TRIVENI BIALETTI INDUSTRIES PRIVATE LIMITED, Mumbai V. ACIT, CIRCLE-1, KALYAN

ITA 1768/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6076 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 19-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARUN PRATAP SINGH
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Principle of natural justice; Corroborative evidences
• Section: 133(6); 143(1); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE S/SHRI SAKTIJIT DEY, JUDICIAL MEMBER & M BALAGANESH, ACCOUNTANT MEMBER ITA NO.1768/MUM/2018 ASSESSMENT YEAR 2009-10 TRIVENI BIALETTI INDUSTRIES P LTD, SURVEY NO.231, KHARDI MUMBAI NASIK ROAD, SHAHPUR, DIST THANE 421 304 PAN AACCT6685P VS. ACIT CIRCLE - 1, KALYAN (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUBODH RATNAPARKHI RESPONDENT BY : SHRI ARUN PRATAP SINGH DATE OF HEARING : 19 .09.201 9 DATE OF PRONOUNCEMENT : 25. 09.2019 O R D E R PER SAKTIJIT DEY, JUDICIAL MEMBER: THIS IS AN APPEAL BY THE ASSESSEE AGAINST ORDER, D ATED 06.11.2017, OF LEARNED CIT(A)-2, PUNE, FOR THE A.Y. 2009-10. 2. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE REA D AS UNDER: ON THE FACTS AND IN LAW, 1. THE HON. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.50,15,844/- MADE ON ACCOUNT OF ALLEGED HAWALA PU RCHASES FROM TWO PARTIES DEBITED TO THE PROFIT AND LOSS ACC OUNT OF THE APPELLANT, NOT APPRECIATING THAT THE SAID PURCHASES WERE GENUINE PURCHASES, DULY SUPPORTED BY SUBSTANTIAL EVIDENCES AND THAT THE MATERIAL PURCHASES WAS CONSUMED BY THE APPELLANT IN MANUFACTURING OF KITCHEN APPLIANCES LIKE PRESSURE C OOKERS AND ITA NO.1768 /MUM/2018 TRIVENI BIALETTI INDUSTRIES PRIVATE LIMITED 2 NON STICK COOKWARES ETC. AND THEREFORE, THE ADDITIO N WAS NOT JUSTIFIED. 2. THE HON. CIT(A) ERRED IN UPHOLDING THE ADDITION OF RS.50,15,844/-, MADE ON ACCOUNT OF ALLEGED HAWALA P URCHASES, WITHOUT AFFORDING YOUR APPELLANT WITH ANY OPPORTUNI TY TO CROSS EXAMINE THE SOURCE OF ADVERSE EVIDENCE, THEREBY BRE ACHING THE SILENT PRINCIPLES OF EQUITY, FAIRPLAY AND NATURAL J USTICE. 3. BRIEFLY, THE FACTS ARE THE ASSESSEE IS STATED TO BE ENGAGED IN MANUFACTURE AND SALE OF PRESSURE COOKERS. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.09.2009 DECLARING LOSS OF RS 17,15,76,053/-. THE RETURN OF INCOME FILED B Y THE ASSESSEE WAS INITIALLY PROCESSED U/S. 143(1) OF THE ACT. SUBSEQUENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT PURCHASES WORTH RS 50,15,844/- CLAIMED TO HAVE BEEN MADE FROM TWO PARTIES ARE NOT GENUINE, AS THE CONCERNED PARTIES ARE HAWAL A OPERATORS INDULGING IN PROVIDING ACCOMMODATION BILLS, THE ASSESSING OFFICE R RE-OPENED THE ASSESSMENT U/S. 147 OF THE ACT. AS ALLEGED BY THE ASSESSING OFFICER, IN THE COURSE OF ASSESSMENT PROCEEDINGS THOUGH THE ASSESSI NG OFFICER CALLED UPON THE ASSESSEE TO FURNISH VARIOUS INFORMATION AND SUP PORTING EVIDENCE TO PROVE THE PURCHASES, HOWEVER, THE ASSESSEE EXCEPT FURNISH ING THE PURCHASE BILLS DID NOT PRODUCE THE TRANSPORTATION BILLS, DELIVERY CHAL LANS, GOODS RECEIVING NOTE, OCTROI RECEIPTS ETC. HE OBSERVED, EVEN ATTEMPTS MA DE BY HIM TO INDEPENDENTLY VERIFY THE PURCHASES THROUGH LETTERS ISSUED U/S. 133(6) OF THE ACT ALSO BECAME FUTILE AS SUCH NOTICES RETURNED UN- SERVED. THUS, THE ITA NO.1768 /MUM/2018 TRIVENI BIALETTI INDUSTRIES PRIVATE LIMITED 3 ASSESSING OFFICER, ULTIMATELY, CONCLUDED THAT THE P URCHASES MADE FROM THE CONCERNED PARTIES ARE NOT GENUINE AND, ACCORDINGLY, ADDED THEM TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED WITH SUCH ADDITION, ASSESSEE PREFERRED APPEAL BEFORE LEARNED CIT(A). HOWEVER, T HE LEARNED CIT(A) ALSO SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICE R. 4. THE LEARNED AR SUBMITTED, SIMPLY RELYING UPON TH E INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, THE ASSESSI NG OFFICER HAS TREATED THE PURCHASES AS NON-GENUINE. HE SUBMITTED, IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FURNISHED PURCHASE BIL LS, DELIVERY CHALLANS, SALES BILLS, QUANTITATIVE DETAILS OF PURCHASES, CON SUMPTION AND SALES. TO SUPPORT THE AFORESAID CONTENTION, THE LEARNED AR TO OK US THROUGH THE VARIOUS DOCUMENTARY EVIDENCES PLACED IN THE PAPER-BOOK. HE SUBMITTED, EVEN PARTY- WISE DETAILS OF SALES WAS FURNISHED BEFORE THE ASSE SSING OFFICER. HE SUBMITTED, IN THE FACE OF SAID DOCUMENTARY EVIDENCE S, THE PURCHASES MADE COULD NOT HAVE BEEN TREATED AS BOGUS. THE LEARNED AR SUBMITTED, THE ASSESSEE IS A REPUTED CONCERN AND, DURING THE YEAR, HAS EFFECTED PURCHASES OF MORE THAN RS 3 CRORE. HENCE, FOR SUCH A NEGLIGIBLE AMOUNT OF RS 50 LACS, THE ASSESSEE WOULD NOT HAVE INDULGED IN SUCH PRACTICE. WITHOUT PREJUDICE, THE LEARNED AR SUBMITTED, THE INFORMATION COLLECTED FRO M THE SALES TAX DEPARTMENT, INCLUDING THE ALLEGED STATEMENT FROM TH E CONCERNED DEALERS, WERE NEVER CONFRONTED TO THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS. HE SUBMITTED, NO OPPORTUNITY WAS PROV IDED TO THE ASSESSEE TO ITA NO.1768 /MUM/2018 TRIVENI BIALETTI INDUSTRIES PRIVATE LIMITED 4 EITHER OFFER HIS EXPLANATION IN RESPECT OF ADVERSE MATERIAL OR TO CROSS-EXAMINE THE PERSONS, WHOSE STATEMENTS WERE RELIED UPON. TH US, HE SUBMITTED, THE ADDITION MADE WITHOUT FOLLOWING THE PRINCIPLES OF N ATURAL JUSTICE IS BAD IN LAW. 5. THE LEARNED DR RELIED UPON THE OBSERVATIONS OF T HE ASSESSING OFFICER AND LEANED CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL ON RECORD. UNDISPUTEDLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, GOVERNMENT OF MAHARASHTRA, THAT PURCHAS ES WORTH RS 50,15,844/- MADE BY THE ASSESSEE FROM TWO PARTIES A RE NON-GENUINE, THE ASSESSING OFFICER HAD RE-OPENED THE ASSESSMENT AND, ULTIMATELY, ADDED THE SAID PURCHASES BY TREATING THEM AS NON-GENUINE. IT IS THE CONTENTION OF THE ASSESSEE THAT NOT ONLY SUPPORTING EVIDENCE INCLUDIN G DELIVERY CHALLANS WERE FURNISHED BEFORE THE ASSESSING OFFICER, THE ASSESSE E HAD ALSO FURNISHED QUANTITATIVE DETAILS OF PURCHASES, CONSUMPTION AND SALES. FURTHER LEARNED AR HAS ALSO CONTENDED BEFORE US THAT THE ADVERSE MATER IAL INCLUDING THE STATEMENT OF THIRD PARTIES AVAILABLE WITH THE ASSES SING OFFICER WERE NEVER CONFRONTED TO THE ASSESSEE, THOUGH, SUCH MATERIALS WERE UTILIZED FOR MAKING THE ADDITION. ON PERUSAL OF THE ORDERS PASSED BY T HE DEPARTMENTAL AUTHORITIES AND THE MATERIAL PLACED IN THE PAPER-BO OK, WE ARE OF THE VIEW THAT VARIOUS DOCUMENTARY EVIDENCES INCLUDING DELIVERY CH ALLAN AS WELL AS QUANTITATIVE DETAILS OF PURCHASES, CONSUMPTION AND SALE CLAIMED TO HAVE BEEN ITA NO.1768 /MUM/2018 TRIVENI BIALETTI INDUSTRIES PRIVATE LIMITED 5 FURNISHED BY ASSESSEE REQUIRES PROPER VERIFICATION WHICH, AS IT APPEARS, HAS NOT BEEN DONE BY THE DEPARTMENTAL AUTHORITIES. FUR THER, THE CONTENTION OF THE LEARNED AR THAT ADVERSE MATERIAL IN POSSESSION OF THE ASSESSING OFFICER SHOULD BE CONFRONTED TO THE ASSESSEE, MERITS CONSID ERATION. IT IS FAIRLY WELL SETTLED, IF THE ASSESSING OFFICER INTENDS TO MAKE A NY ADDITION ON THE BASIS OF ADVERSE MATERIAL IN HIS POSSESSION, RULES OF NATURA L JUSTICE DEMANDS THAT SUCH MATERIAL HAS TO BE CONFRONTED TO THE ASSESSEE. THU S, ON OVERALL CONSIDERATION OF FACTS AND MATERIAL ON RECORD, WE ARE INCLINED TO RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR DENOVO ADJUDICATION AFTER COM PLYING WITH THE RULES OF NATURAL JUSTICE AND ONLY AFTER AFFORDING DUE OPPORT UNITY OF BEING HEARD TO THE ASSESSEE. GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF SEPTEMBER, 2019. SD/- SD/- (M BALAGANESH) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED :25 TH SEPTEMBER, 2019. SA ITA NO.1768 /MUM/2018 TRIVENI BIALETTI INDUSTRIES PRIVATE LIMITED 6 COPY OF THE ORDER FORWARDED TO : 1. THE APP E L L ANT. 2. THE RESPONDENT. 3. T HE CIT(A), MUMBAI. 4. THE CIT 5. DR, E BENCH, ITAT, MUMBAI BY ORDER, //TRUE COPY// ( ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI