ITO, Ward - 45(2), Kolkata, Kolkata V. Sushil Kumar Gupta, Kolkata

ITA 1606/KOL/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78393 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2014
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 23-11-2011
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAL JCITSR
• Assessee Lawyers: SIDDARTH JHAJHARIA CA LD
• Keywords: Bogus purchase
• Section: 45(2); 133(6)

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH- C KOLKATA ( ) BEFORE . . , SHRI P.K.BANSAL , ACCOUNTANT MEMBER /AND % 1 , SHRI GEORGE MATHAN, JUDICIAL MEMBER ( / ITA NO. 1606/KOL/2011 A.Y 2007-08 I.T.O WARD 45(2), KOLKATA ) ) - VERSUS -. SUSHIL KUMAR GUPTA PAN: ADZPG 4634Q ( * / APPELLANT ) ( +,* / RESPONDENT ) * / FOR THE APPELLANT SMT. RANU BISWAL, JCIT/SR.DR +,* / FOR THE RESPONDENT: / SHRI SIDDARTH JHAJHARIA, CA, LD.AR 1 2 /DATE OF HEARING : 24-07-2014 1 2 /DATE OF PRONOUNCEMENT: 24-07-2014 / ORDER % 1 , SHRI GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XXX, KOLKATA IN APPEAL NO.176/CIT(A)- XXX/WARD-45(2)/2009-10 DATED 26.08.2011 FOR THE ASS ESSMENT YEAR 2007-08. 2. SMT. RANU BISWAL, LEARNED JCIT/SR.DR REPRESENT ED ON BEHALF OF THE REVENUE AND SHRI SIDDARTH JHAJHARIA, CA, LEARNED A R REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IN THE REVENUES APPEAL IN ITA NO.1606/KOL/2011 FOR THE ASSESSMENT YEAR 2007-08, THE REVENUE HAS RAISED THE FOLLOWING GROUN DS OF APPEAL :- 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD.CIT(A) HAS ERRED IN DELETING AN AMOUNT OF RS.16,94,180/- ON ACCOUNT OF BOGUS PURCHASE. 2. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD.CIT(A) IS NOT JUSTIFIED IN DELETING THE DISA LLOWANCE OF 15% OF PURCHASE MADE IN THE ASSESSMENT AND TO REFUS E TO GIVE EFFECT ON THE BOGUS PURCHASE CAME TO LIGHT ON ENQUIRY ITA NO. 1606/KOL2011-C-JM ITO W 45(2) KOL VS. SUSHI L KR. GUPTA. 2 MADE AT HIS BEHEST INITIATED ON SUPPLY FOR THE FIR ST TIME BEFORE HIM OF NEW INFORMATION VIZ. ADDRESSES OF THE PARTIE S NOT FILED EARLIER PURELY ON SOME TECHNICAL GROUNDS, WHILE TH E SUBSTANCE OF THE CASE PERFECTLY JUSTIFIES SUCH DISALLOWANCE O F 15% OF THE ENTIRE PURCHASE AS NOT ALLOWABLE HELD IN THE ASSESS MENT. 3. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE LD. CIT(A) IS NOT JUSTIFIED, IN IGNORING THE FA CT OF BOGUS PURCHASE MERELY ON THE GROUND THAT THE PURCHASES W ERE MADE IN CASH FROM PETTY KARIGARS. 4. IT WAS SUBMITTED BY THE LEARNED JCIT/SR.DR THAT IN THE COURSE OF ASSESSMENT IT WAS NOTICED THAT THE ASSESSEE WAS DEA LING IN SAREES. THE ASSESSEE HAD FILED THE LIST OF THE PARTIES FROM WHO M PURCHASES WERE MADE. THE NOTICES ISSUED U/S. 133(6) OF THE PARTIES WERE RETU RNED UNSERVED. CONSEQUENTLY, THE AO HAD DISALLOWED 15% OF THE ENTIRE PURCHASES. IT WAS THE SUBMISSION BY HER THAT THE LEARNED COMMISSIONER OF INCOME-TAX (APPEAL S) HAD DELETED THE DISALLOWANCE BY HOLDING THAT THE BOOKS OF ACCOUNT O F THE ASSESSEE HAD NOT BEEN REJECTED. SHE HAS VEHEMENTLY SUPPORTED THE ORDER OF THE AO. 5. IN REPLY, SHRI SIDDARTH JHAJHARIA, CA, LEARNE D AR FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS DOING THE BUSINESS O F TRADING SAREES. IT WAS THE SUBMISSION THAT THE SELLERS OF THE SAREES HAVE NOT RECEIVED ANY NOTICES. IT WAS THE SUBMISSION BY HIM THAT THE ASSESSEE HAD ALSO RE QUESTED THE AO TO RESEND THE NOTICES ONCE MORE AND THAT WAS DENIED BY THE AO. IT WAS THE SUBMISSION THAT ON ADHOC BASIS THE AO HAD DISALLOWED 15% OF THE ENTIRE PURCHASES. IT WAS THE FURTHER SUBMISSION THAT THE PURCHASES MADE WERE FRO M VARANASI IN UTTAR PRADESH, WHERE PEOPLE ARE SMALL KARIGARHS. IT WAS THE SUBMI SSION THAT THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ON THI S ISSUE WAS LIABLE TO BE SUSTAINED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE ASSESSMENT ORDER SHOWS THAT THE AO HAS MADE AN ADHOC DISALLOWA NCE @ 15% WITHOUT ANY SPECIFIC DEFECT BEING POINTED OUT BY HIM. THE AO H AS NOT BEEN ABLE TO POINT OUT OR SHOW THAT THE PURCHASES RECORDED BY THE ASSESSEE W ERE WRONG OR THE STOCK AS DISCLOSED BY THE ASSESSEE WAS NOT COMMENSURATE WIT H THE PURCHASES. A PERUSAL OF THE ORDER OF THE LEARNED COMMISSIONER OF INCOME -TAX (APPEALS) CLEARLY SHOWS ITA NO. 1606/KOL2011-C-JM ITO W 45(2) KOL VS. SUSHI L KR. GUPTA. 3 THAT HE HAS TAKEN INTO CONSIDERATION THE FACT THAT THE BOOKS OF ACCOUNT OF THE ASSESSEE HAVE NOT BEEN REJECTED BY THE AO WHEN HE DELETED THE DISALLOWANCE MADE BY THE AO. THIS FINDING OF THE LEARNED COMMISS IONER OF INCOME-TAX (APPEALS) HAS NOT BEEN DISLODGED BY THE REVENUE. CO NSEQUENTLY, WE ARE OF THE VIEW THAT THE FINDING OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ON THIS ISSUE IS ON A RIGHT FOOTING AND DOES NOT CALL FOR ANY INTERFERENCE. WE UPHOLD THE SAME. THE GROUNDS RAISED BY THE REVENUE ARE DI SMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.1606/KOL/2011 FOR THE ASSESSMENT YEAR 2007-08 STANDS DISMISSED. 6 THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT 24/7/ 2014 SD/- SD/- 1 +9 :9 / COPY OF THE ORDER FORWARDED TO: 1. . * / THE APPELLANT : I.T.O WARD 45(2), 3 GOVT PL(W), GR. FL. KOL-1. 2 +,* / THE RESPONDENT- SHRI SUSHIL KUMAR GUPTA C/O M/ S. SUSHIL SAREE CENTRE, 12/2 SOVARAM BYSACK ST., KOL-7. 3 4. . / THE CIT, ( )/ THE CIT(A) 5 . + / DR, KOLKATA BENCH 6 . GUARD FILE . ,9 +/ TRUE COPY, / BY ORDER, /ASSTT REGISTRAR ** PRADIP SPS ( . . , ) ( P.K.BANSAL, ACCOUNTANT MEMBER ) ( % 1 , ) (GEORGE MATHAN, JUDICIAL MEMBER) ( (( ( 2 2 2 2 ) )) ) DATE 24/7/14