Shri. Agrawal Coal India Pvt.Limited, Nagpur V. Assistant Commissioner of Income Tax,Circle-4, Nagpur

ITA 115/NAG/2011

• Counselvise Citation: 11523914 RSA 2011
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 27-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Assessee Lawyers: M MANI
• Keywords: Bogus purchase
• Section: 132; 143(3)

Judgement Text

- -- - IN THE INCOME TAX APPELLATE TRIBUNAL-E-BENCH, NAGPU R ( ! '#$ $ % '$ / THROUGH VIDEO CONFERENCE AT MUMBAI) '& ' '& ' '& ' '& ' ( (( (. .. . . .. . , ,, ,%+ %+ %+ %+ ' '' ' ,$-. ,$-. ,$-. ,$-., ,, ,$ $$ $. .. .' '' '. . . . BEFORE S/SH.H.L.KARWA, PRESIDENT AND RAJENDRA,ACCOUNTANT MEMBER ' ./ ITA NO. 115 /NAG/2011 & & & & /& /& /& /& / ASSESSMENT YEAR 2006-07 SHREE AGRAWAL COAL INDIA PVT. LTD., 206 DEVIKRIPA SOCIETY, BHANDARA ROAD, WARDHMAN NAGAR, NAGPUR. PAN: AAFCS6709L VS. ACIT CIRCLE-4 SHARAF CHAMBERS, SADAR NAGPUR. ( 01 / // / APPELLANT ) ( 3401 / RESPONDENT ) ASSESSEE BY : SHRI M. MANI REVENUE BY : SHRI NARENDRA KANE ' 56 / DATE OF HEARING : 2 1- 01 -201 4 7!/ 56 /DATE OF PRONOUNCEMENT : 31- 01 -201 4 , 1961 1961 1961 1961 254 254 254 254( (( (1 11 1) )) )$ $$ $ -5&5 -5&5 -5&5 -5&5 ?$@ ?$@ ?$@ ?$@ ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM - -- -$ '?A $ '?A $ '?A $ '?A, ,, ,,$-. $ ' ,$-. $ ' ,$-. $ ' ,$-. $ ' : CHALLENGING THE ORDER DATED 22.02.2011 OF THE CIT(A )-II,NAGPUR,ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1.THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMING LUMPSUM DISALLOWANCE OF RS. 10,00,000/- OUT OF ADDITION OF RS. 1,70,67,931/- MADE BY A.O. TREATING URD PURCHASES AS BOGUS PURCHASE. 2.THAT ON THE FACTS OF THE CASE THE ADDITION OF RS. 10,00,000/- CONFIRMED BY LD. CIT (APPEAL) IS UNJUSTIFIED, ARBITRARY AND DESERVES TO BE DELETED. 3.THAT ANY OTHER GROUND MAY BE RAISED DURING THE CO URSE OF HEARING ON THIS APPEAL. ASSESSEE HAS ALSO FILED AN APPLICATION FOR CONDONIN G THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL.IT WAS SUBMITTED THAT ORDER OF THE CIT(A)- II NAGPUR WAS SERVED ON THE ASSESSEE ON 14. 03.2011, THAT THE APPEAL WAS TO BE FILED BY 14.05.2 011, THAT SAME WAS FILED IN JUNE 2011 AND THERE WAS A DELAY OF ABOUT A MONTHS, THAT ON 16.03.2011 A N ACTION U/S. 132 OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSEE AND THE RESID ENCES OF ALL ITS DIRECTORS, THAT PERSONS MANAGING THE AFFAIR OF THE ASSESSEE WERE BUSY IN ATTENDING P ROCEEDINGS BEFORE THE INVESTIGATION WING OF THE DEPARTMENT, THAT THE DELAY IN FILING THE APPEAL WAS NOT WILFULL. AT THE TIME OF HEARING BEFORE US, AUTHORISED REPRES ENTATIVE(AR) MADE THE SAME SUBMISSIONS. AFTER CONSIDERING THE APPLICATION AND SUBMISSIONS O F THE ASSESSEE, WE ARE OF THE OPINION THAT ASSESSEE WAS PREVENTED BY A REASONABLE AND SUFFICIE NT CAUSE IN NOT FILING THE APPEAL WITHIN THE TIME PRESCRIBED BY THE ACT. THEREFORE, WE CONDONE T HE DELAY IN FILING THE APPEAL. 2. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF TRADING AND LIASONING OF COAL, FILED ITS RETURN OF INCOME ON 12.11.2006 SHOWING TOTAL INCOME AT RS. 30 .93 LACS. ASSESSING OFFICER(AO) FINALISED 2 ITA NO. 115/NAG/2011 SHREE AGRAWAL COAL INDIA PVT. LTD. THE ASSESSMENT U/S. 143(3) OF THE ACT ON 31.12.2008 DETERMINING THE INCOME AT RS.4,23,30,145/-. DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT AS SESSEE HAD PURCHASED COAL FROM VARIOUS PARTIES AMOUNTING TO RS. 3.92 CRORES. AS PER THE DI RECTIONS OF THE AO, ASSESSEE FILED DETAILS OF THESE PARTIES AND FURNISHED THE ADDRESSES OF ALL TH E PERSONS EXCEPT OF THE PERSONS FROM URD PURCHASES WERE MADE. AO ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS. AFTER CONSIDERING THE VERIFICATIONS OF THE PURCHASES FROM THE SUPPLIERS, AO HELD THAT ASSESSEE HAD NOT PRODUCED ANY DOCUMENT/EVIDENCES IN THIS REGARD. HE ADDED RS. 2.21 CRORES TO THE INCOME OF THE ASSESSEE TREATING THE PURCHASES AS BOGUS PURCHASE. WITH REGARD TO URD PURCHASES, AO HELD THAT ASSESSEE HAD NOT FURNISHED SATISFACTORY EVIDENCES. HE MADE AN ADDITION OF RS.1,70,67,931/- UNDER THE HEAD UNPROVED URD PURCHASES. 3. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY(FAA) AND PRODUCE CONFIRMATION LETTERS FROM THREE PARTIES. FAA REMAND ED THE MATTER TO THE AO FOR VERIFICATION OF THE GENUINENESS OF THE PURCHASES TRANSACTION. AO SUBMIT TED TWO MORE REMAND REPORT TO THE FAA. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE A ND THE REMAND REPORTS, FAA HELD THAT AO HAD NOT DOUBTED THE QUANTITY DETAILS OF SALE AS WELL AS OPENING AND CLOSING STOCK, THAT AO MADE HUGE ADDITION WITHOUT ANY EVIDENCE, THAT HE DISBELIEVE T HE EVIDENCES FURNISHED BY THE ASSESSEE, THAT THE ASSESSEE HAD MAINTAINED STOCK REGISTER, THAT IT HAD SHOWN SALES CORRESPONDING TO THE PURCHASES IN THE STOCK REGISTER, THAT AO HAD NOT DOUBTED THE SAL ES SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOUNTS, THAT QUANTITY DETAILS WERE AVAILABLE IN T HE STOCK REGISTER, THAT THE AO WAS NOT JUSTIFIED IN HOLDING THAT THE ENTIRE URD PURCHASE WAS BOGUS, THA T URD PURCHASES WERE SUPPORTED BY PAYMENT OF VAT OF ANDHRA PRADESH. 4 . BEFORE US, AR SUBMITTED THAT ASSESSEE HAD PAID VA T IN ANDHRA PRADESH FOR THE URD PURCHASES, THAT ADDITION SUSTAINED BY THE FAA WAS E XCESSIVE. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE FAA. 5 .WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL BEFORE US.WE FIND THAT WHILE DECIDING THE ISSUE, FAA HAD CONSIDERED THE SUBMISSI ONS OF THE ASSESSEE AND THE REMAND REPORTS,THAT THE AO HAD NOT DOUBTED QUANTITY DETAIL S APPEARING IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE,THAT THOUGH NO DEFECT WAS POINTED OUT BY H IM ABOUT PURCHASE/SALE AND OPENING /CLOSING STOCK OF THE ASSESSEE YET HE MADE HUGE ADDITION TO THE INCOME OF THE ASSESSEE.AS PER THE ESTABLISHED PRINCIPLES OF TAX JURISPRUDENCE AO SHOU LD NOT DISTURB THE BOOK RESULTS OF AN ASSESSEE WITHOUT ANY BASIS.WE FIND THAT THERE IS NO EVIDENCE -PRIMARY/SECONDARY/DOCUMENTARY/ CIRCUMSTANTIAL -TO JUSTIFY THE ADDITION, MADE BY T HE AO, IN THE CASE UNDER CONSIDERATION.ADDITION TO THE INCOME OF AN ASSESSEE WITHOUT EVIDENCES IS L IKE BUILDING A CASTLE WITHOUT FOUNDATION.ON A SPECIFIC QUERY BY THE BENCH DR INFORMED THAT THE DE PARTMENT HAD NOT CHALLENGED THE ORDER OF THE FAA THOUGH SHE HAD GIVEN A RELIEF OF 1.60 CRORES UN DER THE HEAD URD PURCHASES AND HAD DELETED THE ADDITION OF RS.2.21 CRORES THAT WAS MADE FOR OT HER PURCHASES.IT CLEARLY INDICATES THAT THE ADMINISTRATIVE CIT HAD NOT AUTHORISED THE AO TO FIL E APPEALS AGAINST THE ORDER OF THE FAA,BECAUSE HE WAS CONVINCED THAT ORDER OF THE FAA WAS REASONAB LE AND JUSTIFIED.AS FAR AS THE APPEAL OF THE ASSESSEE IS CONCERNED,ONE THING IS CLEAR FROM THE O RDER OF THE FAA THAT ALL THE URD PURCHASES WERE IN CASH AND POSSIBILITY OF MAKING SOME ADJUSTM ENTS UNDER THAT HEAD CANNOT BE RULED OUT.FAA HAD FOUND THAT VAT WAS PAID FOR THE PURCHAS ES MADE IN ANDHRA PRADESH, BUT FOR OTHER URD PURCHASES SUCH DETAILS WERE NOT AVAILABLE.CONSI DERING THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US WE ARE OF THE OPINION THAT IN THE INTEREST OF JUSTICE ADDITION MADE BY THE FAA SHOULD BE RESTRICTED TO RS.5,00,000/-.EFFECTIVE GRO UND OF APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART. AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. B B B B 5C 5C5C 5C &B5 &B5 &B5 &B5 D D D D ?E ?E ?E ?E VAKR% VAKR% VAKR% VAKR% ,F ,F ,F ,F ,5 ,5 ,5 ,5 G GG G . 3 ITA NO. 115/NAG/2011 SHREE AGRAWAL COAL INDIA PVT. LTD. ORDER PRONOUNCED IN THE O PEN COURT ON 31 ST JANUARY, 2014. ?$@ 7!/ $ - 31 , 6 , 2014 ! . SD/- SD/- (H.L.KARWA/ ( (( (. .. . . .. . ) ( ,$-. ,$-. ,$-. ,$-. / RAJENDRA) PRESIDENT/ %+ $ $ $ $ '?A '?A '?A '?A /ACCOUNTANT MEMBER / MUMBAI, ? / DATE: 31.01.2014 SK ?$@ ?$@ ?$@ ?$@ 35 35 35 35 H$/5 H$/5 H$/5 H$/5 / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 01 2. RESPONDENT / 3401 3. THE CONCERNED CIT(A)/ 'I J , 4. THE CONCERNED CIT / 'I J 5. DR ITAT,NAGPUR BENCH/ K 35 , . . - . - . 6. GUARD FILE/ & L . '45 35 //TRUE COPY// ?$@ ' / BY ORDER, M / ' , DY./ASST. REGISTRAR , /ITAT, MUMBAI.