SHRI DWARKA PRASAD GUPTA , JAIPUR V. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-6, JAIPUR

ITA 1455/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5748 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-03-2019
• Assessment Year: 2014-2015
• Appeal Filed On: 17-12-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: POONAM ROY DCIT DHK
• Section: 143(3); 133(6)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA , ACCOUNTANT MEMBER VK;DJ VIHY LA -@ ITA NO. 1455/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2014-15 DWARKA PRASAD GUPTA, S-5, MAHAVEER NAGAR, TONK ROAD, JAIPUR-302018. CUKE VS. A.C.I.T., CIRCLE-6, JAIPUR. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: AARPG 2174 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI SURENDRA SHAH (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. POONAM ROY (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/05/2019 MN?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 08/05/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A), AJMER DATED 16/10/2018 FOR THE A.Y. 2014-15 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT), WHEREIN ADDITION OF RS. 7,57,999/- WAS CONFIRMED BY THE LD. CIT(A) U/S 41 OF THE ACT. ITA 1455/JP/2018 DWARKA PD. GUPTA VS ACIT 2 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A TRADER AND EXPORTER OF GEM STONES. IN THE BOOK OF ASSESSEE, FOLLOWING CREDITORS WERE OUTSTANDING FOR A LONG TIME : NAME OF CREDITOR AMOUNT ABHISHEK ENTERPRISES 1,00,000.00 SWAPAN SHREE JEWELS 6,57,999.00 WHILE COMPLETING ASSESSMENT FOR AY 2014-15, THE AO HELD THAT THE ABOVE CREDITORS ARE NOT GENUINE AND ADDED THE ABOVE SUM OF RS 757999.00 U/S 41 OF THE ACT. 3. BY THE IMPUGNED ORDER, THE LD. CIT(A) HAS CONFIRMED THE ACTION OF THE A.O., AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE ITAT. 4. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THE ASSESSEE HAD PURCHASED GOODS FROM THE ABOVE PARTIES IN EARLIER YEARS AND PAYMENT WAS OUTSTANDING AGAINST THESE BILLS. IN THE LINE OF GEMS STONES BUSINESS CARRIED ON BY THE ASSESSEE COMPANY, THE LOCAL PURCHASES ARE GENERALLY MADE THROUGH THE HELP OF BROKERS. THEY BRING THE GOODS TO THE PURCHASER FOR THEIR APPROVAL AND ALSO NEGOTIATES THE PRICES ON BEHALF OF THE SELLER. AFTER THE GOODS ARE APPROVED AND RATES ARE FINALIZED, THE BROKERS WHO ACT AS MIDDLEMAN BRING THE GOODS WITH THE BILLS FOR PAYMENT. THE PAYMENTS ARE ALSO COLLECTED BY BROKER ON BEHALF OF THE SUPPLIER. IN SUCH TRANSACTIONS ITA 1455/JP/2018 DWARKA PD. GUPTA VS ACIT 3 OF PURCHASE IN THIS LINE OF BUSINESS, THERE REMAINS NO DIRECT CONTACT WITH THE SUPPLIER. HE FURTHER CONTENDED THAT THE AMOUNT IS STILL OUTSTANDING AND YET TO BE PAID, THEREFORE, THE A.O. WAS NOT JUSTIFIED IN TREATING THE AMOUNT AS SEIZED LIABILITY AND ADDED THE SAME U/S 41(1) OF THE ACT. 5. ON THE OTHER HAND, THE LD DR HAS VEHEMENTLY ARGUED THAT T HE LIABILITY IS PENDING SINCE MORE THAN THREE YEARS AND NO REPAYMENT HAS BEEN SHOWN DURING THESE YEARS. THE ASSESSEE HAS ALSO ACCEPTED THAT THE CREDITORS ARE NOT TRACEABLE. THUS, BY HIS OWN ADMISSION THERE IS NO REASON TO RECOVER THE PENDING DUES. SHE FURTHER ARGUED THAT THE CREDITORS WERE NOT GENUINE IN SO FAR AS THE ASSESSEE HAS EVEN NOT SUPPLIED THE ADDRESS, PAN NUMBER AND WHEREABOUTS OF THE CREDITORS. NO CONFIRMATION WAS FILED TO ESTABLISH THAT THE CREDIT STILL CONTINUES. UNDER THESE FACTS AND CIRCUMSTANCES, THE A.O. WAS JUSTIFIED IN ADDING THE SAME IN ASSESSEES INCOME. 6. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. FROM THE RECORD I FOUND THAT DURING THE COURSE OF SCRUTINY ASSESSMENT, THE A.O. FOUND THAT THE CREDIT PURCHASES MADE FROM M/S ABHISHEK ENTERPRISES, JAIPUR AND M/S SWAPAN SHREE JEWELS, JAIPUR WAS ITA 1455/JP/2018 DWARKA PD. GUPTA VS ACIT 4 OUTSTANDING SINCE LONG BACK. THE A.O. ISSUED NOTICE U/S 133(6) OF THE ACT DATED 08/8/2016 TO BOTH THE PARTIES. THE NOTICE SO ISSUED WAS RETURNED BACK WITH REMARK OF POST AUTHORITIES THAT THE ADDRESS MENTIONED IS A VACANT PLOT AND LEFT RESPECTIVELY. THEREFORE, VIDE SHOW CAUSE DATED 17.08.2016, THE ASSESSEE WAS ASKED TO EXPLAIN WHY ADDITION OF RS. 7,57,999/- (RS. 1,00,000/- + RS. 6,57,999/-) BE NOT MADE ON ACCOUNT OF UNVERIFIABLE CREDIT. HOWEVER, THE ASSESSEE COULD NOT SUBSTANTIATE THE SAME AND PRODUCE ANY EVIDENCE TO SUPPORT THAT LIABILITIES IS STILL CONTINUING. MOREOVER, THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE TO EVEN PROVIDE CORRECT ADDRESS OF THE CREDITORS AND THEIR PAN NUMBERS CLEARLY SUPPORT THE CONTENTION OF LD. DR THAT THE SAME ARE NOT GENUINE. THE ASSESSEE HAS ALSO ACCEPTED THAT BOTH THESE PARTIES ARE NOT TRACEABLE. EVEN TILL DATE OF HEARING, NO PAYMENT HAS BEEN MADE BY THE ASSESSEE TO ANY OF THESE PARTIES. THE ASSESSEE HAS FAILED TO FURNISH ANY EVIDENCE TO SHOW THAT THE CREDIT APPEARING IN THE NAME OF M/S ABHISHEK ENTERPRISES (RS. 1 LAC) AND M/S SWAPAN SHREE JEWELS (RS. 6,57,999) IS GENUINE AND PAYABLE TO THESE PERSONS. UNDER THESE FACTS AND CIRCUMSTANCES, I AM INCLINED TO AGREE WITH THE LD. DR SMT. POONAM ROY THAT THE CREDITORS WERE NOT GENUINE AND THE A.O. WAS JUSTIFIED IN ADDING ITA 1455/JP/2018 DWARKA PD. GUPTA VS ACIT 5 THE SAME U/S 41(1) OF THE ACT. ACCORDINGLY, I UPHOLD THE ADDITION SO MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A). 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08 TH MAY, 2019. SD/- JES'K LH 'KEKZ ( RAMESH C SHARMA ) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:-08 TH MAY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI DWARKA PRASAD GUPTA, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE A.C.I.T., CIRCLE-6, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1455/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR