M/s. Arihant Gases, Bhavnagar V. The Income tax Officer,Ward-2(2), Bhavnagar

ITA 1151/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6334 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-06-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 13-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: ANKIT TALSANIA
• Keywords: Bogus purchase; Principle of natural justice; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH (BEFORE S/SHRI G.D. AGARWAL, VICE-PRESIDENT AND BHAVNESH SAINI, JUDICIAL MEMBER) ITA NO.1151/AHD/2009 [ASSTT. YEAR : 2005-2006] M/S.ARIHANT GASES NR. UNION BANK OF INDIA LOKHAND BAZAR BHAVNAGAR. VS. ITO, WARD-2(2) BHAVNAGAR. (APPELLANT) (RESPONDENT) REVENUE BY : SHRI ALBINUS TIRKEY ASSESSEE BY : SHRI ANKIT TALSANIA O R D E R PER G.D. AGARWAL, VICE-PRESIDENT : THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME -TAX (APPEALS)-XX, AHMEDABAD DATED 24.12.2008 FOR A.Y.2005-2006 ARISIN G OUT OF THE ORDER OF THE AO UNDER SECTION 143(3) OF THE INCOME TAX AC T, 1961. 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE IS AGAINST THE DISALLOWANCE OF PURCHASES AMOUNTING TO RS.6,44,800/ -. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE AO WHILE ARRIVING AT T HE CONCLUSION THAT THE PURCHASES TO THE EXTENT OF RS.6,44,800/- IS BOGUS, HAS RELIED UPON THE INFORMATION RECEIVED FROM SALES-TAX DEPARTMENT, WHE REIN THE SALES-TAX DEPARTMENT SEEMS TO HAVE INFORMED THE AO THAT THE S OCALLED SELLERS WERE ENGAGED IN THE ACTIVITY OF ISSUING BOGUS PURCHASES BILLS AND THEREFORE THEIR SALES TAX NUMBER HAS BEEN CANCELLED. HOWEVER , WE FIND THAT THE INFORMATION COLLECTED BY THE AO WAS BEHIND BACK OF THE ASSESSEE AND THE SAME HAS NOT BEEN CONFRONTED TO THE ASSESSEE, DESPI TE THE REQUEST OF THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS. IT IS SETTLED LAW THAT AS PER ITA NO.1151/AHD/2009 -2- THE NATURAL JUSTICE ANY MATERIAL COLLECTED BEHIND T HE BACK OF THE ASSESSEE CANNOT BE USED AGAINST THE ASSESSEE UNLESS SUCH MAT ERIAL IS SUPPLIED TO THE ASSESSEE AND HE IS ALLOWED AN OPPORTUNITY TO CONTRO VERT THE SAME. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LOWER A UTHORITIES AND RESTORE THE MATTER BACK TO THE FILE OF THE AO. WE DIRECT H IM TO SUPPLY THE COPY OF THE INFORMATION RECEIVED FROM THE SALES-TAX DEPARTM ENT AND THEREAFTER ALLOW ADEQUATE OPPORTUNITY TO THE ASSESSEE TO REBUT THE SAME. THE ASSESSEE WILL BE AT LIBERTY TO PRODUCE ANY MATERIAL OR EVIDENCE IN SUPPORT OF THE GENUINENESS OF THE PURCHASES. THE AO WILL R E-ADJUDICATE THE ISSUE THEREAFTER IN ACCORDANCE WITH LAW. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEE MED TO BE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON 24 TH JUNE, 2011 SD/- SD/- (BHAVNESH SAINI) JUDICIAL MEMBER (G.D. AGARWAL) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 24-06-2011 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