The ACIT, Circle-4, Baroda V. M/s. Synbiotics Ltd., Baroda

ITA 1536/AHD/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8014 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 14-06-2017
• Assessment Year: 1993-1994
• Appeal Filed On: 16-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PATHAK JOINT
• Keywords: Bogus purchase; Condonation of delay
• Section: 69C; 68; 154

Judgement Text

ITA NO S . 1536 TO 154 0/AHD/2014 & ITA NOS.2638 TO 2643/AHD/2015 A.Y S . 1992 - 93 TO 1997 - 98 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA , ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD , JUDICIAL MEMBER I TA NO S . 1536, 1537, 1538, 1539 & 1540 /AHD /201 4 ASSESSMENT YEAR S : 1993 - 94, 199 4 - 95 , 1995 - 96, 19 96 - 97, 1997 - 98 ASSTT. COMMISSIONER OF INCOME TAX, VS. M/S. SYNBIOTICS LIMITED, CIRCLE 4, BARODA . WADI WADI, BARODA 390 007. [PAN A ACC S 9831 Q ] I TA NO S . 2638, 2639, 2640, 2641, 2642 & 2643/AHD /201 5 ASSESSMENT YEARS: 1992 - 93, 1993 - 94, 1994 - 95, 1995 - 96, 1996 - 97, 1997 - 98 M/S. SYNBIOTICS LIMITED, VS. ASSTT. COMMISSIONER OF INCOME TAX, WADI WADI, CIRCLE 4, BARODA. BARODA 390 007. [PAN A ACCS 9831 Q ] (APPELLANT S ) (RESPONDENT S ) REVENUE BY : SHRI O.P. PATHAK, JOINT CIT ASSESSEE BY : URVASHI SHODHAN, A.R. DATE OF HEARING : 2 9 . 11 . 20 17 DATE OF PRONOUNCEMENT : 13 . 12 .2017 O R D E R PER BENCH: THE ABOVE CAPTIONED APPEALS ARE CROSS APPEALS BY THE ASSESSEE AND REVENUE PREFERRED AGAINST SEPARATE OR DERS OF THE CIT(A), BARODA PERTAINING TO ASSESSMENT YEARS 1992 - 93, 1993 - 94, 1994 - 95, 1995 - 96, 1996 - 97, 1997 - 98. ALL THESE APPEALS WERE HEARD TOGETHER A ND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENC E AND BREVITY 2. THE COMMON GRIEVANC E RELATES TO THE FINDING OF THE ASSES S ING OFFICER IN RESPECT OF CERTAIN PURCHASE S BEING TREAT E D AS SHAM PURCHASES AND THE RESTRICTION MADE BY THE CIT(A) BY DISALLOWING T HE TOTAL PURCHASES AT 25% THEREBY GIVING RELIEF TO THE ASSESS E E IN RESPECT OF 75% OF TH E TOTAL PURCHAS ES FOR WHICH THE REVENUE IS IN APPEAL BEFORE US AND THE A SSESSEE IS IN APPEAL IN RESP E CT OF THE ADDITION SUSTAINED TO THE EXT E NT OF 25%. ITA NO S . 1536 TO 154 0/AHD/2014 & ITA NOS.2638 TO 2643/AHD/2015 A.Y S . 1992 - 93 TO 1997 - 98 PAGE 2 OF 3 3. THE RELEVANT FACT RELATES TO THE FINDING OF THE ASSESSING OFFICER IN RESPECT OF C ERTAIN PURCHASES WHI CH WAS TREATED AS BOGUS AND ACCORDINGLY ADDITIONS WERE MADE IN RESPECT OF THE TOTAL PURCHASES TREATED AS SUCH . 4 . WE FIND THAT THOUGH THE ASSESSING OFFICER HAS TREATED CERTAIN PURCHASES AS BOGUS PURCHASES BUT AT THE SAME TIME HE HAS ACCEPTED THE CORRESPONDING SALE MADE OUT OF SUCH BOGUS PURCHASES . 5 . FURTHER, THE GENERAL PRINCIPLE OF ACCOUNTING SAYS ALL EXPENSES HAVE TO BE DEBITED AND ALL INCOME HAS T O BE CREDITED AND SINCE THE PURCHASES ARE DEBIT ENTRIES, WE FAIL TO UNDERSTAND HOW A DEBIT ENTRY HAS BEEN TREATED AS INCOME OF THE ASSESSEE. WHEN THE MATTER WAS ASSAILED BEFORE THE CIT(A), T HE FIRST APPELLATE AUTHORITY , A FTER CONSIDERING THE FACTS AND SUBMISSIONS, RESTRICTED THE DISALLOW ANCE TO 25% OF THE PURCHASES. 6 . WE FIND THAT AN IDENTICAL ISSUE WAS CONSIDERED BY T HE HON BLE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF N . K . INDUSTRIES LIMITED VS. DCIT , 292 CTR 354 (GUJ) AND THE RELEVANT FINDINGS OF THE HON BLE JURISDICTIONAL HIGH COURT READ AS UNDER : - 6. THE TRIBUNAL IN THE C ASE OF VIJAY PROTEINS LTD . (SUP RA) HAS OBSERVED THAT IT WOULD BE JUST AND PROPER T O DIRECT THE A SSESSING OFFICER T O RESTRICT THE ADDITION IN RESPECT O F THE UNDISCLOSED INCOME RELATING TO THE PURCHASE TO 25% OF THE TOTAL PURCHASES . THE SAID DECISION WAS CONFIRMED BY THIS COURT AS WELL. ON CONSIDERATION OF THE MATTER , WE FIND THAT FACTS OF THE PRESENT CASE ARE IDENTICAL TO THOSE OF M/S. INDIAN WO O LEN CARPET FACTORY (SUPRA) OR VIJAY PROTEINS LTD . (SUPRA). IN THE PRESENT CASE THE TRIBUNAL HAS CATEGORICALLY OBSERVED THAT THE ASSESSEE HAD S HOWN BOGUS PURCHASES AMOUNTING TO RS. 2,92,93,288/ - AND TAXING ONL Y 25 % OF THESE B OGUS CLAIM GOES AGAINST THE PRINCIPLES OF SECTIONS 68 AND 69C OF THE INCOME T AX ACT. THE ENTIRE PURCHASES SHOWN ON THE BASIS OF FICTITIOUS INVOICES HAVE BEEN DEBITED IN THE TR ADING ACCOUNT SINCE THE TRANSACTION HAS BEEN FOUND TO BE BOGUS. THE TRIBUNAL HAVING ONCE COME TO A CATEGORICAL FINDING THAT THE AMOUNT OF RS. 2,92,93,288/ - REPRESENTED ALLEGED PURCHASES FROM BOGUS SUPPLIERS IT WAS NOT INCUMBENT ON IT TO RESTRICT T HE DISALLO WANCE TO ONL Y RS. 73, 23 ,322/ - . 7 . AS NO DISTINGUISHING DECISION HAS BEEN BROUGHT ON RECORD IN FAVOUR OF TH E REVENUE AND F INDING PARITY IN FACTS WITH THE FACTS CONSIDERED BY HON BLE JURISDICTIONAL HIGH COURT (SUP RA ), WE DECLINE TO INTERFERE WITH THE FINDIN GS OF THE CIT(A) IN RESTRICTING THE ADDITION/ DISALLOWANCES TO 25% OF THE BOGUS PURCHASE . ITA NO S . 1536 TO 154 0/AHD/2014 & ITA NOS.2638 TO 2643/AHD/2015 A.Y S . 1992 - 93 TO 1997 - 98 PAGE 3 OF 3 8 . ALL THE APPEALS BY REVENUE ARE ACCORDINGLY DISMISSED. 9. COMING TO THE APPEA L S FILED BY THE ASSESSEE, WE FIND THAT THER E IS A DELAY OF MORE TH A N A YEAR IN ALL THE A PPEALS. THE ASSESSEE HAS NEITHER FILED ANY FORMAL REQUEST FOR CONDONATION OF DELAY IN FILING THE APPEAL S NOR IT HAS FOLLOWED THE RULES PRESCRIBED FOR SEEKING CONDONATION OF DELAY. 10. ALL THE APP E ALS BY THE ASSESSEE ARE ACCORDINGLY DISMISSED. 11 . IN T HE RESULT, ALL THE APPEALS FILED BY THE REVENUE AND ALL THE APPEALS FILED BY THE ASSESSEE ARE DISMISSED. ( OR DER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF DECEMBER , 2017 ) SD/ - SD/ - MAHAVIR PRASAD N.K. BILLAIYA ( JUDICIAL MEMBER) ( ACCOUNTANT MEMBER) AHMEDABAD, THE 13 TH DAY OF DECEMBER , 201 7 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD F ILE BY ORDER E COPY ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD