S.SANJAY ENTERPRISES, SURAT BY THE ASSESSEE WAS A CCEPTED IN SCRUTINY ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT. THE SALES FIGURES OF THE ASSESSEE HAVE NOT BEEN DISTURBED BY THE DEPARTM ENT. THE CIT(A) HAS RECORDED IN HIS APPELLATE ORDER THAT THE AO HAS NOT VERIFIED THE RECORDS OF THE TRANSACTING PARTIES WHICH ARE AVAILABLE IN HIS OWN RANGE AND THE DETAILS OF WHICH WAS PROVIDED BY THE ASSESSEE. EVEN DURING THE COURSE OF REMAND PROCEEDINGS, THE AO HAS NOT VERIFIED THE FACTS EITH ER FROM THE IT RECORDS OR BY ISSUE OF SUMMONS UNDER SECTION 131 OF THE ACT TO THE TRANSACTING PARTIES. IN THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT THERE IS NO MISTAKE IN THE ORDER OF THE CIT(A) IN HOLDING THAT THE ASSESSEE HAS BEEN ABLE TO ESTABLISH GENUINENESS OF THE PURCHASES FROM THESE TWO SURAT PARTIES, AND ACCORDINGLY, THE ORDER OF THE CIT(A) I S CONFIRMED AND THE GROUNDS OF THE APPEAL OF THE REVENUE ARE DISMISSED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( %&'( %&'( %&'( %&'( / ANIL CHATURVEDI) )* + )* + )* + )* + /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !' !' !' !' /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD