ITO, New Delhi V. M/s Kakkar Bartan Store, Delhi

ITA 1277/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7048 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 04-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Reassessment proceedings
• Section: 40A(3); 143(3); 148

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI D BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER, AND S HRI KULDIP SINGH , JUDICIAL MEMBER ITA NO. 1277 /DEL/201 5 [A.Y 20 06 - 07 ] THE I.T . O VS. M/S KAKAKR BARTAN STORE WARD 63 ( 3 ) PROP. SHRI AMIT KUMAR NEW DELHI 5203, SADAR THANA ROAD SADAR BAZAR , DELHI PAN : AFBK 9243 H [APPELLANT] [RESPONDENT] DATE OF HEARING : 1 2 . 0 7 .201 8 DATE OF PRONOUNCEMENT : 1 3 .0 7 .2018 ASSESSEE BY : SHRI VED JAIN , A DV REVENUE BY : S HRI AMIT JAIN , SR. DR ORDER PER N.K. BILLAIYA , ACCOUNTANT MEMBER, T HIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX [APPEALS] XX, NEW DELHI DATED 17 . 1 2 .201 4 PERTAINING TO A.Y 20 06 - 07 . 2 2. THE GRIEVANCE OF THE REVENUE READ AS UNDER: 1. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN RESTRICTING THE ADDITION TO 20% OF ADDITION OF RS.49,36,173/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS PURCHASES. 2. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN REDUCING THE ADDITION TO 20% OF RS. 49,36,173/ - , WHEREAS THE CIT(A) HAS HERSELF ADMITTED THAT THE MATERIAL AND EVIDENCES AVAILABLE ON RECORD EXPOSED THE FALSITY OF THE PURCHASES. 3. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN REDUCING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES WITHOUT APPRECIATING THAT IF A BOGUS ENTRY IS FOUND IN ACCOUNTS, THE SOLUTION THEREOF IS TO REMOVE THAT ENTRY, AS HELD BY HON'BLE ITAT, JAIPUR BENCH IN THE CASE OF KHANDELWAL TRADING CO. VS. ACIT 55 TTJ 261). 4 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN APPLYING THE SPECIFIC PROVISIONS OF SECTION 40A(3) OF THE I.T. ACT FOR REDUCING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES. 5 . IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) HAS ERRED IN OBSERVING THAT THE REJECTION OF BOOKS OF ACCOUNT U/S 145(3) IS NOT UPHELD. 3 3 . BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE IMPUGNED ASSESSMENT ORDER WAS FRAMED U/S 143(3) R.W.S 147 OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT ] '. REOPENING OF THE ASSESSMENT WAS CHALLENGED BEFORE THE FIRST APPELLATE AUTHORITY WITHOUT ANY SUCCESS. 4. THE ORDER OF THE FIRST APPELLATE AUTHORITY WAS CHALLENGED BEFORE THE TRIBUNAL AND THE TRIBUNAL VIDE A CONSOLIDATED ORDER DATED 23.3.2016 , QUASHED THE REOPENING OF THE ASSESSMENT. THE LD. AR SUPPLIED COPY OF THE ORDER OF THE TRIBUNAL. 5. WE FIND THAT THE CO - ORDINATE BENCH IN ITS ORDER [SUPRA] AT PAE 18 PARA 10 HAS HELD AS UNDER: 10. ON CAREFUL CONSIDERATION AND VIGILANT PERUSAL OF THE ORDERS OF THE TRIBUNAL INCLUDING THAT OF THE UNIQUE METAL INDUSTRIES [SUPRA] THE AO HAD RECORDED SIMILARLY WORDED REASONS AND NAME OF THE PARTIES FORM WHICH THE ASSESSEE ALLEGED TO HAVE MADE BOGUS PURCHASES WERE ALSO SAME EXCEPT THE AMOUNT MENTIONED THEREIN IN THE REASONS RECORDED IN THE TABULAR FORM ARE SAME AS IN THE CASE OF THE PRESENT ASSESSEE. THEREFORE, WE HAVE NO ALTE RNATIVE BUT TO FOLLOW THE DECISIONS OF THE TRIBUNAL IN THE CASE OF THE ORDER OF THE TRIBUNAL IN THE 4 CASE OF UNIQUE METAL INDUSTRIES [SUPRA] AND OTHER AS MENTIONED HEREINABOVE. THEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE INITIATION OF REASSESSMENT PROCEEDINGS AS WELL AS ISSUANCE OF NOTICE U/S 148 OF THE ACT WAS NOT VALID AND THE SAME WAS VOID AB INITIO AND THUS WE QUASH THE SAME AND SUBSEQUENTLY THE ASSESSMENT ORDER PASSED IN PURSUANCE THERETO IS ALSO QUASHED. ACCORDINGLY, GROUND NOS. 2 AND 3 OF THE ASSESSEE ARE ALLOWED. 6. SINCE THE REOPENING HAS BEEN QUASHED, NOTHING SURVIVES. 7 . IN THE RESULT, THE APPEAL OF THE REVENUE IN IT A NO. 1277 /DEL/2015 IS DISMISSED . THE ORDER IS PRON OUNCED IN THE OPEN COURT ON 1 3 .0 7 .2018. SD/ - SD/ - [ KULDIP SINGH] [ N.K. BILLAIYA ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 T H JU LY , 2018 VL/ 5 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.PS/PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER