M/s. Shah Foils Pvt. Ltd., Ahmedabad V. The DCIT, Circle-8, Ahmedabad

ITA 1311/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6073 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 20-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 05-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRA SOON KABRA HEARING CONCLUD
• Assessee Lawyers: K C THAKER
• Keywords: Reopening of assessment; Unexplained cash credit; Validity of assessment; Reassessment proceedings
• Section: 40A(3); 143(3)

Judgement Text

ITA NO. 1311 / AHD/201 4 ASSESSMENT Y EAR: 20 0 6 - 07 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH, AHMEDABAD [CORAM: PRAMOD KUMAR AM AND S S GODARA JM] ITA NO. 1311 /AHD/201 4 ASSESSMENT Y EAR : 20 0 6 - 07 SHAH FOILS PVT. LTD. ..... .......... . APPELLANT 26, BLOCK - B, GALAXY SIGNATURE, SCIENCE CITY ROAD,SOLA, AHMEDABAD 360 060. [PAN: A AICS 04 90 F ] VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE - 8, AHMEDABAD. .. ......... RESPONDENT APPEARANCES BY K.C. THAKER FOR THE A PPELLANT PRASOON KABRA FOR THE R E SPONDENT HEA RING CONCLUDED ON: 20.04. 2017 ORDER PRONOUNCED ON : 28 . 0 4 .2017 O R D E R PER PRAMOD KUMAR , AM: 1. BY WAY OF THIS APPEAL, THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER DATED 12 TH FEBRUARY 2013, PASSED BY THE LEARNED CIT( A) , IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961, FOR THE ASSESSMENT YEAR 20 0 6 - 07 . 2. IN THE FIRST GROUND OF APPEAL , THE ASSESSEE HAS RAISED THE FOLLOWING GRIEVANCE AGAINST LEARNED CIT(A) S UPHOLDING VALIDITY OF R EASSESSMENT PROCEEDINGS : - 1. THE LEARNED CIT ( A ) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE REOPENING PROCEEDINGS UNDER SECTION 147 ARE JUSTIFIED AND IN DISMISSING THE GROUND CONTESTING THE SAME AND THE VALIDITY OF ASSESSMENT MADE IN PURSUANCE OF SUCH PROCEEDINGS. ITA NO. 1311 / AHD/201 4 ASSESSMENT Y EAR: 20 0 6 - 07 PAGE 2 OF 8 3. LEARNED REPRESENTATIVES SUBMIT THAT THE REASONS FOR REOPENING THE ASSESSMENT IN THIS CASE ARE MATERIALLY THE SAME AS FOR THE ASSESSMENT YEAR 2005 - 06 WHICH WAS HEARD ALONG WITH THIS APPEAL, AND, THEREFORE, WHATEVER IS DECIDED IN THE ASSESSMENT YEAR 2005 - 06 ON THIS ISSUE WILL APPLY MUTATIS MUTANDIS ON THIS ASSESSMENT YEAR A S WELL . THESE REASONS, AS REPRODUCED AT PAGE 2 OF T HE IMPUGNED ASSESSMENT YEAR, ARE AS FOLLOWS : - 'THE ASSESSES COMPANY, ENGAGED IN THE BUSINESS OF MANUFACTURING OF COLD ROLLED STAINLESS STEEL CO I LS, FILED ITS RETURN OF INCOME FOR THE A.Y. 2006 - 07 ON 11/12/2006 DECLARING TOTAL INCOME AT RS. 9085979. I T IS PERTINENT TO MENTION HERE THAT AN ACTION WAS CARRIED OUT BY DGCEL, V API AT THE PREMISE OF M/S. H. K. I MPEX PVT. LTD., UMBERGAON , GUJARAT AND CONSEQU ENTLY AT THE FACTORY PREMISE OF M/S. SHAH FOILS PVT. LTD. AT SANTEJ, KALOL AND AM TRANSPORT SERVICES, AHMEDABAD DURING THE COURSE OF STATEMENT. DIRECTO R OF THE A SSESSEE COMPANY SHRI KARTIK SHAH SUBMITTED THAT T HE GOODS WERE BEING TRANSPO RTED FROM THEIR FACTORY PREMISE AT SANTEJ TO VASAI/BHAYANDER, MAHARASHTRA INSTEAD OF DESTINATION MENTIONED ON THE INVOICE AND THE LR BEING THE FACTORY PREMISES OF M/S. H.K IMPEX PVT. LTD. UMBERGAON, GUJARAT. FROM THE ABOVE DISCUS SION, IT IS CLEAR THAT THE ASSESSEE COMPANY BY RESORTING TO UNACCOUNTED SALES TO VARIOUS PARTIES VASAI/BHYANADER WAS INVOLVED IN THE TAX EVASION DURING THE ASSESSMENT YEAR 20 06 - 07 . AS PER THE COPIES OF LEDGER ACCOUNTS, THE PURCHASES AMOUNTING TO RS . 521651 58 FOR A Y 2006 - 07 HAVE BEEN SHOWN BY M/S H. K. IMPEX PVT LTD FROM THE ASSESS WHICH IS THE UNACCOUNTED SALES OF THE ASSESSEE COMPANY. SINCE, THE UNACCOUNTED SALES AS NARRATED ABOVE HAS NOT BEEN SHOWN BY THE ASSESSEE IN THE FADING RESULT FOR A Y 2005 - 06 , THE ASSESSEE S ACTION HAS RESULTED INTO UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS.521651 58/ - FOR THE ASS T. YEAR 2006 - 07 . 4. VIDE OUR ORDER OF EVEN DA T E, WE HAVE QUASHED THE REASSESSMENT PROCEEDINGS, BASED ON SIMILAR REASONS, AND, WHILE DOING SO, HAV E OBSERVED A S FOLLOWS : - 3. TO ADJUDICATE ON THE GRIEVANCE RELATING TO VALIDITY OF REASSESSMENT PROCEEDINGS, ONLY A FEW MATERIAL FACTS NEED TO BE TAKEN NOTE OF. IT IS A CASE OF ASSESSMENT HAVING BEEN REOPENED ON THE BASIS OF FOLLOWING REASONS RECORDED BY THE ASSESSING OFFICER : - 3. THE ASSESSEE COMPANY, ENGAGED IN THE BUSINESS OF MANUFACTURING OF COLD ROLLED STAINLESS STEEL COILS, FILED ITS RETURN OF INCOME FOR THE A.Y. 2005 - 06 ON 30/10/2005 DECLARING TOTAL INCOME AT RS.2851250 THE CASE WAS SELECTED FO R SCRUTINY AND ACCORDINGLY, SCRUTINY ASSESSMENT U/S 143(3) ITA NO. 1311 / AHD/201 4 ASSESSMENT Y EAR: 20 0 6 - 07 PAGE 3 OF 8 WAS COMPLETED ON 20.11.2007 DETERMINING TOTAL INCOME AT RS.2851250. SINCE THE TAX AS PER MAT WAS HIGHER THAN THAT OF THE NORMAL PROVISIONS OF THE IT. ACT, THE INCOME WAS FINALLY DETERMINED AT RS.10 116390 AS PER THE MAT. IT IS PERTINENT TO MENTION HERE THAT AN ACTION WAS CARRIED OUT BY DGCEI. VAPI. AT THE PREMISE OF M/S. H. K. IMPEX PVT. LTD., UMBERGAON , GUJARAT AND CONSEQUENTLY AT THE FACTORY PREMISE OF M/S. SHAH FOILS PVT. LTD. AT SANTEJ, KALOL A ND AMBICA TRANSPORT SERVICES, AHRNEDABAD. DURING THE COURSE OF STATEMENT, DIRECTOR OF ASSESSEE COMPANY SHRI KARTIK SHAH SUBMITTED THAT THE GOODS WERE BEING TRANSPORTED FROM THEIR FACTORY PREMISE AT SANTEJ TO VASAI/BHAYANDER, MAHARASHTRA INSTEAD OF THE DEST INATION MENTIONED ON THE INVOICE AND THE LR BEING THE FACTORY PREMISES OF M/S. H.K. IMPEX PVT. LTD. UMBERGAON, GUJARAT. FROM THE ABOVE DISCUSSION, IT IS CLEAR THAT THE ASSESSEE COMPANY BY RESORTING TO UNACCOUNTED SALES TO VARIOUS PARTIES AT VASAI/BHYANADE R WAS INVOLVED IN THE TAX EVASION DURING THE ASSESSMENT YEAR 2005 - 06. AS PER THE COPIES OF LEDGER ACCOUNTS, THE PURCHASES AMOUNTING TO RS.6972741 FOR A.Y. 2005 - 06 HAVE BEEN SHOWN BY M/S. H. K. IMPEX PVT. LTD. FROM THE ASSESSEE WHICH IS THE UNACCOUNTED SAL ES OF THE ASSESSEE COMPANY. SINCE, THE UNACCOUNTED SALES AS NARRATED ABOVE HAS NOT BEEN SHOWN BY THE ASSESSEE IN THE TRADING RESULT FOR A.Y, 2005 - 06 , THE ASSESSEE'S ACTION HAS RESULTED INTO UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS.6972741/ - FOR THE ASST. YEAR 2005 - 06. 4. THE ASSESSEE DID RAISE GRIEVANCE AGAINST THE REOPENING BUT WITHOUT ANY SUCCESS. THE ASSESSING OFFICER PROCEEDED TO REJECT THE OBJECTION AND TREATED THE SALES TO H.K. IMPEX PVT. LTD. AS UNACCOUNTED SALES BY OBSERVING AS FOLLOWS : - 6. THE SUBMISSIONS OF THE ASSESSEE ARE DULY CONSIDERED. HOWEVER, THE SAME ARE NOT FOUND ACCEPTABLE. AS FAR AS THE OBJECTIONS RAISED AGAINST REOPENING OF ASSESSMENT ARE CONCERNED, THE SAME HAS ALREADY BEEN DISPOSED OFF VIDE LETTER DATED 05.02.2013. DUR ING THE COURSE OF PROCEEDINGS BEFORE DGCEI, SHRI KARTIK SHAH, DIRECTOR OF THE ASSESSEE COMPANY STATED THAT THE GOODS WERE DISPATCHED THROUGH AMTBICA TRANSPORT SERVICES FROM SANTEJ TO VASAI/BHAYANDAR, MAHARASHTRA AND NOT TO FACTORY PREMISE OF M/S. H. K. IMP EX PVT. LTD. AT UMBERGAON, GUJARAT. THIS STATEMENT HAS BEEN CORROBORATED BY THE STATEMENT OF SHRI NILESHBHAI H. SANGHVI, PARTNER OF M/S. AMBICA TRANSPORT SERVICES. SHRI RAMESH M. SHAH, ANOTHER DIRECTOR OF M/S. SHAH FOILS PVT. LTD., ALSO SUPPORTED THE FACTS STATED BY SHRI KARTIK SHAH IN HIS STATEMENT. 7. FROM THE FACTS BROUGHT OUT IN THE FOREGOING PARA, IT BECOMES EVIDENT THAT THE GOODS WERE TRANSPORTED TO CERTAIN PREMISES AT VASAI/BHAYANDAR MAHARASHTRA. FURTHER, AS PER THE FINDINGS GIVEN BY THE ASSESSING OFFICER OF M/S H K IMPEX PVT. LTD. IN THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 OF THE ACT DATED 24/12/2011 FOR A.Y. 2006 - 07, GOODS WERE DELIVERED AT FACTORY PREMISES OF M/.S. H. K IMPEX PVT. LTD.AT UMBERGAON,GUJARAT. THESE TWO FACTS TAKEN TOGETHER LEAD TO THE CONCLUSION ITA NO. 1311 / AHD/201 4 ASSESSMENT Y EAR: 20 0 6 - 07 PAGE 4 OF 8 THAT THE ASSESSEE COMPANY MADE UNACCOUNTED SALES OF RS.69,72,741/ - TO VARIOUS PARTIES AT VASAI/BHAYANDAR. 8. IN ITS SUBMISSION, THE ASSESSEE HAS MERELY RELIED UPON THE AUDITED ACCOUNTS OF RE ASSESSEE AND EXCISE INVOICES/CHALLANS, TRANSP ORT L.R. PAYMENT BY CHEQUE ETC. HOWEVER, THE ENTRIES MADE BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT ARE NOT FULLY RELIABLE. THE STATEMENTS OF DIRECTORS OF THE COMPANY THEMSELVES CONTRADICT THE DETAILS STATED IN INVOICE/CHALLAN, TRANSPORT L R. ETC. AS THEY HA VE STATED THAT THE PLACE OF DESTINATION MENTIONED IN THE CHALLAN IS INCORRECT. FURTHER, PAYMENT BY CHEQUE IN ITSELF IS NOT THE CONCLUSIVE PROOF FOR GENUINENESS OF ANY TRANSACTION. MOREOVER, THE STATEMENTS OF THE DIRECTORS OF THIS COMPANY HAVE BEEN CORROBOR ATED BY THE TRANSPORTER ALSO. THEREFORE, THE SUBMISSIONS MADE BY THE ASSESSEE ARE NOT ACCEPTABLE AND THE SAME ARE HEREBY REJECTED. 9. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAS MADE UNACCOUNTED SALES OF RS.69,72,741/ - DURING THE YEAR UNDER C ONSIDERATION. IT IMPLIES THAT EITHER THE ASSESSEE IS MAKING UNACCOUNTED PRODUCTION OR MAKING PURCHASES IN CASH. EVEN IN CASE OF PURCHASE IN CASH, THE SAME IS NOT AN ALLOWABLE EXPENDITURE UNDER THE PROVISIONS OF SECTION 40A(3) OF THE ACT. THEREFORE, ENTIRE UNACCOUNTED SALES OF RS.69,72,741/ - IS HEREBY ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271(1)(C) ARE INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 5. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BUT WITHOUT AN Y SUCCESS. LEARNED CIT(A) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER, THOUGH AS UNEXPLAINED CREDIT RATHER THAN AS UNACCOUNTED SALES . THE OPERATIVE PORTION OF THE CIT(A) S ORDER IS AS FOLLOWS : - 6. I HAVE GONE THROUGH THE ASSESSMENT ORDER AN D SUBMISSIONS OF THE A.R. OF THE APPELLANT CAREFULLY. IT IS SEEN THAT THE ASSESSING OFFICER HAS MENTIONED IN DETAIL ABOUT THE INQUIRIES CONDUCTED BY DGCEI WHEREIN IT HAS BEEN ESTABLISHED THAT THE GOODS HAVE NOT BEEN DELIVERED TO M/S. H.K. IMPLEX PVT. LTD. THUS, THE SALES TRANSACTIONS SHOWN BY THE APPELLANT BECAME QUESTIONABLE. ONCE IT IS HELD THAT THE MONEY DEPOSITED IN THE ACCOUNTS OF THE APPELLANT IS NOT ON ACCOUNT OF GENUINE SALES MADE BY IT, THEN THE SAME REPRESENTS UNEXPLAINED CASH CREDITS IN THE BO OKS OF ACCOUNTS OF THE APPELLANT.' DURING THE COURSE OF APPELLATE PROCEEDINGS, THE A.R. OF THE APPELLANT FILED SUBMISSIONS STATING THAT THE GOODS WERE DELIVERED TO OTHER PERSONS AND NOT M/S. H.K. IMPEX PVT. LTD. ON THE INSTRUCTION OF M/S. H.K. IMPEX PVT. L TD. THUS, THE A.R. OF THE APPELLANT CONTENDED THAT THE SALES OF THE APPELLANT WERE NOT UNACCOUNTED BECAUSE THE DELIVERY TO OTHER PARTIES WERE MADE ON ACCOUNT OF INSTRUCTIONS OF M/S. H.K. IMPEX PVT. LTD. 6.1 VIDE ORDER - SHEET ENTRY DATED 29.10.2013, THE A. R. OF THE APPELLANT WAS ASKED TO FURNISH THE EVIDENCE TO SHOW THAT THE DELIVERY WAS MADE TO PLACE AND OTHER THAN THE FACTORY OF M/S. H.K. IMPEX PVT. LTD. ON THE INSTRUCTIONS OF M/S. H.K. IMPEX PVT. LTD. THE A.R. OF THE APPELLANT WAS ALSO ASKED TO FILE CONF IRMATION OF M / S. H.K. IMPEX PVT. LTD. REGARDING THE ITA NO. 1311 / AHD/201 4 ASSESSMENT Y EAR: 20 0 6 - 07 PAGE 5 OF 8 PURCHASES MADE AND SHOW EVIDENCE OF SALES PROCEEDS RECEIVED FROM M/S. H.K. IRNPEX PVT. LTD. THE CASE WAS ADJOURNED TO 25.11.2013. HOWEVER, NO COMPLIANCE AS WELL AS NO LETTER SEEK ADJOURNMENT HAS BEEN FIL ED BY THE APPELLANT. 6.2 IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE CONTENTION OF THE APPELLANT THAT IT HAD MADE DELIVERY TO OTHER PARTIES AND M/S. H.K. IMPEX PVT. LTD. ON THE INSTRUCTIONS OF M/S. H.K. IMPEX PVT. LTD. ITSELF IS NOT CORRECT. THE ADDITION MADE BY THE ASSESSING OFFICER IS HENCE JUSTIFIED. THE SAME IS CONFIRMED. 6. THE ASSESSEE IS AGGRIEVED AND IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF APPLICABLE LEGAL POSITION. 8. THE VERY FOUNDATIONAL BASIS OF REASONS RECORDED FOR REOPENING THE ASSESSMENT IS THE STATEMENT OF SHRI KARTIK SHAH, A DIRECTOR IN THE ASSESSEE COMPANY, GIVEN BEFORE SR. INTELLIGENCE OFFICER, DIRECTORATE GENERAL OF REVENUE I NTELLIGENCE, VAPI ON 19.06.2007. IT IS ON THIS BASIS THAT THE ASSESSING OFFICER FORMED THE BELIEF THAT THE ASSESSEE HAD MADE UNACCOUNTED SALES. HOWEVER, WHEN WE PERUSED THIS STATEMENT, WE ARE UNABLE TO FIND ANY INDICATION ABOUT UNACCOUNTED SALES. ALL TH AT THIS STATEMENT SHOWS IS THAT THE GOODS SENT BY THE ASSESSEE WAS DELIVERED TO H.K. IMPEX PVT. LTD. WAS DELIVERED AT AN ADDRESS OTHER THAN IT S PREMISES AT GIDC ESTATE, UMBERGAON. IN THIS CONTEXT, FOLLOWING EXTRACTS FROM THE AFORESAID STATEMENT MAY BE RE FERRED TO : - Q - 1. KINDLY EXPLAIN HOW YOU ARRANGE THE TRANSPORTATION OF S.S. COILS FROM YOUR FACTORY TO THE CONSIGNEE S ADDRESS ? ANS: ONCE THE S.S. COILS ARE READY FOR DISPATCH WE CONTACT OUR TRANSPORTER M/S. AMBICA TRANSPORT SERVICES, AHMEDABAD WHO ARR ANGES THE TRUCKS AND THEN GOODS ARE LOADED AND NECESSARY DOCUMENTS LIKE CENTRAL EXCISE INVOICE, GATE PASS & L.R ARE PREPARED. COPY OF INVOICE AND L.R ARE HANDED OVER TO THE TRUCK DRIVER FOR DELIVERY AT CONSIGNEE'S ADDRESS. Q - 2. IN CASE THE GOODS ARE TO B E DELIVERED AT A PLACE OTHER THAN THE CONSIGNEE'S ADDRESS GIVEN IN INVOICE & L.R DO YOU PREPARE ANY DOCUMENT FOR DELIVERY OF GOODS AT OTHER PLACE? ANS: WE DON'T PREPARE ANY SEPARATE STATUTORY DOCUMENT. HOWEVER IF THE CONSIGNEE INSISTS A SEPARATE CHIT/PA PER SLIP INDICATING THE PHONE NUMBER OF THE PERSON TO BE CONTACTED AND DESTINATION AND SAME IS HANDED OVER TO DRIVER TO CALL THE CONCERNED PERSON AFTER REACHING DESTINATION. Q - 3. IN RESPECT OF S.S. COILS SOLD TO M/S. H. K. IMPEX PVT. LTD., C/1/B - 263/2, G1DC ESTATE, UMBERGAON CAN YOU TELL US WHETHER THE S.S. COILS WERE DELIVERED AT UMBERGAON OR AT ANY OTHER PLACE? ITA NO. 1311 / AHD/201 4 ASSESSMENT Y EAR: 20 0 6 - 07 PAGE 6 OF 8 ANS: THOUGH THE CONSIGNEE'S ADDRESS WAS UMBERGAON AS PER THE INVOICE & L.R THE MATERIAL WAS DELIVERED AT VASAI/BHAYANDER AT THE REQUEST OF S HRI DEEPAK AGARWAL, DIRECTOR OF M/S. H. K. IMPEX PVT. LTD. Q - 4. PLEASE EXPLAIN WHERE AND HOW EXACTLY THE S.S. COILS MEANT FOR M/S. H.K. IMPEX PVT. LTD. WERE DELIVERED AT VASAI/BHAYANDER AREA? ANS: THE DRIVER OF TRUCK ON REACHING VASAI USED TO CALL T HE CONCERNED PERSON FROM M/S. H.K. IMPEX PVT. LTD., FOR FARTHER DIRECTION AND BASED ON THE DIRECTION RECEIVED DRIVER USED TO DELIVER THE SPECIFIED QUANTITIES OF S.S. COILS AT DIFFERENT PLACES IN VASAI/BHAYANDER AREA. THIS DELIVERY WAS SUPERVISED BY OUR REP RESENTATIVE SHRI DHIRAJ JAIN WHO IS STATIONED AT VASAI/BHAYANDER. THEREAFTER SHRI DHIRAJ JAIN USED TO MAKE SUITABLE REMARK ON THE REVERSE OF L.R INDICATING THE QUANTITY OF COILS RECEIVED/DELIVERED AND AMOUNT OF VARAI (UNLOADING CHARGES) PAID BY DRIVER. Q - 5. PLEASE SEE THE L.R. NO.12797 DATED 27.12.2005, 12791 DATED 24.12.2005 ISSUED TO M/S. JIGAR PLAST, VASAI WHERE THE FREIGHT RATE IS RS.0.85/KG AND COMPARE THE SAME WITH L.R NO. 12754 DATED 12.12.2005, 12674 DATED 30.11.2005 ISSUED TO M/S. H.K. IMPEX PVT . LTD., UMBERGAON WHERE THE FREIGHT RATE INDICATED IS RS.0.85/KG. THIS MEANS IN BOTH THE CASES THE S.S. COILS WERE DELIVERED AT VASAI AND THIS FACT WAS KNOWN TO THE TRANSPORTER WHILE PREPARING THE L.R S. DO YOU AGREE THAT THE S.S. COILS MEANT FOR M/S. H.K . IMPEX PVT. LTD., UMBERGAON WERE DELIVERED AT VASAI ? ANS: ON GOING THROUGH THE ABOVE L.R S I AGREE THAT THE S.S. COILS MEANT FOR M/S. H.K. IMPEX PVT. LTD., UMBERGAON WERE DELIVERED AT VASAI AS PER THE INSTRUCTION OF SHRI DEEPAK AGARWAL. Q - 6. DOES THAT MEAN THAT M/S. SHAH FOILS PVT. LTD. WAS HAVING AND UNWRITTEN UNDERSTANDING WITH THE M/S. H.K. IMPEX PVT. LTD, REGARDING THE PLACE OF DELIVERY OF S.S. COILS AT VASAI. ANS: SINCE THE SS COILS ARE CLEARED ON PAYMENT OF DUTY AND M/S. H.K. IMPEX PVT LTD WANTED THEM TO BE DELIVERED AT VASAI FOR THEIR OWN REASONS WE HAVE NO OPTION BUT TO COMPLY THEIR INSTRUCTIONS. Q - 7. CAN YOU NAME THE ADDRESSES OF THE UNITS AT VASAI & BHAYANDER AREA WHERE SS COILS PURCHASED BY M/S HK IMPEX PVT. LTD., WERE DELIVERED SINCE THE PL ACES OF DELIVERY WAS KNOWN TO SHRI DHIRAJ JAIN WHO PAID THE VARAI FOR SUCH DELIVERIES? ANS I DO NOT KNOW THE NAMES AND ADDRESSES OF THE UNIT WHERE SS COILS WERE DELIVERED. I KNOW ONLY THAT THEY HAVE BEEN DELIVERED AT VARIOUS LOCATIONS AT VASAI & BHAYAND ER AREA FOR REASONS BETTER KNOWN TO M/S. H.K. IMPEX PVT. LTD. ITA NO. 1311 / AHD/201 4 ASSESSMENT Y EAR: 20 0 6 - 07 PAGE 7 OF 8 9. IN OUR CONSIDERED VIEW, NO REASONABLE PERSON CAN DRAW AN INFERENCE, FROM THE ABOVE STATEMENT, THAT THE SALES ITSELF WAS UNACCOUNTED. ALL THAT THE STATEMENT EVIDENCES WAS THAT DELIVERY WAS GIVEN AT SOME OTHER ADDRESS, OTHER THAN THE PREMISES OF H.K. IMPEX PVT. LTD., AND THAT ASPECT OF THE MATTER WAS RELEVANT FROM THE POINT OF VIEW AS TO WHETHER, FOR EXAMPLE, HK IMPEX PVT. LTD. ACTUALLY EXPORTED THESE GOODS AT ALL OR NOT. IN OUR CONSIDERED V IEW, THEREFORE, THE REASONS RECORDED FOR REOPENING THE ASSESSMENT WERE FACTUALLY INCORRECT. THERE WAS NO LEGALLY SUSTAINABLE BASIS FOR THE ASSESSING OFFICER TO HOLD THE BELIEF THAT THERE WAS ANY UNACCOUNTED SALES. AS A MATTER OF FACT, LEARNED CIT(A) HAS N OT EVEN SUSTAINED THE ADDITIONS AS ON ACCOUNT OF UNACCOUNTED SALES BUT AS UNEXPLAINED CREDITS . THE VERY FOUNDATION OF IMPUGNED REASSESSMENT PROCEEDINGS ARE THUS DEVOID OF LEGALLY SUSTAINABLE MERITS. IN VIEW OF THESE DISCUSSIONS, AS ALSO BEARING IN M IND ENTIRETY OF THE CASE, WE UPHOLD THE PLEA OF THE ASSESSEE AND QUASH THE IMPUGNED REASSESSMENT PROCEEDINGS. 5. WE SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MAT T ER THAN THE VIEW SO TAKEN BY US, ON ADMITTEDLY IDENTICAL FACTS, FOR THE IMMEDIATELY PRECE DING ASSESSMENT YEAR. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE PLEA OF THE ASSESSEE AND QUASH THE IMPUGNED REASSESSMENT PROCEEDINGS . 6. THE ASSESSEE S GRIEVANCES RELATING TO VALIDITY OF REASSESSMENT PROCEEDINGS, I.E. GROUND NOS.1 & 2 ARE THUS UPHEL D. AS THESE GRIEVANCES ARE UPHELD AND THE REASSESSMENT ITSELF IS QUASHED, ALL OTHER GRIEVANCES RAISED BY THE ASSESSEE, ARE RENDERED ACADEMIC AND REQUIRE NO ADJUDICATION AT THIS STAGE. 7. IN THE RESULT, THE APPEAL IS ALLOWED IN THE TERMS INDICATED ABOVE. PRONOUNCED IN THE OPEN COURT ON THIS THE 28 TH DAY OF APRIL , 2017 . SD/ - SD/ - S S GODARA PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: 28 TH DAY OF APRIL , 201 7 . PBN/* ITA NO. 1311 / AHD/201 4 ASSESSMENT Y EAR: 20 0 6 - 07 PAGE 8 OF 8 COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD