M/s. Anubhav Enterprises, Pune V. Tax Recovery Officer, Pune

ITA 1310/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0099 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 23-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N ASHOK BABU
• Keywords: Reopening of assessment; Bogus purchase; Accommodation entries; Reassessment proceedings
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1310 /PUN/201 7 / ASSESSMENT YEAR : 20 07 - 08 M/S. ANUBHAV ENTERPRISES, B/10, 2 ND FLOOR, SHANGRILA GARDEN, PUNE 411001 PAN : AAGFA0236L ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, RANGE 2, PUNE / RESPONDENT ASSESSEE BY : SHRI BHARAT SHAH REVENUE BY : SHRI N. ASHOK BABU / DATE OF HEARING : 28 - 08 - 2019 / DATE OF PRONOUNCEMENT : 20 - 0 9 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - 5, PUNE DATED 27 - 02 - 2017 FOR THE ASSESSMENT YEAR 20 07 - 08. 2 ITA NO . 1310/PUN/2017, A.Y. 2007 - 08 2. THE ASSESSEE IN APPEAL HAS RAISED TWO GROUNDS. IN GROUND NO. 1 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED REOPENING OF ASSESSMENT U/S. 148 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). IN GROUND NO. 2 OF THE APPEAL, THE ASSESSEE HAS ASSAILED CONFIRMING OF ADDITION RS.62,45,193/ - ON ACCOUNT OF ALLEGED BOGUS PURCHASES FROM M/S. ESSELJAY STEEL PVT. LTD. AND ALSO PAYMENT OF COMMIS SION RS.12,490/ - . 3. SHRI BHARAT SHAH APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT HE IS NOT PRESSING GROUND NO. 1 OF THE APPEAL. 3.1 IN RESPECT OF GROUND NO. 2, THE LD. AR CONTENDED THAT THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN TRADING OF S TEEL, TMT BARS, CHANNELS, ETC. THE ASSESSEE HAD PURCHASED RAW MATERIAL FROM M/S. ESSELJAY STEEL PVT. LTD. AND HAD MADE PAYMENTS TO THE SUPPLIER BY ACCOUNT PAYEE CHEQUE. THE BOOKS OF THE ASSESSEE WERE SUBJECT TO AUDIT. THE ASSESSING OFFIC ER MADE ADDITION OF THE ENTIRE PURCHASES MADE BY ASSESSEE FROM M/S. ESSELJAY STEEL PVT. LTD. HOLDING IT TO BE BOGUS. THE ASSESSING OFFICER WHILE MAKING ADDITION IN REASSESSMENT PROCEEDINGS NEVER REJECTED THE BOOKS OF ASSESSEE. FURTHER, THE ASSESSING OFFI CER HAS NEVER RAISED DOUBT OVER THE SALES DECLARED BY THE ASSESSEE. THE ADDITION HAS BEEN MADE MERELY ON THE BASIS OF STATEMENT OF SHRI AJAY JINDAL, DIRECTOR OF M/S. ESSELJAY STEEL PVT. LTD. HIS STATEMENT WAS RECORDED AT THE BACK OF ASSESSEE. THE ASSESSEE WAS NEVER GRANTED OPPORTUNITY TO CROSS - EXAMINE SHRI AJAY JINDAL EITHER IN REASSESSMENT PROCEEDINGS OR DURING THE FIRST APPELLATE PROCEEDINGS, THOUGH, THE ASSESSEE HAD SPECIFICALLY ASKED FOR THE SAME. THE LD. AR SUBMITTED THAT THE PURCHASES MADE B Y THE ASSESSEE WERE GENUINE. THE LD. AR FURTHER CONTENDED THAT THE TRIBUNAL IN THE CASE OF M/S. CHHABI ELECTRICALS PVT. LTD. VS. DY. COMMISSIONER OF INCOME TAX IN ITA NO. 3 ITA NO . 1310/PUN/2017, A.Y. 2007 - 08 795/PUN/2014 FOR ASSESSMENT YEAR 2010 - 11 DECIDED ON 28 - 04 - 2017 AND VARIOUS OTHER DEC ISIONS HAS TAKEN CONSISTENT VIEW OF CONFIRMING ADDITION TO THE EXTENT OF 10% OF SUCH BOGUS PURCHASES. 4. ON THE OTHER HAND SHRI N. ASHOK BABU REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT THE ASSESSEE HAS NOT SHOWN TRAIL OF GOODS. THE DIRECTOR OF M/S. ESSELJAY STEEL PVT. LTD. IN HIS STATEMENT HAD ADMITTED TO HAVE PROVIDE D ACCOMMODATION ENTRIES TO THE ASSESSEE AND CHARGE COMMISSION @ 0.2% ON SUCH BOGUS TRANSACTIONS. THE LD. DR PRAYED FOR DISMISSING THE AP PEAL BY ASSESSEE. 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. THE LD. AR OF THE ASSESSEE STATED AT THE BAR THAT HE IS NOT PRESSING GROUND NO. 1. THE SAME IS DISMISSED AS NOT PRESSED , ACCORDINGLY . 6. IT IS ALLEGED THAT THE ASSESSE E HAS INDULGED IN PROCURING BOGUS BILLS FROM M/S. ESSELJAY STEEL PVT. LTD. TO THE TUNE OF RS.62,45,193/ - AND HAS FURTHER PAID COMMISSION @ 0.2% FOR GETTING ACCOMMODATION ENTRIES. UNDISPUTEDLY, THE SALES TURNOVER DECLARED BY THE ASSESSEE IS NOT DISPUTE D B Y THE REVENUE. WITHOUT PURCHASES THERE CANNOT BE SALES. THE ASSESSEE MAY NOT HAVE PURCHASED GOODS FROM M/S. ESSELJAY STEEL PVT. LTD. , HOWEVER, POSSIBILITY OF GOODS BEING PURCHASED FROM GRAY MARKET AND PROCURING BOGUS BILLS FROM M/S. ESSELJAY STEEL PVT. L TD. CANNOT BE RULED OUT. UNDER SUCH CIRCUMSTANCES , THE ENTIRE ALLEGED BOGUS PURCHASES CANNOT BE ADDED. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, WE ARE OF CONSIDERED VIEW THAT ADDITION OF 10% OF SUCH BOGUS PURCHASES OVER AND ABOVE THE GP ALREADY DECLA RED BY THE ASSESSEE WOULD MEET THE ENDS OF JUSTICE. WE HOLD AND 4 ITA NO . 1310/PUN/2017, A.Y. 2007 - 08 DIRECT ACCORDINGLY. THE GROUND NO. 2 OF THE APPEAL IS PARTLY ALLOWED IN THE TERMS AFORESAID. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF SEPTEMBER, 2019. SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 20 TH SEPTEMBER, 2019 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 5, PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 4, PUNE 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE