M/s. Babji Oil Mill Pvt. Ltd., Ranekpar, Tal. Wakaner, Dist. Morbi V. The Deputy Commissioner Of Income Tax, Morbi Circle, , Morbi

ITA 143/RJT/2018

AI Insights

The case involves M/s. Babji Oil Mill Pvt. Ltd., which appealed against the order of the CIT(A)-3, Rajkot, confirming substantial additions to their income for the Assessment Year 2013-14. The additions included Rs. 22,70,000 treated as unexplained cash credit under section 68 of the Income Tax Act, and Rs. 3,17,87,900 for unexplained/bogus purchases. The assessee argued that they were not given adequate opportunity to present their case at the assessment and appellate stages. The tribunal decided to remand the case back to the CIT(Appeals) to allow the assessee to substantiate their claims with appropriate evidence.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 138332 (ITAT-RAJKOT)
• Duration Of Justice: 4 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 07-02-2023
• Assessment Year: 2013-2014
• Appeal Filed On: 09-04-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained cash credit
• Section: 68; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH VIRTUAL COURT ] Before: Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member M/s. Babji Oil Mill Pv t. Ltd ., 8-Am, Nation al Highway Ro ad, Nr. Krish na Petro l Pump, Survey No. 84, Ranek par, Village, Post Dhuva, Tal. Wankaner PAN: AAECB313 4B (Appellant) Vs Dy . CIT, Morbi Circle, Morbi (Resp ondent) Asses see by : Written Submis sion Revenue by : Shri S hramdeep Sinha , Sr. D. R. Date of hearing : 08-02 -2023 Date of pronouncement : 15-02-2023 आदेश/ORDER PER : SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER:- This assessee’s appeal for A.Y. 2013-14, arises from order of the CIT(A)-3, Rajkot dated 16-02-2018, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”. ITA No. 143/Rjt/2018 Assessment Year 2013-14 I.T.A No. 143/Rjt/2018 A.Y. 2013-14 Page No M/s. Babji Oil Mill Pvt. Ltd. vs. Dy. CIT 2 2. The assessee has taken the following grounds of appeal: “1. The Ld. CIT(A) has erred in law and facts confirming addition of an amount of Rs. 3,40,57,900/-. The addition needs deletion. 2. The Ld. CIT(A) has erred in law and facts confirming addition of an amount of Rs. 22,70,000/- treating the same as unexplained cash credit. The addition needs deletion. 3. The Ld. CIT(A) has erred in law and facts confirming addition of an amount of Rs. 3,17,87,900/- treating the same as unexplained 7 bogus purchase. The addition needs deletion. 4. Taking into consideration the legal, statutory, factual, accounting and administrative aspects, no addition amounting to Rs. 22,70,0007- and Rs. 3,17,87,900/- ought to have been confirmed. The addition needs deletion. 5. Without prejudice, the assessment made is bad in law and deserves annulment. 6. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided at the time of assessment stage. The assessment needs annulment. 7. Without prejudice, no adequate, sufficient and reasonable opportunity has been provided at the time of appellate stage. The assessment needs annulment. 8. The appellant craves leave to add/alter/amend and/or substitute any or all ground of appeal before the actual hearing takes place.” 3. The brief facts of the case are that the assessee filed return of income declaring income of 18,46,840/ -. The AO passed the assessment order making total addition of 3,40,57,900/- comprising of: (a) 22,70,000/- by treating the deposit credited as unexplained cash credit under section 68 of the Act and (b) another addition of 3,1 7,87,900/- on the ground that the same pertains to unexplained/bogus purchases. 4. The assessee filed appeal before Ld. CIT(Appeals), but none appeared before the Ld. CIT(Appeals) in the appellate proceedings. Accordingly, Ld. I.T.A No. 143/Rjt/2018 A.Y. 2013-14 Page No M/s. Babji Oil Mill Pvt. Ltd. vs. Dy. CIT 3 CIT(Appeals),on the basis of material on record and on the basis of written submissions filed by the authorised representative of the assessee, confirmed the additions made by the AO. As regards the addition of 2,270,000/- under section 68 of the act, Ld. CIT(Appeals) confirmed the addition on the ground that in the appellate proceedings, the assessee has furnished no evidence to establish the identity, creditworthiness and genuineness of the transaction. With respect to the disallowance of unexplained purchases of 3,17,87,990/-, Ld. CIT(Appeals) observed that the assessee could not provide any address of the aforesaid purchase party and the said purchases remained unverified. Therefore, since even in the appellate stage, the assessee is not in a position to substantiate the veracity of these purchases, the addition on account of unverifiable purchases was confirmed by Ld. CIT(Appeals). 5. Before us, the counsel for the assessee submitted that in the proceedings before Ld. CIT(Appeals), the assessee could not cause appearance and present its case on merits. The counsel for the assessee submitted that if given an opportunity, the assessee is in a position to suitably demonstrate the genuineness of the deposits which have been confirmed under section 68 of the Act and also the genuineness of the purchases, which have been added to the income of the assessee as unverified purchases. In response, DR relied upon the observations made by Ld. CIT(Appeals) in the appellate order. 6. We have heard the rival contentions and perused the material on record. Before us, the counsel for the assessee submitted that the assessee I.T.A No. 143/Rjt/2018 A.Y. 2013-14 Page No M/s. Babji Oil Mill Pvt. Ltd. vs. Dy. CIT 4 could not appear before the ld. CIT(A) and if given an opportunity, he would adequately demonstrate the genuineness of transactions in respect of which the additions have been made. Accordingly, considering the quantum of additions made, in the interest of justice, we are restoring the file to the Ld. CIT(Appeals) so as to enable the assessee to give the necessary supporting/evidence with respect to the aforesaid additions. 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 15-02-2023 Sd/- Sd/- (WASEEM AHMED) (SIDHHARTHA NAUTIYAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad : Dated 15/02/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order, Assistant Registrar, Income Tax Appellate Tribunal, Rajkot