ACIT, Erode V. M/s. Agni Steels (P) Ltd., Erode

ITA 1808/CHNY/2009

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2481 (ITAT-CHENNAI)
• Duration Of Justice: 3 year(s) 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 11-04-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 04-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI (BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ) .. I.T.A. NO. 1808/MDS/2009 ASSESSMENT YEAR : 2005-06 ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-I, ERODE. (APPELLANT) V. M/S.AGNI STEELS (P) LTD., NO.58/1,AVVAIYAR STREET, TEACHERS COLONY, ERODE 638 011. PAN : AABCA 7819 F (RESPONDENT) APPELLANT BY : SMT.RUBY GEORGE, CIT D.R RESPONDENT BY : SHRI S.SRID HAR, ADVOCATE DATE OF HEARING : 11.04.13 DATE OF PRONOUNCEMENT : 17.05.13 O R D E R PER VIKAS AWASTHY, JUDICIAL MEMBER : THE APPEAL HAS BEEN FILED BY THE REVENUE ASSAILIN G THE ORDER OF CIT(A)-I, COIMBATORE DATED 30.09.2009 RELEVANT T O ASSESSMENT YEAR 2005-06. ITA. NO. 1808/MDS/09 2 2. THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND I S DEALING IN SCRAP. THE ASSESSEE FILED ITS RETURN OF INCOME FO R THE ASSESSMENT YEAR 2005-06 ON 27.10.2005 CALCULATING ITS BOOK PRO FITS UNDER SECTION 115 JB OF THE INCOME TAX ACT, 1961 (IN SHOT THE AC T) AND AS SUCH PAID TAX ON BOOK PROFIT OF ` 1,48,87,232/-. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS HELD THAT THE ASS ESSEE HAS INFLATED PURCHASE OF SCRAP TO REDUCE ITS INCOME TAX LIABILITY AND AS SUCH DISALLOWED THE PURCHASE OF SCRAP TO THE TUNE O F ` 3,13,75,277/- AS UNPROVED. AGGRIEVED AGAINST THE ASSESSMENT ORDER DATED 31.12 .2007, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A)-I, C OIMBATORE. THE CIT(A) SOUGHT FOR REMAND REPORT. ON THE BASIS OF R EMAND REPORT, CIT(A) PARTLY ALLOWED THE APPEAL OF ASSESSEE VIDE O RDER DATED 30.09.2009. THE REVENUE, AGGRIEVED AGAINST THE ORDER OF CIT(A ), HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL. ITA. NO. 1808/MDS/09 3 3. SMT. RUBY GEORGE, APPEARING ON BEHALF OF THE RE VENUE, SUBMITTED THAT THE CIT(A) HAS ERRED IN DELETING UN PROVED SCRAP PURCHASES FROM M/S.BRINDAVAN TRADERS, M/S.SWASTIK E NTERPRISES, M/S.SANJAY ENTERPRISES AND M/S.KHURATH STEELS. THE LD.D.R. SUBMITTED THAT M/S.BRINDAVAN TRADERS HAS FAILED TO PRODUCE BOOKS OF ACCOUNT OR THE SALE BILLS TO SHOW THAT THE TRANSACT IONS WERE GENUINE. IN RESPECT OF M/S.SWASTIK ENTERPRISES, LD. D.R CONT ENDED THAT THE SAID FIRM WAS A TENANT IN THE PREMISES OF WHICH ADD RESS WAS FURNISHED BY THE ASSESSEE. AN ENQUIRY WAS CONDUCTED BY THE ASSESSING OFFICER AND IT TRANSPIRED THAT THE FIRM H AD TAKEN THE SAID PREMISES ON RENT FOR THE PERIOD OF FIVE MONTHS ONLY . DURING THE PERIOD OF SAID FIVE MONTHS, NO BUSINESS ACTIVITY WA S CARRIED OUT BY M/S.SWASTIK ENTERPRISES. AS REGARDS THE OTHER TWO SUPPLIERS, I.E. M/S.SANJAY ENTERPRISES AND M/S.KHURTH STEELS, LD. D .R SUBMITTED THAT THE LETTERS SENT TO THE SUPPLIERS HAVE RETURN ED UN-SERVED LEADING TO THE PRESUMPTION THAT SUCH FIRMS DO NOT EXIST AS SUCH THERE IS NO QUESTION OF PURCHASE OF SCRAP BY ASSESSEE FROM THE SAID FIRMS. ITA. NO. 1808/MDS/09 4 4. PER CONTRA, SHRI S.SRIDHAR, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE, SUPPORTING THE ORDER OF THE CIT(A) SUBMIT TED THAT THE ADDITION CANNOT BE MADE ON THE BASIS OF SUSPICION A LONE. HE FURTHER CONTENDED THAT THE ASSESSEE PRODUCED NECESSARY EVID ENCES REQUIRED FOR ASSESSMENT. PAYMENTS WERE MADE BY THE ASSESSEE TO THE CONCERNED PARTIES THROUGH BANKING CHANNELS. THE COP IES OF THE PURCHASE INVOICES CARRYING STATUTORY REGISTRATION D ETAILS WERE FURNISHED AND THE EVIDENCE OF MOVEMENT OF GOODS WHE REIN THE INVOICES BEING PASSED THROUGH COMMERCIAL TAXES CHEC K POSTS/FOREST CHECK POSTS WERE PRODUCED BEFORE THE AUTHORITIES. THE EVIDENCE IN THE FORM OF BANK STATEMENTS TO PROVE THAT THE PARTI ES HAVE BEEN PAID THROUGH ACCOUNT PAYEE CHEQUES, WERE ALSO PRODUCED. THE ASSESSEE HAS DISCHARGED ITS ONUS. THE CIT(A) HAS ACCEPTED T HE EVIDENCES FURNISHED BY THE ASSESSEE, THEREFORE, THE APPEAL OF REVENUE IS LIABLE TO BE DISMISSED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY BOTH TH E PARTIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE REVENUE HAS ASSAILED THE ORDER OF CIT(A) DELETING UNPROVED S CRAP PURCHASES ITA. NO. 1808/MDS/09 5 FROM M/S.BRINDAVAN TRADERS, M/S.SWASTIK ENTERPRISES , M/S.SANJAY ENTERPRISES AND M/S.KHURATH STEELS. A PERUSAL OF O RDER OF THE CIT(A) SHOWS THAT THE ASSESSEE HAD PLACED ON RECORD DOCUME NTS VIZ. INVOICES, WHICH BEAR THE STATE SALES TAX REGISTRATI ON NUMBER AND CST NUMBER. THE ASSESSEE HAS ALSO GIVEN EVIDENCE O F MOVEMENT OF GOODS BY WAY OF THE SEALS PUT ON THE INVOICES AT CO MMERCIAL TAX CHECK POST/FOREST CHECK POST FROM THE SUPPLIERS TO THE ASSESSEE. THE ASSESSEE HAS ALSO PLACED ON RECORD EVIDENCES IN THE FORM OF BANK STATEMENTS TO PROVE THAT THE PAYMENTS WERE MADE TO THE RESPECTIVE PARTIES THROUGH ACCOUNT PAYEE CHEQUES. WE ARE OF T HE OPINION THAT THE ASSESSEE HAS DISCHARGED ITS ONUS IN SUPPORT OF ITS CONTENTION OF MAKING PURCHASES FROM THE PARTIES CONCERNED. D.R H AS CONTENDED THAT THE TWO PARTIES, VIZ. M/S.SANJAY ENTERPRISES A ND M/S.KHURATH STEELS ARE DUMMY FIRMS AS THEIR ADDRESSES WERE NOT TRACEABLE. WE FIND THAT THE ASSESSEE HAS PRODUCED DOCUMENTS TO PROVE PURCHASE OF SCRAP FROM THE SAID FIRMS, MOVEMENT OF GOODS FROM SCRAP DEALERS TO THE ASSESSEE AND THE PAYMENT MADE TO THE PARTIES CONCERNED THROUGH BANKING CHANNELS. THE ASSESSEE H AS NO CONTROL OVER THE MOVEMENT OF VENDORS OF SCRAP. THE FACT T HAT PAYMENT HAS ITA. NO. 1808/MDS/09 6 BEEN MADE TO SCRAP DEALERS IS NOT DENIED BY THE REV ENUE. WE ARE THEREFORE, OF THE CONSIDERED OPINION THAT THE ASSES SEE HAS DISCHARGED ITS LIABILITY BY GIVING THE DETAILS OF V ENDORS, PURCHASE INVOICES ALONG WITH THE PROOF OF PAYMENTS MADE TO T HEM. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A). THE REFORE, THE APPEAL OF REVENUE IS DISMISSED BEING DEVOID OF MERIT. 6. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED ON FRIDAY , THE 17 TH MAY 2013 AT CHENNAI. SD/- SD/- ( N.S.SAINI ) (VIKAS AWASTHY ) ACCOUNTAT MEMBER JUDIC IAL MEMBER CHENNAI, DATED THE 17 TH MAY , 2013. K S SUNDARAM. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE