Income-tax Officer, Ward - 14 (3), Pune V. Jeevan Popatlal Bhaliya, Pune

ITA 1635/PUN/2017

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 6112 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2022
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 26-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Additional evidence; Set aside
• Section: 147; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, PUNE SHRI PARTHA SARATHI CHAUDHURY, JM AND DR. DIPAK P. RIPOTE, AM ITA No. 1635/PUN/2017 Assessment Year : 2009-10 The I.T.O. Ward 14(3) Pune : Appellant Vs. Jeevan P. Bhaliya, Flat No. 203, Heritage Palace society Kedari Nagar, Near Kedari Petrol Pump, Pune- 411 040 PAN; AASPB 3710G : Respondent Appellant by : Shri S.P. Walimbe Respondent by : Shri Abhay Avchat Date of Hearing : 22-03-2022 Date of Pronouncement 24-03-2022 ORDER PER PARTHA SARATHI CHAUDHURY, JM : This appeal preferred by the Revenue emanates from order of the ld. Commissioner of Income Tax (Appeals) – 3, Pune dated 29-03-2017 for the Assessment Year 2009-10 on the following grounds:- i) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing the bogus purchases as well as the bogus sales made by the assessee and also there was no proof of bogus sales.? ii) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) is justified in his action when the Gujrat High Court has held that the bogus purchase was disallowed when the same has been held as bogus and the order of the high court was confirmed by Hon'ble Supreme Court of India in the case of N. K. Proteins Ltd. in Appeal CC No. 769/2017.? iii) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was erred in not appreciating the fact that the assessee was squarely covered by the judgment of the Gujrat High Court order in the case of N. K. Properties Ltd. in Appeal CC No. 242/2003. iv) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was erred in allowing bogus purchases even after the same was proved to be bogus and the same was not denied by the assessee or by the CIT(A). Thus, whether CIT(A) erred in allowing the appeal of the assessee which is contrary to the judgment given by the Hon 'ble Gujrat High Court and was up held by Hon'ble Supreme Court of India in the case of N. K. Proteins 2 ITA No. 1635/PUN/2017 Jeevan P. Bhaliya A.Y. 2009-10 Ltd. in Appeal CC No. 769/2017. v) Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was erred in allowing bogus~ purchases even when the bogus purchases have been proved so and in allowing bogus purchases by holding that the same are sham and are just the paper transactions effected in order to inflate the turnover. Also, there was no documentary evidence of the sales amount to prove the same to be bogus, which will nullify the effect in profit and loss account.” 2. The brief facts of the case are that the assessee is an individual and engaged in the business of civil construction. He is working with various builders for last 20 years or so. The assessee had filed the return of income on 24-3-2010 declaring total income of Rs. 10,51,636/-. The case was reopened under the provisions of sec. 147 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) on account of information received from the Sales-tax Department regarding hawala transactions. On account of non-compliance by the assessee, the ld. A.O completed the assessment u/s 144 of the Act r.w.s. 147 of the Act determining the total income of Rs. 2,68,33,963/- thereby making addition of Rs. 2,57,82,057/- on the basis of gross profit ratio of 2.72% as adopted in the case of son of the assessee. On appeal, the ld. CIT(A) granted relief to the assessee. Being aggrieved, the Revenue is in appeal before us. 3. At the time of hearing before us, the ld. D.R submitted that as evident from para 7 of the assessment order, the present assessee is the father of Shri Manish Jeevan Bhaliya and both of them have made purchases from the same hawala parties in question. At the time of assessment proceedings, various documents/evidences were called for from the assessee which he had not furnished. However, before the ld. CIT(A) the assessee had submitted various details/additional evidences regarding his case which was accepted by the ld. CIT(A) without giving an opportunity to the ld. A.O to give his comments on those submitted documents. That in exactly identical facts and circumstances in the case of the son of the assessee i.e. Manish Bhaliya, Pune Bench of the 3 ITA No. 1635/PUN/2017 Jeevan P. Bhaliya A.Y. 2009-10 Tribunal in ITA No.1636/PUN/2017 for A.Y. 2009-10, dated 16-3-2020 has held that mere admission of additional evidences without giving an opportunity to the A.O to confront those evidences and without calling for a remand report regarding verification of genuineness of the transactions, the ld. CIT(A) had not complied with the parameters of law and thus the matter was remanded back to the file of the ld. CIT(A) to re-adjudicate the matter after calling for a remand report from the A.O. not only on the entire evidences submitted before the ld. CIT(A) but also vis-à-vis the verification of facts on the genuineness of the transactions which the ld. A.O should verify and report back to the ld. CIT(A) with similar directions. The ld. D.R submitted therefore, in the identical facts and circumstances, the present matter should also be remanded back to the file of the ld. CIT(A). The ld. A.R conceded to the factual matrix of the case and did not raise any objection for remanding the matter back to the file of the ld. CIT(A) with the same directions as contained in the case of the assessee‟s son Mnish Bhaliya (supra). 4. We have perused the case records, heard the submissions of the parties and analysed the facts and circumstances in this case. That as evident from the assessment order from para 7 onwards, the assessee is the father of Manish Bhaliya and both of them have made purchases from the said hawala parties in question. That, it is also a matter of fact that various details/documents were called for by the ld. A.O, which the assessee could not furnish at the time of assessment proceedings. That, further as evident from the ld. CIT(A)‟s order at para 7.3.1 and 7.3.2 the assessee had produced information and various documents for the first time in relation to his case before the ld. CIT(A). These were therefore, in the form of additional evidences only. The ld. A.O, nowhere, as evident from the order of the ld. CIT(A), was given an opportunity to confront these additional evidences and also the ld. CIT(A) had not called for any remand report. That, on the identical facts and circumstances in the case of 4 ITA No. 1635/PUN/2017 Jeevan P. Bhaliya A.Y. 2009-10 the assessee‟s son Manish Bhaliya in ITA No. 1636(PUN)/2017 (supra), we have observed and held as follows: 4. The brief facts of the case are that the assessee is an individual and being a labour contractor, engaged in the business of civil construction. The assessee filed the return of income on 24.03.2010 declaring total income at Rs.5,26,771/-. The case of the assessee was reopened under the provisions of section 147 of the Income Tax Act, 1961 (hereafter referred to as „the Act‟) on account of information received from the Sales Tax Department regarding the Hawala Transactions. Notice u/s.148 of the Act was issued on 26.03.2014. Thereafter, several notices were issued u/s.142(1) of the Act from time to time. Last notice u/s.142(1) of the Act was issued on 09.03.2015 to attend on 20.03.2015 along with questionnaire which was sent by the Speed Post and duly served on the assessee. On the given date and time, the assessee neither attended nor filed any written submissions. Since the assessee failed to comply to the notices and furnish the details and information, the assessment u/s. 144 r.w.s.147 of the Act was completed on 3 ITA No. 1636/PUN/2017 A.Y.2009-10 26.03.2015 determining total income at Rs.1,98,13,660/- and made additions of Rs.1,89,86,893/- on the basis of the gross profit ratio of 2.72% adopted in the case of the assessee for the previous year. 5. During the First Appellate Proceedings, the Ld. CIT(Appeals) vide Para 7.3.14 of his order, has given relief to the assessee and deleted the entire addition made by the Assessing Officer. 6. At the time of hearing, the Ld. DR brought to our notice that various additional evidences were admitted by the Ld. CIT(Appeals) from the assessee but those additional evidences were not placed before the Assessing Officer for his comments. That further, in these cases of bogus purchases, the facts needs to have a detailed verification and since there was no compliance before the Assessing Officer, the Ld. CIT(Appeals) was not justified in simply admitting various additional evidences and giving relief to the assessee even without calling for any remand report from the concerned Assessing Officer. 7. We have perused the case records and heard the submissions made by the Ld. DR. We have also analyzed the facts and circumstances in this case. This is a case of bogus purchases where assessment has been completed u/s.144 r.w.s.147 of the Act. The Assessing Officer vide Para 8 of his order has applied gross profit @ 2.72% based on the earlier years and made additions accordingly. The facts further clearly demonstrates that in the entire order of the Ld. CIT(Appeals), he has not called for any remand report from the Assessing Officer. The Ld. CIT(Appeals) simply relied on the submissions and evidences furnished before him by the assessee and has given relief even without himself conducting any specific enquiry. This is an 4 ITA No. 1636/PUN/2017 A.Y.2009-10 issue of bogus purchases where at the time of reassessment proceedings, the assessee avoided to appear before the Assessing Officer and at the appellate stage, has provided certain additional evidences but they were also not scrutinized on the parameters of genuineness by the concerned Assessing Officer since no remand report was called for from him. 7.1 In our view, justice should not only be done, it should seem to have been done. This way of giving relief to the assessee in a summarized and cryptic order by the Ld. CIT(Appeals) without calling for any remand report is not warranted from a quasi-judicial authority. The parameters of justice demands that there should be check and carves on the practices conducted by the assessee so that the Revenue is not defrauded or denied of the legible taxes which it has to receive from the assessee. Merely admission of additional evidences without giving an opportunity to the Assessing Officer to confront all these evidences, without calling for remand report regarding verification of genuineness of the transactions, the Ld. CIT(Appeals) has not complied with the parameters of law. 7.2 In view of the matter, we set aside the order of the Ld. CIT(Appeals) and remand the matter back to his file and direct him to adjudicate the matter after calling for remand report from the Assessing Officer not only on the entire evidences submitted before him by the assessee but also vis-à-vis verification of 5 ITA No. 1635/PUN/2017 Jeevan P. Bhaliya A.Y. 2009-10 facts on the genuineness of transactions which the Assessing Officer should conduct and report back to the Ld. CIT(Appeals). Needless to say, the Ld. CIT(Appeals) shall grant reasonable opportunity of hearing to the assessee. 5 ITA No. 1636/PUN/2017 A.Y.2009-10 8. In the result, appeal of the Revenue is allowed for statistical purposes.” 5. Respectfully following our decision in ITA No. 1636/PUN/2017 for A.Y. 2009-10, on the same parity of reasoning, we set aside the order of the ld. CIT(A) and remand the matter back to his file with the same directions as contained in ITA No. 1636/PUN/2017 (supra). 6. In the result, the appeal of the Revenue is allowed for statistical purposes. Order pronounced in the open Court on this 24 th day of March 2022 Sd/- sd/- (DR. DIPAK P. RIPOTE) (PARTHA SARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune; Dated, the 24 th March 2022 Ankam 6 ITA No. 1635/PUN/2017 Jeevan P. Bhaliya A.Y. 2009-10 Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The Pr. CIT- 2, Pune 4. The CIT(A)- 3, Pune. 5. D.R. ITAT „A‟ Bench 5. Guard File BY ORDER, Sr. Private Secretary ITAT, Pune. ///TRUE COPY/// 7 ITA No. 1635/PUN/2017 Jeevan P. Bhaliya A.Y. 2009-10 Date 1 Draft dictated on 22-03-2022 Sr.PS/PS 2 Draft placed before author 22-03-2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS 24-03-2022 Sr.PS/PS 6 Kept for pronouncement on 24-03-2022 Sr.PS/PS 7 Date of uploading of order 24-03-2022 Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order