Appeal details
Counselvise Citation
103420114 RSA 2015
Assessee PAN
Bench
Appeal Number
Duration Of Justice
6 month(s) 21 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-09-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC 2
Next Hearing Date
12-08-2015
Assessment Year
2006-2007
Appeal Filed On
20-02-2015
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 2 , NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 1034 /DEL/201 5 AY: 200 6 - 07 SHRI SUMESH AGGARWAL VS. ITO, WARD 39(3) C/O RAJ KUMAR & ASSOCIATES, C.A. NEW DELHI 4435/7, ANSARI ROAD DARYA GANJ NEW DELHI PAN: AACPA 4060 E (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJ KUMAR GUPTA, C.A. AND SHRI SUMIT GOEL, C.A. RESPONDENT BY : S MT. RAKHI VIMAL, JCIT ORDER THI S IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LD.CIT(APPEALS) - XX, NEW DELHI DATED 28.1.2015 ON THE FOLLOWING GROUNDS. 1. THAT UNDER THE FACTS AND CIRCUMSTANCES, THE PROCEEDINGS U/S 147/148 ARE ILLEGAL, UNSUSTAINABLE, MECHANICAL, WITHOUT APPLICATION OF MIND AND WITHOUT JURISDICTION, CONSEQUENTLY THE COMPLETE RE - ASSTT. PROCEEDINGS ARE UN SUSTAINABLE. 2. THAT THE INITIATION OF PROCEEDINGS U/S. 147 /1 48 IS FURTHER UN SUSTAINABLE IN LAW AS APPR OVAL TAKEN U/S. 151 IS MECHANICAL & WITHOUT APPLICATION OF MIND. 3.1. THAT THE LD. AO GROSSLY ERRED IN LAW AS WELL AS ON FACTS IN MAKING ADDITION OF RS. 5,94,669/ - U/S.69 C AS DEEMED INCOME FOR ALLEGED BOGUS PURCHASES. 3.2. THAT LD. CIT( A) FURTHER ERRED IN SUSTAINING AN ADDITION OF RS. 2,14,081 / - BEING 36% OF RS.5.94,669/ - BY HOLDING THAT ONLY TO THE EXTENT OF 80% OF CLAIMED PURCHASES MUST HAVE BEEN MADE FROM THE GREY MARKET, THEREFORE, TO THE EXTENT OF BALANCE 20% THERE ARE NO PURCHASES AND FURTHE R APPLYING SEC. 40 A (3) ON ALLEGED PURCHASES OF 80% FROM GREY MARKET AND CONSEQUENTLY DISALLOWING 20% OF 80% WHICH CALCULATED 16%, THUS, CALCULATED TOTAL ADDITION AT 36% (20% + 16%). ALL THE WORKINGS OF LD. CIT (A) ARE BASED ON PRESUMPTIONS, ASSUMPTIONS A ND ON NO COGENT MATERIAL AVAILABLE ON RECORD. ITA NO. 1034/DEL/2015 A.Y. 2006 - 07 SH. SUMESH AGGARWAL, NEW DELHI 2 3.3. THAT FURTHER THE FINDINGS OF LD. CIT (A) ARE BASED ON WRONGLY TAKEN FACTS THAT THE BOOKS OF ALE'S NOT PRODUCED. STOCK INVENTORY NOT MAINTAINED AND PRODUCED ETC. ETC., WHILE BOOKS, SUPPORTING, STOCK RECO RDS, STOCK RECONCILIATION ETC. ETC. WERE PRODUCED BEFORE BOTH THE AUTHORITIES, EXAMINED AND NO DISCREPANCY FOUND THEREIN. 3.4. THAT THE REMAND REPORT OF THE AO IS ALSO FACTUALLY INCORRECT AND DOES NOT RELATES TO THE CASE AND FACTS OF THE ASSESSEE, THERE FORE, LD. CIT (A) FACTUALLY ERRED IN CONSIDERING THE SAID REMAND REPORT FOR HER CONCLUSION. 4. THAT UNDER THE FACTS AND CIRCUMSTANCES, NO INTEREST U/S. 234 B SHOULD HAVE BEEN CHARGED. WITHOUT PREJUDICE, IN ANY CASE, THE CALCULATIONS ARE ERRONEOUS AND EX CESSIVE. 2. AFTER HEARING RIVAL CONTENTIONS, I FIND THAT THE A.O. HAS DISALLOWED AN AMOUNT OF RS.5,94,669/ - BEING PURCHASES FROM OM AGENCIES, ON THE GROUND THAT THESE ARE BOGUS PURCHASES. ADDITIONS IS MADE U/S 69C OF THE ACT. ON APPEAL THE FIRST AP PELLATE AUTHORITY HELD THAT, AS THE SALES C ORRESPONDING TO THESE PURCHASES ARE ADMITTED BY THE A.O ., THE PURCHASES CANNOT BE DISPUTED. NEVERTHELESS, SHE HELD THAT THE PURCHASES MAY HAVE BEEN MADE FROM THE GREY MARKET. ON SUCH FINDING SHE DISALLOWED 20% OF THE PURCHASES WHICH AMOUNTED TO RS.1,18,934/ - . 2.1. FURTHER O N THE PREMISE THAT THE PURCHASES MADE IN THE GREY MARKET, WHICH SHE ESTIMATED AT RS.4,75,735/ - (I.E. RS.5,94,669 ( - ) 20%), SHOULD HAVE BEEN MADE IN CASH , SHE INVOKED S.43A(3) AND DISALLOWED 2 0% OF THE SAME, AMOUNTING TO RS.94,147/ - . THE TOTAL DISALLOWANCE IS RS.2,14,081/ - . THE ASSESSEE DISPUTED THE SAME. 3. AFTER HEARING RIVAL CONTENTIONS, I AM OF THE CONSIDERED OPINION THAT THIS DISALLOWANCE CANNOT BE SUSTAINED AS THE PA YMENTS IN QUESTION TO OM AGENCIES, IS MADE THROUGH ACCOUNT PAYEE CHEQUES. THE ASSESSEE PRODUCED THE TAX INVOICE OF OM AGENCIES, COPIES OF THE PURCHASE REGISTER RECORDING THE PURCHASES, COPIES OF THE STOCK REGISTER GIVING ITEM WISE AND QUANTITY WISE INWARD AND OUTWARD STOCK, COPIES OF BANK ACCOUNT EVIDENCING TRANSFER OF FUNDS THROUGH BANKING CHANNELS. COPIES OF TAX INVOICES GIVEN BY THE ASSESSEE AND COPIES OF SALES REGISTER, COPIES OF BANK STATEMENTS EVIDENCING SALE OF THESE STOCKS , WHICH WERE PURCHASED FROM M/S OM AGENCIE S. ITA NO. 1034/DEL/2015 A.Y. 2006 - 07 SH. SUMESH AGGARWAL, NEW DELHI 3 EVIDENCE OF TRANSPORTATION IS ALSO FILED BEFORE ME. THE ASSESSEE HAS NOT BEEN GIVEN AN OPPORTUNITY TO CROSS EXAMINE THE REVENUE S WITNESSES, SHRI R AKESH GUPTA AND SHRI V ISHESH GUPTA AND HENCE THEIR STATEMENTS CANNOT BE RELIED UPON. IN ANY EVENT DIS ALLOWANCE U/S 40A (3) CANNOT BE MADE ON THE ASSUMPTION THAT THE PURCHASE SHOULD HAVE BEEN MADE IN CASH. TAKING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I AM OF THE CONSIDERED OPINION THAT THE DISALLOWANCE IN QUESTION HAS TO BE DELETED AND THE APPEAL OF THE ASSESSEE BE ALLOWED. 4. AS I HAVE GRANTED RELIEF ON MERITS, I DO NOT DEEM IT NECESSARY TO ADJUDICATE THE ISSUE OF REOPENING AS IT WOULD BE AN ACADEMIC EXERCISE. 5. IN THE RESULT THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH SEPTEMBER, 2015. SD/ - ( J. SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 11 TH SEPTEMBER, 2015 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST.REGISTRAR, ITAT
