NEPEAN HOLDINGS P.LTD, MUMBAI V. DCIT CEN CIR 42, MUMBAI

ITA 1237/MUM/2012

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2779 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 27-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 23-02-2012
• Court: TRIBUNAL
• Department Lawyers: R M MADHAVI
• Assessee Lawyers: JAHANGIR MISTRY
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER I.T.A. NO.1237/M/2012 (ASSESSMENT YEAR: 2007 - 2008 ) NEPEAN HOLDINGS PVT LTD., 1001, DALAMAL HOUSE, 10 TH FLOOR, NARIMAN POINT, MUMBAI 400 021. / VS. DCIT, CC - 22, AAYAKAR BHAVAN, GROUND FLOOR, MK MARG, MUMBAI 400 020. ./ PAN : AABCN0887C ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI JAHANGIR MISTRY & MADHUR AGRAWAL / RESPONDENT BY : SMT. R. M. MADHAVI, DR / DATE OF HEARING : 22.09.2016 / DATE OF PRONOUNCEMENT : 23 .09.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 23.2.2012 IS AGAINST THE ORDER OF THE CIT (A) - 38, MUMBAI DATED 19.12.2011 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. IN THIS APPEAL, ASSESSEE RAISED FOUR GROUNDS IN TOTO. THE ONLY ISSUE INVOL VED IN THE GROUNDS RELATES TO THE ADDITION ON ACCOUNT OF PURCHASE OF PAINTINGS FROM DIFFERENT PARTIES ON THE GROUND OF BOGUS TRANSACTIONS. 3. BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BRIEFLY NARRATED THE FACTS OF THE CASE AND BROUGHT OUR A TTENTION TO THE ORDER OF THE TRIBUNAL IN THE CASE OF MRS. KAVITA SINGH VS. DCIT IN ITA NO.1240/M/2012 (AY 2006 - 2007), DATED 31.8.2015 WHICH IS RELEVANT FOR THE PROPOSITION THAT THE ADDITIONS ON THE GROUND OF BOGUS TRANSACTIONS CANNOT BE MADE FOR THE REASON S GIVEN IN PARA 8 OF THE TRIBUNALS ORDER. FURTHER, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE STATEMENT OF SHRI KRISHNA KUMAR GUPTA, DATED 1.5.2007, ANSWER TO Q. NO.7, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT THE ASSESSEES NAME NEVER APPEARED ANY WHERE IN THE STATEMENT. HE ALSO RELIED ON THE CONFIRMATION LETTERS, THE BANK TRANSACTIONS AND THE 2 BOOK ENTRIES RELATING TO THE PURCHASE AND SALE OF THE SAID PAINTINGS AND SUBMITTED THAT THE LEGAL PROPOSITION AND THE FINDINGS GIVEN B Y THE TRIBU NAL IN THE CASE OF MR S. KAVITA SINGH (SUPRA) APPLY TO THE FACTS OF THIS CASE. HE ALSO SUBMITTED TH AT MRS. KAVITA SINGH, IN WHOSE CASE THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IS THE DIRECTOR OF THE INSTANT ASSESSEE - COMPANY. 4. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE CITED DECISION OF THE TRIBUNAL IN THE CASE OF MRS. KAVITA SINGH (SUPRA), WE FIND IT IS RELEVANT TO EXTRACT PARA 8 OF THE SAID TRIBUNALS ORDER AND THE SAME READ AS UNDER: - 8. ON CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THIS CASE, FACTS ON RECORD AND THE JUDICIAL PRONOUNCEMENTS BROUGHT BEFORE US, WE OBSERVE CERTAIN FINDINGS IN THIS CASE. FIRSTLY, THAT THE PAYMENT FOR THE PURCHASES HAVE BEEN MADE BY ACCOUNT PAYEE CHEQUE, THE CONFIRMATIONS FROM THE BANKS ARE ALSO IN RECORD, COPIES OF LEDGER ACCOUNT BILLS, COPIES OF PAYMENT PROOF AND OTHER DETAILS OF THE TRANSACTIONS ARE PROVIDED BEFORE THE DEPARTMENT WHICH ARE NOT IN DISPUTE. THE REVENUE HAS ACCEPTED THE PROFIT ON SALE OF THE PAINTINGS AS PROVIDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. THAT, IN THE SALES ARE GENUINE AND THE CORRESPONDING PURCHASES CANNOT BE POSSIBLY AN IN - GENUINE ONE. MOREOVER, THE RIGHT OF CROSS EXAMINATION WHICH WAS PRAYED FOR BY THE ASSESSEE WAS ALSO NOT ALLOWED TO HER. IF THIS OPPORTUNITY WOULD HAVE BEEN GIVEN, THE PICTURE WOULD PROBABLY MUCH MORE CLEAR. THAT, FURTHERMORE, THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF NIKUNJ EXIMP ENTERPRISES (P.) LTD (SUPRA) WHEREIN IT WAS OBSERVED WHEN THE SALES OF PURCHASED GOODS WERE NOT DOUBTED WHEN COPIES OF BANK STATEMENT SHOWING ENTRIES OF PAYMENT THROUGH BANK CHEQUES TO THE SUPPLIERS ARE PRESENT THEN THE PURCHASES MADE BY THE ASSESSEE CANNOT BE A BOGUS ONE. THEREFORE , IN OUR VIEW, IN THIS CASE WE DECIDE THAT THE PURCHASES IN BOTH THE ASSESSMENT YEARS MADE BY THE ASSESSEE WERE FOUND TO BE GENUINE AND THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE IMPUGNED ADDITIONS OF RS. 4,56,250/ - AND RS. 90, 56,250/ - ON ACCOUNT OF BOGUS PURCHASES FOR ASSESSMENT YEARS 2006 - 07 AND 2007 - 08 RESPECTIVELY. 5. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE GROUNDS RAISED BY THE ASSESSEE ARE REQUIRED TO BE ALLOWED IN FAVOUR OF THE ASSESSEE. WE ORDER ACCOR DINGLY. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOU NCED IN THE OPEN COURT ON 23 RD SEPTEMBER, 2016. SD/ - SD/ - ( RAVISH SOOD ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 23 .09.2016 . . ./ OKK , SR. PS 3 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI