ACIT, C-1, Ludhiana V. M/s Arora Iron & Steel Rolling Mills Pvt. Ltd., Ludhiana

ITA 1291/CHANDI/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 4092 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-03-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 27-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Additional evidence; Set aside; Bogus
• Section: 133(6)

Judgement Text

, , A IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A CHANDIGARH , ! '# $ % & '# , () BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.1291 &1292/CHD/2019 / ASSESSMENT YEAR : 2015-16 & 2016-17 ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1, LUDHIANA. M/S ARORA IRON & STEEL ROLLING MILLS PVT. LTD., NEAR PHASE-VII, FOCAL POINT, DHANDARI KHURD, LUDHIANA. ./PAN NO: AABCA4111E / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING ! /ASSESSEE BY : SHRI ASHRAY SARNA, CA ' ! / REVENUE BY : SMT. C. CHANDRA KANTA,CIT # $ % /DATE OF HEARING : 04.03.2021 &'() % / DATE OF PRONOUNCEMENT : 24.05.2021 (*/ ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEALS HAVE BEEN PREFERRED BY THE REVE NUEAGAINST THE SEPARATE ORDERSDATED 02.07.2019 OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1, LUDHIANA[HEREINAFTER REFERRED TO AS C IT(A)].SINCE THE FACTS AND ISSUES INVOLVED IN BOTH THE APPEALS ARE I DENTICAL, THEREFORE, ITA NO. 1291 &1292-CHD-2019 M/S ARORA IRON & STEEL ROLLING MILLS PVT. LTD., LUD HIANA 2 THESE APPEALS ARE TAKEN TOGETHER FOR ADJUDICATION. FIRST, WE TAKE UP THE REVENUES APPEAL FOR AY 2015-16 BEARING ITA NO.1291 /CHD/2019. 2. IN THIS APPEAL THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION MADE ON ACCOU NT OF UNSECURED LOANS, AND DISALLOWANCE ON ACCOUNT OF UNVERIFIABLE PURCHASES, BY ACCEPTING THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSES, WITHOUT APPRECI ATING THE FACT THAT THE CASE OF THE ASSESSEE DOES NOT FALL UNDER ANY OF THE EXCE PTION LAID DOWN IN RULE 46A(1) OF THE I.T. RULES, 1962? 2.WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN NOT APPRECIATING THE FACTS THAT THE COMPLETE DOCUMENT WERE NOT SUBMITTED AT THE TIME OF ASSESSMENT TO PROVE THE GE NUINENESS OF THE TRANSACTION AND THE DOCUMENTS SUBMITTED AT APPELLATE STAGE WERE NOT CONFRONTED TO THE AO , AND NO REASONABLE OPPORTUNITY BY THE LD. CIT(A) WAS PROVIDED TO THE A.O. AS REQUIRED AS PER RULE 46(A) OF THE IT RULES, 1962? 3. THAT THE ORDER OF THE LD. CIT(A) BE SET ASIDE AN D THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROUND OF APPEAL BEFORE IT IS FINALLY DISPOSED OFF. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS ING OFFICER MADE CERTAIN ADDITIONS ON ACCOUNT OF DISALLOWANCES MADE IN RESPECT UNSECURED LOANS OBTAINED FROM 8 PARTIES AND ON ACCO UNT OF CERTAIN UNVERIFIABLE PURCHASES. THE LD. CIT(A), HOWEVER, DE LETED THE DISALLOWANCES SO MADE BY THE ASSESSING OFFICER IN R ESPECT OF THE UNSECURED LOANS OBSERVING THAT THE ASSESSEE HAD PRO DUCED ENOUGH EVIDENCE ON THE FILE ESTABLISHING THE IDENTITY, CRE DITWORTHINESS OF THE ITA NO. 1291 &1292-CHD-2019 M/S ARORA IRON & STEEL ROLLING MILLS PVT. LTD., LUD HIANA 3 LOAN CREDITORS AS WELL AS THE GENUINENESS OF THE TR ANSACTIONS. FURTHER, THE LD. CIT(A), AFTER APPRECIATING THE EVIDENCES ON THE FILE OBSERVED THAT THE ASSESSING OFFICER WRONGLY OBSERVED THAT TH E PURCHASES WERE BOGUS IN VIEW OF THE SPECIFIC EVIDENCES ADDUCED BY THE ASSESSEE COMPANY IN THIS RESPECT. HE OBSERVED THAT THERE WAS NO RATIONAL ON THE PART OF THE ASSESSING OFFICER IN ACCEPTING THE PURCHASE AND SALE BUT REJECTING THE OUTSTANDING OF SUCH PURCHASE. HE CONCLUDED THAT ON THE FACE OF IT, THE IMPUGNED ADDITION DOES NOT MERI T SUSTENANCE. BEING AGGRIEVED BY THE ABOVE ORDER OF THE CIT(A), T HE REVENUE HAS COME IN APPEAL BEFORE THIS TRIBUNAL. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE RECORD. A PERUSAL OF THE ABOVE REPRODUCED GROUNDS O F APPEAL REVEALS THAT THE DEPARTMENT HAS NOT CHALLENGED THE VALIDITY OF THE ORDER OF THE CIT(A) ON MERITS OF THE ISSUES INVOLVED. THE ON LY GRIEVANCE OF THE DEPARTMENT IS THAT THE LD. CIT(A) HAS ACCEPTED CERTAIN DOCUMENTS AS ADDITIONAL EVIDENCES AND THAT THE ASSE SSEES CASE DOES NOT FALL UNDER ANY OF THE EXCEPTION LAID DOWN UNDER RULE 46 (A) OF THE INCOME TAX RULES 1962. 5. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, HAS S UBMITTED THAT NO NEW EVIDENCES WERE FURNISHED BEFORE THE CIT(A). ALL THE EVIDENCES/DOCUMENTS FURNISHED AND RELIED UPON BEFOR E THE CIT(A) WERE DULY FILED BEFORE THE ASSESSING OFFICER. HOWEV ER, THE ASSESSING OFFICER FAILED TO APPRECIATE THE EVIDENCES FURNISHE D BY THE ASSESSEE ITA NO. 1291 &1292-CHD-2019 M/S ARORA IRON & STEEL ROLLING MILLS PVT. LTD., LUD HIANA 4 AND MADE THE IMPUGNED ADDITIONS IN A MECHANICAL MAN NER. THAT THE LD. CIT(A), HOWEVER, AFTER PROPERLY APPRECIATING TH E EVIDENCES ON THE FILE HAS HELD THAT THE ASSESSEE HAS DULY PROVED THE IDENTITY, CREDITWORTHINESS OF THE CREDITORS AND GENUINENESS O F THE TRANSACTION. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER SUBMIT TED THAT OUT OF THE 8 CREDITORS IN RESPECT OF WHICH THE ADDITIONS WERE MADE BY THE ASSESSING OFFICER, THE OUTSTANDING LOAN HAS BEEN SQ UARED OFF IN RESPECT OF 6 PARTIES AFTER PAYING DUE INTEREST ACCR UED THEREUPON. IN RESPECT OF THE REMAINING 2 PARTIES, THE ASSESSEE HA S REGULAR BUSINESS TRANSACTIONS WITH THEM AND UP-TO-DATE INTEREST HAS BEEN PAID UPON THE CREDIT. IN RESPECT OF THE ISSUE OF BOGUS PURCHASES, THE LD. COUNSEL HAS SUBMITTED THAT THOUGH, PURCHASES AND SALES MADE DURING THE YEAR HAVE BEEN ACCEPTED ALONG WITH TRADE DEBTORS BY THE ASSESSING OFFICER, HOWEVER, CURRENT YEAR CREDITORS HAVE BEEN CONSIDERE D UNEXPLAINED BY HIM WITHOUT ANY BASIS. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAD MADE THE IMPUGNED ADDITIO NS ONLY BECAUSE SOME CREDITORS DID NOT FILE REPLY TO NOTICE UNDER S ECTION 133(6) OF THE ACT, WHEREAS, THE ASSESSEE DURING ASSESSMENT PROCEE DINGS HAD PROVIDED PAN AND ADDRESSES OF ALL THE PARTIES. ON T HE BASIS OF ADDRESSES PROVIDED BY THE ASSESSEE, THE ASSESSING O FFICER HAD BEEN ABLE TO ISSUE NOTICES UNDER SECTION 133(6) OF THE A CT. THE LD. COUNSEL HAS FURTHER SUBMITTED THAT ALL THE NECESSAR Y EVIDENCES LIKE PURCHASE BILLS ALONG WITH THE BANK STATEMENTS ETC. WERE FURNISHED. THE ASSESSEE FURTHERHAD PRODUCED ITS LEDGER ACCOUNT IN THE BOOKS OF ITA NO. 1291 &1292-CHD-2019 M/S ARORA IRON & STEEL ROLLING MILLS PVT. LTD., LUD HIANA 5 RESPECTIVE CREDITORS. THE ASSESSEE PRODUCED BILLS I N RESPECT OF EACH OF THE CREDITORS. ALL THE BANK ACCOUNTS OF THE ASSE SSEE HAD BEEN DULY REFLECTED IN THE BOOKS OF THE ASSESSEE. THE LD. COU NSEL, THEREFORE, HAS SUBMITTED THAT THE LD. CIT(A) AFTER PROPERLY AP PRECIATING ALL THE EVIDENCES ON THE FILE HAS RIGHTLY DELETED THE ADDIT IONS MADE BY THE ASSESSING OFFICER. 6. THE LD. DR COULD NOT REBUT THE ABOVE AVERMENTS MADE BY THE LD. COUNSEL FOR THE ASSESSEE. EVEN THE LD. DR COULD NOT POINT OUT TO ANY ADDITIONAL EVIDENCES ACCEPTED BY THE CIT(A) IN CONTRAVENTION OF THE PROVISIONS OF RULE 46(A) OF THE INCOME TAX RULE S 1962. 7. THE POWERS OF THE CIT(A) ARE COTERMINOUS WITH T HAT OF THE ASSESSING OFFICER. THE LD. CIT(A) AFTER CONSIDERING THE EVIDENCES ON THE FILE HAS DELETED THE IMPUGNED ADDITIONS MADE BY THE ASSESSING OFFICER AND EVEN THE DEPARTMENT HAS NOT ASSAILED TH E FINDINGS OF THE CIT(A) ON MERITS. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THE PRESENT APPEAL OF THE REVENUE AND THE SAME IS ACCORDINGLY DISMISSED. 8. BOTH THE LD. REPRESENTATIVES OF THE PARTIES HAVE SUBMITTED THAT THE FACTS AND ISSUES INVOLVED IN REVENUES APPEAL F OR AY 2016-17 BEARING ITA NO. 1292/CHD/2019 ARE IDENTICAL. IN THI S APPEAL ALSO, THE REVENUE HAS NOT ASSAILED THE FINDINGS OF THE CI T(A) ON MERITS BUT ONLY ACCEPTING OF ADDITIONAL EVIDENCE. OUR FINDINGS ARRIVED AT IN RESPECT OF ITA NO.1291/CHD/2019, THEREFORE, MUTATIS MUTANDIS WILL ITA NO. 1291 &1292-CHD-2019 M/S ARORA IRON & STEEL ROLLING MILLS PVT. LTD., LUD HIANA 6 APPLY TO THIS APPEAL ALSO. IN THE RESULT, BOTH THE CAPTIONED APPEALS OF THE RE VENUE ARE HEREBY DISMISSED. ORDER PRONOUNCED ON 24.05.2021. SD/- SD/- ( $ % & '# / ANNAPURNA GUPTA) () / ACCOUNTANT MEMBER ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 24.05. 2021 SANTOSH . '+ ,-.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , %2 , 34516 / DR, ITAT, CHANDIGARH 6. 157$ / GUARD FILE '+ # / BY ORDER, 8' / ASSISTANT REGISTRAR