Shri Anil Gaherilal Duggad, Ahmedabad V. The CIT (A)-6, Ahmedabad

ITA 1601/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2778 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 28-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Assessee Lawyers: G C PIPARA
• Section: 271(1)(c); 143(3); 72; 147; 68; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I KUL BHARAT , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER REKHA ANIL DUGGAD, J - 301, NEELKANTH PARK - 1, GHODA CAMP ROAD, SHAIBAUG, AHMEDABAD - 380004 PAN: AHSPD6134B (APPELLANT) VS THE DY. CIT , WARD - 6 ( 1 ) , AHMEDABAD - 380006 (RESPONDENT) ANIL GAHERILAL DUGGAD, J - 301, NEELKANTH PARK - 1, GHODA CAMP ROAD, SHAIBAUG, AHMEDABAD - 380004 PAN: AELPD5832J (APPELLANT) VS THE DY. CIT , WARD - 6( 1 ) , AHMEDABAD - 380006 (RESPONDENT) REVENUE BY : S H RI N.K.GOEL , SR. D . R. ASSESSEE BY: SHRI G.C. PIPARA , A.R. DATE OF HEARING : 26 - 0 2 - 2 020 DATE OF PRONOUNCEMENT : 28 - 02 - 2 020 / ORDER I T A NO S . 1180 & 1603 / A HD/20 18 A SS ESSMENT YEAR 2011 - 12 ITA NO S . 1601, 1602 & 1181 /AHD/ 20 18 ASS ESSMENT YEAR 2008 - 09 & 2011 - 12 I.T.A NO S. 1601, 1180, 1181, 1602 & 1603 /AHD/20 18 A.Y. 2008 - 09 & 2011 - 12 PAGE NO SHRI ANIL G. GUGGAD & SMT. REKHA A. GUGGAD VS. DY. CIT 2 P ER BENCH : - ALL THESE FIVE APPEALS PERTAINING TO DIFFERENT ASSESSEES ARE FILED AGAINST THE DECISION OF LD. CIT(A) - 6, AHMEDABAD IN CONFIRMING THE ADDITIONS MADE BY THE ASS ESSING OFFICER ON ACCOUNT OF BOGUS LIABILITY, ESTIMATION OF GROSS PROFIT AND SUSTAINING OF PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT ON THE ADDITION MADE BY THE ASSESSING OFFICER. SINCE SIMILAR ISSUE S AND IDENTICAL FACTS ARE INVOLVED IN ALL THESE APPEALS, THEREFORE, FOR THE SAKE OF CONVENIENCE, ALL TH ESE APPEALS ARE ADJUDICATED TOGETHER. ITA NO. 1602 /AHD/2018 2. THE SOLITARY GROUND OF APPEAL FILED BY THE ASSESSEE AGAINST THE DECISION OF LD. CIT(A) IS IN CONFIRMING THE ADDITION OF RS. 12 , 45 , 064/ - ON ACCOUNT OF BOGUS LIABILITY U/S. 68 OF THE ACT. 3. THE FACT IN BRIEF IS THAT ASSESSMENT U/S. 143(3) OF THE ACT WAS PASSED ON 28 TH MA Y, 2014 FOR THE YEAR UNDER CONSIDERATION . DURING THE COURSE OF ASSESS MENT, THE ASSESSING OFFICER NOTICED OUTSTANDING BALANCE OF SUNDRY CREDITORS AS ON 31 ST MARCH, 2011 TO THE AMOUNT OF RS. 12 , 45 , 064/ - IN RESPECT OF WHICH ASSESSEE HAS NOT FURNISHED THE RELEVANT SUPPORTING DETAIL. THEREFORE, THE ASSESSING OFFICER HAS TREATED THE SAME AS BOGUS LIABILITY AND ADDED U/S. 68 OF THE ACT. 4. AGGRIEVED ASSESSEE HAS FILED A PPEAL BEFORE THE LD. CIT(A). T HE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE. I.T.A NO S. 1601, 1180, 1181, 1602 & 1603 /AHD/20 18 A.Y. 2008 - 09 & 2011 - 12 PAGE NO SHRI ANIL G. GUGGAD & SMT. REKHA A. GUGGAD VS. DY. CIT 3 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS CONTENDED THAT ASSESSING OFFICER HAS INCORRECTLY INVOKED THE PROVISION OF SECTION 68 OF THE ACT IN RESPECT OF THE OUTSTANDING BALANCE PERTAINING TO THE SUNDRY CREDITORS AND HE HAS FURTHER STATED THAT THE PROVISION OF SECTION 68 IS ONLY APPLICATION IN RESPECT OF AMOUNT RECEIVED DURING THE YEAR. THE LD. COUNSEL HAS ALSO SU BMITTED THAT IN S UBSEQUENT YEAR THE OUTSTANDING BALANCE OF THE OUTSTANDING CREDITORS HAVE BEEN SQUARED UP BY MAKING PAYMENT TO THEM THROUGH ACCOUNT PAY EE CHEQUE WHICH WAS NOT DISPUTED BY THE ASSESSING OFFICER. IT IS FURTHER SUBMITTED BY THE LD. COUNSEL THAT ASSESSEE HAS NOT MADE ANY PURCHASE DURING THE YEAR UNDER CONSIDERATION FROM THE SAID PARTIES AS IT WAS ONLY OUTSTANDING BALANCE PERTAINING TO THE EARLIER YEARS. THE L D. COUNSEL HAS ALSO REFERRED PAG E NO. 53 OF THE PAPER BOOK POINTING A CHART GIVING PARTY WISE DETAIL O F PAYMENT MADE IN SUBSEQUENT YEAR ALONG WITH LEDGER ACCOUNT OF THE PARTIES. THE LD. COUNSEL HAS ALSO CONTENDED THAT ISSUE OF NON - EXISTENCE OF THE PARTIES HAVE NOT BEEN CONFRONTED TO THE ASSESSEE BY THE ASSESSING OFFICER. ON THE OTHER HAND, THE LD. DEPART MENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUTHORITIES . 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSMENT U/S . 143(3) OF THE ACT WAS COMPLETED VIDE ORDER DATED 28 TH MARCH, 2014 AFTER MAKING ADDITION OF RS . 12 , 45 , 064/ - BEING AMOUNT OUTSTANDING IN NAME OF THREE PARTIES TREATING THE SAME AS BOGUS LIABILITY AND ADDED U/S. 68 OF THE ACT. IT IS UNDISPUTED FACT THAT ASSESSEE HAS NOT MADE ANY PURCHASES FROM THE THREE PARTIES SHOWN IN THE HEAD SUNDRY CREDITORS. T HE LD. COUNSEL HAS DEMONSTRATED FROM THE DETAIL REFLECTED IN ANNEXURE - 2 AS PER PAGE NO. 53 OF THE PAPER BOOK THAT IN RESPECT OF THREE SUNDRY CREDITORS THERE WERE I.T.A NO S. 1601, 1180, 1181, 1602 & 1603 /AHD/20 18 A.Y. 2008 - 09 & 2011 - 12 PAGE NO SHRI ANIL G. GUGGAD & SMT. REKHA A. GUGGAD VS. DY. CIT 4 HAVING OPENING BALANCE APPEARED IN THE ACCOUNT OF T HE SAID PARTY TO THE AMOUNT OF R S. 12 , 45 , 06 4/ - WHICH HAS BEEN ADDED BY THE ASSESSING OFFICER U/S. 68 OF THE ACT. IT IS ALSO DEMONSTRATED BY THE LD. COUNSEL THAT THE OUTSTANDING SUNDRY CREDITORS WERE DULY PAID BY ACCOUNT PAYEE CHEQUE ON 28 TH OCTOBER, 2011 AND 17 OCTOBER, 2011 RESPECTIVELY AS THE DE TAIL GIVEN ON PAGE NO. 53 OF THE PAPER BOOK. THESE DETAILS WERE ALSO SUBMITTED BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. HOWEVER, THE GENUINENESS OF THE SAME WAS NOT DISPROVED BY THE ASSESSING OFFICER. IN THE LIGHT OF THE ABOVE FACTS AND CIRCUMSTANC ES, WE OBSERVED THAT THE ASSESSING OFFICER HAS INCORRECTLY APPLIED SECTION 68 OF THE ACT IN RESPECT OF OUTSTANDING BALANCE OF SUNDRY CR EDITORS REPORTED BY THE ASSESSING OFFICER . IN ADDITION TO ABOVE, THE A S SESSEE HAS CLEARLY DEMONSTRATED THE OUTSTANDING B ALANCE IN THE NAME OF SAID PARTIES HAVE BEEN SQUARED OFF IN THE SUBSEQUENT YEAR BY PAYMENT FROM ACCOUNT PAYEE CHEQUES AS DEMONSTRATED IN THE PAPER BOOK WHICH WAS NOT DISPUTED BY THE ASSESSING OFFICER. CONSIDERING THE ABOVE FACTS AND CIRCUMSTANCES, WE ARE NOT INCLINED WITH THE DECISION OF LD. CIT(A), THEREFORE, THE APPEAL OF THE ASSEESSE IS ALLOWED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 1181 /AHD/2018 8. THE ASSESSEE HAS FILED APPEAL AGAINST THE DECISION OF LD. CIT(A) - 6 IN SUSTAINING THE PENALTY OF RS. 3 , 78 , 540/ - LEVIED U/S. 271(1)(C) OF THE ACT. 9. THE ASSESSING OFFICER HAS LEVIED THE IMPUGNED PENALTY IN RESPECT OF QUANTUM ADDITION OF RS. 12 , 45 , 064/ - MADE U/S. 68 OF THE ACT. SINCE THE I.T.A NO S. 1601, 1180, 1181, 1602 & 1603 /AHD/20 18 A.Y. 2008 - 09 & 2011 - 12 PAGE NO SHRI ANIL G. GUGGAD & SMT. REKHA A. GUGGAD VS. DY. CIT 5 IMPUGNED QUANTUM ADDITION HA S BEEN DELETED VIDE ITA N O. 1602 /AHD/2018 AS ADJUDICATED ABOVE, THEREFORE, THE PENALTY LEVIED IN THIS CASE HAS BECOME INFRUCTUOUS. CONSEQUENTLY, THE SAME IS DELETED. THIS APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 1601 /AHAD/2018 10. THE ASSESSEE HAS FILE D APPEAL AGAINST THE DECISION OF LD. CIT(A) - 6, AHMEDABAD IN SUSTAINING THE PENALTY OF RS. 25 , 82 , 560/ - LEVIED U/S. 271(1)(C) OF THE ACT BY THE ASSESSING OFFI CER. IN THIS CASE, ASSESSMENT U/S. 147 R.W.S. 143(3) OF THE ACT WAS MADE ON 28 TH MARCH, 2014 WHEREI N THE AMOUNT OF RS. 19,97,584/ - OUTSTANDING IN THE NAME OF NIN E PARTIES WERE TREATED AS BOGUS LIABILITY AND THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESS EE U/S. 68 OF THE ACT. SUBSEQUENTLY, THE LD. CIT(A) HAS ENHANCED THE ADDITION TO THE AMOUNT OF R S. 77 , 68 ,002 / - BY INCLUDING ALL THE PURCHASES MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THEREAFTER, THE ASSESSING OFFICER HAS LEVIED PENALTY U/S. 271(1)(C) OF THE ACT ON THE ENHANCED ADDITION MADE BY T H E LD. CIT(A) TO THE AMOUNT OF RS . 25 , 82 , 560/ - ON THE GROUND THAT ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. 11. THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A) WHO HAS DISMISSED THE APPEAL OF THE ASSESSEE. 12. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS BROUGHT TO OUR NOTICE THAT CO - ORDINATE BENCH OF THE ITAT VIDE ITA NO. 1087/AHD/2016 IN THE CASE OF SHRI ANIL GAHERI LAL D UGGAD DATED 10 - 04 - 2018 AFTER ANALYZING DETAILS I .E. QUANTIFICATION OF PURCHASES & SALES HELD THAT ONLY I.T.A NO S. 1601, 1180, 1181, 1602 & 1603 /AHD/20 18 A.Y. 2008 - 09 & 2011 - 12 PAGE NO SHRI ANIL G. GUGGAD & SMT. REKHA A. GUGGAD VS. DY. CIT 6 PROFIT INVOLVED I N THESE PURCHASES WOULD BE TREATED AS INCOME OF THE ASSESSEE AND T RIBUNAL HAS ESTIMATED ADDITION TO PROFIT TO THE EXTENT OF RS. 15% ONLY, THEREFORE, THE LD. COUNSEL HAS SUBMITTED THAT NO PENALTY SHOULD BE LEVIED AS MOST OF THE ADDITIONS HAS BEEN DELETED O NLY MARGINAL AMOUNT HAS BEEN SUSTAINED BY THE ITAT ON ESTIMATED BASIS. T HE LD. COUNSEL HAS ALSO PLACED RELIANCE ON THE DECISI ON OF GUJARAT HIGH COURT VIDE 8 5 ITR 77. 13. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSIN G OFFICER HAS LEVIED PENALTY. 14. IN APPEAL, THE LD. CIT(A) HAS ENHANCED THE ADDITION OF R S. 77 , 68 , 002/ - BY INCLUDING THE WHOLE OF THE PURCHASES MADE BY THE ASSESSEE FROM THE NINE PARTIES . THE CO - ORDINATE BENCH OF THE ITAT HAS RESTRICTED THE ADDITION ONLY TO THE EXTENT OF PROFIT ELEMENT TO THE EXTENT OF 15% AS PER THE DECISION OF DISCUSSED AND CITED ABOVE IN THIS ORDER. IN THE LIGHT OF ABOVE FACTS AND CIRCUMSTANCES , IT OBSERVED THAT RELEVANT DETAIL AND INFORMATION ABOUT THE PURCHASES TRANSACTIONS WAS PROVIDED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ASSESSING OFFICER HAS INCORRECTLY ADDED THE OUTSTANDING BALANCE PERTAINING TO SUNDRY CREDITORS IN RESPECT OF NINE PARTIES U/S. 68 OF THE ACT ON T H E GROUND THAT SAID PARTIES WERE NOT FOUND AT GIVEN ADDRESSES WHICH WAS SUBSEQUENTLY ENHANCED BY LD. CIT(A) BY INCLUDING THE WHOLE AMOUNT OF PURCHASES MADE BY THE ASSESSEE FROM THESE PARTIES. IT IS NOTICED THAT ASSESSING OFFICER HAS NOT CONFRONTED THE A SSESSEE TO PRODUCE THE PARTIES WHO WERE NOT FOUND AT THE GIVEN ADDRESSES . THE CO - ORDINATE B ENCH OF THE IT AT HAD DELETED THE ADDITIONS EXCEPT SUSTAINING THE ADDITION ON ESTIMATED BASIS TO THE EXTENT OF RS. 15% . CONSIDERING THE FACT S AND I.T.A NO S. 1601, 1180, 1181, 1602 & 1603 /AHD/20 18 A.Y. 2008 - 09 & 2011 - 12 PAGE NO SHRI ANIL G. GUGGAD & SMT. REKHA A. GUGGAD VS. DY. CIT 7 SUSTAINING OF ADDITION S ON MERELY ESTIMATED BAS IS, WE OBS ERVE THAT GIVEN CIRCUMSTANCES IT IS NOT A FIT CASE TO LEVY PENALTY U/S. 271(1)(C) OF THE ACT, THEREFORE, PENALTY LEVIED IN THIS CASE IS DELETED. ACCORDINGLY , THE APPEAL OF THE ASSESSEE IS ALLOWED. 15. IN THE RESULT, THE AREAL OF THE ASSESSEE IS ALLOWE D. ITA NO. 1603 /AHD/2018 16. THE ASSESSEE HAS FILED APPEAL AGAINST THE DECISION OF LD. CIT(A) IN SUSTAINING ADDITION OF R S. 37 , 10 , 873/ - MADE BY THE ASSESSING OFFICER U/S. 143(3) OF THE ACT ON ACCOUNT OF BOGUS LIABILITY IN RESPECT OF OUTSTANDING BAL ANCE OF SUNDRY CREDITORS TO THE AMOUNT OF R S. 37 , 10 , 873/ - . SINCE ON IDENTICAL FACTS AND SIMILAR ISSUE, WE HAVE DELETED THE ADDITION IN RESPECT OF OTHER CASE ADJUDICATED IN THIS ORDER VIDE ITA N. 1602/ AHD/2018 CONSIDERING THE FINDING AS ELABORATED IN THE S AID ORDER , THIS APPEAL OF THE ASSESSEE IS ALSO ALLOWED. 17. SECOND ISSUE IN THE APPEAL OF THE ASSESSEE IS AGAINST THE ADDITION OF RS. 1 , 72 , 314/ - MADE ON ACCOUNT OF ESTIMATION OF GROSS PROFIT @ 3.82% AS AVERAGES ON LAST THREE YEARS. IN THIS REGARD, IT IS NOTICED THAT DURING THE COURSE OF SURVEY AGAINST BOOK VALUE OF GOODS AT RS. 75 , 85 , 889/ - THE VALUE OF GOODS ON PHYSICAL VERIFICAT ION WAS FOUND TO THE EXTENT OF R S. 30 , 75 ,989 / - . I N SPI T E OF GIVING A NUMBER OF OPPORTUNITY AT THE LEVEL OF ASSESSING OFFIC ER AND AT THE LEVEL OF CIT(A) THE ASSESSEE COULD NOT PRODUCE ANY EVIDE NCE TO I.T.A NO S. 1601, 1180, 1181, 1602 & 1603 /AHD/20 18 A.Y. 2008 - 09 & 2011 - 12 PAGE NO SHRI ANIL G. GUGGAD & SMT. REKHA A. GUGGAD VS. DY. CIT 8 RECONCILE DIFFERENCES , THEREFORE, WE DO NOT FIND ANY MERIT IN THIS APPEAL OF THE ASSESSEE, THEREFORE, THE SAME STANDS DISMISSED. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 1180 /AHD/2018 19. THE SOLITARY GROUND OF APPEAL IS FILED AGAINST THE DECISION OF LD. CIT(A) IN SUSTAINING THE PENALTY OF R S. 11 , 05 , 146/ - LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT. 20. SINCE SIMILAR ISSU E ON IDENTICAL FACT WE HAVE ADJUDICATED IN FAVOUR OF THE ASSESSEE IN THIS ORDER VIDE ITA NO. 1181/AHD /2018 AS ELABORATED ABOVE IN THIS ORDER, THEREFORE , ON SIMILAR GROUND AND REASON, THIS APPEAL OF THE ASSESSEE IS ALSO ALLOWED 21. IN THE RESULT, THE AP PEAL OF THE ASSESSEE IS ALLOWED. 22. IN THE COMBINED RESULT, APPEAL ITA 1602 /AHD/2018 , 1181 /AHD/2018 , 1601/AHD/2018 , 1180 /AHD/2018 ARE ALLOWED AND APPEAL ITA 1603 /AHD/2018 IS PARTLY ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 28 - 02 - 20 20 SD/ - SD/ - ( KUL BH ARAT ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 28 /02 /2020 I.T.A NO S. 1601, 1180, 1181, 1602 & 1603 /AHD/20 18 A.Y. 2008 - 09 & 2011 - 12 PAGE NO SHRI ANIL G. GUGGAD & SMT. REKHA A. GUGGAD VS. DY. CIT 9 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,