The DCITS.K. Circle, Himatnagar V. M/s. Tarsheel Associates, Himatnagar

ITA 1853/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6627 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 09-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 04-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAVNESH KULSHRESTHA
• Assessee Lawyers: K C THAKKAR
• Keywords: Bogus purchase
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI, JM AND A. K. GARODIA , AM) ITA NO.1853/AHD/2009 A. Y.: 2003-04 THE D. C. I. T., SABARKANTHA CIRCLE, 2 ND FLOOR, BEHIND MEHTA PETROL PUMP, AMBALAL COMPLEX, HIMMATNAGAR, DIST. SABARKANTHA VS M/S. TARSHEEL ASSOCIATES, ROYAL COMPLEX, OPP. R.T.O., MEHTAPURA, HIMMATNAGAR PA NO. AACFT 7792 C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI BHAVNESH KULSHRESTHA, SR. DR RESPONDENT BY SHRI K. C. THAKKAR, AR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-X, AHMEDABAD DATED 27-02-2009 FOR ASSESSMENT YEAR 2003-04, CHALL ENGING THE DELETION OF ADDITION OF RS.7 LACS MADE BY THE AO ON ACCOUNT OF BOGUS PURCHASES OF ASPHALT FROM M/S. SONAL COAL TAR COMPA NY. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT DURING T HE RELEVANT PERIOD, ASSESSEE HAD OBTAINED CONTRACT WORK FROM M/S. NG-GH (JV) AS SUB- CONTRACTOR. IN THE ASSESSMENT YEAR 2004-05, ADDITIO N OF RS.37.79 LACS WAS MADE IN THE INCOME OF THE ASSESSEE ON ACCOUNT O F BOGUS PURCHASES. SIMILAR ADDITION WAS MADE IN THE CASE OF M/S. NG-GH (JV) FOR ALLEGED BOGUS PURCHASES FROM M/S. SONAL CO AL TAR COMPANY. THE LEARNED CIT(A) IN THE CASE OF M/S. NG- GH (JV) ITA NO.1853/AHD/2009 THE DCIT, SABARKANTHA CIRCLE VS M/S. TARSHEEL ASSOC IATES 2 DELETED THE ADDITIONS ON ACCOUNT OF ALLEGED BOGUS P URCHASES FROM M/S. SONAL COAL TAR COMPANY DIRECTING THE AO TO EXA MINE THE SAID BOGUS PURCHASES IN THE CASE OF THE ASSESSEE. THE C ASE OF THE ASSESSEE WAS REOPENED FOR ASSESSMENT YEAR 2004-05 A ND ADDITION WAS MADE ON ACCOUNT OF UNACCOUNTED PURCHASES FROM M /S. SONAL COAL TAR COMPANY. SINCE THE ASSESSEE HAD MADE PAYME NT OF RS.7 LACS TO M/S. SONAL COAL TAR COMPANY IN PREVIOUS YEA R TO THE ASSESSMENT YEAR 2005-06 PERTAINING TO THE ASSESSMEN T YEAR UNDER REFERENCE, THE AO ALSO INITIATED PROCEEDINGS U/S 14 7 OF THE IT ACT. THE APPEAL OF THE ASSESSEE WAS DISMISSED BY THE LEA RNED CIT(A). HOWEVER, AS REGARDS ADDITION OF RS.7 LACS, THE AO N OTED THAT THE ASSESSEE HAD MADE PAYMENT OF RS.7 LACS TO M/S. SONA L COAL TAR COMPANY WHICH PERTAINS TO THE ASSESSMENT YEAR UNDER APPEAL. ADDITION WAS ACCORDINGLY MADE. IT WAS SUBMITTED BEF ORE THE LEARNED CIT(A) THAT THE AO HAS NOT MADE OUT ANY CASE AGAINS T THE ASSESSEE AND THE OBSERVATION DID NOT PERTAIN TO THE ASSESSME NT YEAR UNDER APPEAL. ADDITION WAS MADE IN ASSESSMENT YEAR 2004-0 5 WHICH HAS BEEN DELETED. THE LEARNED CIT(A) ON GOING THROUGH T HE FACTS AND MATERIAL ON RECORD NOTED THAT THE AO HAS MADE THE A BOVE ADDITION IN RESPECT OF PURCHASES ALLEGEDLY MADE FROM M/S. SONAL COAL TAR COMPANY. THE ASSESSEE DURING THE RELEVANT PERIOD HA D MADE PURCHASES TO THE TUNE OF RS.38,83,684/-, HOWEVER TH E AO DISALLOWED ONLY RS.7 LACS. THE AO WITHOUT ANALYZING THE COMPLE TE PURCHASES MADE THE ADDITION WITHOUT ANY REASON. THE LEARNED C IT(A), THEREFORE, NOTED THAT ADDITION IS SIMPLY MADE ON THE BASIS OF SURMISES AND CONJECTURES AND ADDITION WAS ACCORDINGLY DELETED. ITA NO.1853/AHD/2009 THE DCIT, SABARKANTHA CIRCLE VS M/S. TARSHEEL ASSOC IATES 3 3. THE LEARNED DR RELIED ON THE ORDER OF THE AO. ON THE OTHER HAND THE LEARNED COUNSEL FOR THE ASSESSEE REITERATE D THE SU9BMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 4. ON GOING THROUGH THE PAPER BOOK WE FIND THAT THE AO IN ASSESSMENT YEAR 2005-06 (PB-26) MADE THE SIMILAR AD DITIONS AGAINST THE ASSESSEE WHICH WERE DELETED BY THE LEARNED CIT( A) VIDE ORDER DATED 30-05-2007 (PB-30). THE LEARNED CIT(A) HOWEVE R, DIRECTED THE AO TO TAKE APPROPRIATE STEPS TO WHICH THE EXPENDITU RE BELONG. FURTHER, IN ASSESSMENT YEAR 2004-05, THE DEPARTMENT WENT IN APPEAL BEFORE THE TRIBUNAL ON THE SAME MATTER IN ISSUE WIT H REGARD TO BOGUS PURCHASES OF BITUMEN AND THE DEPARTMENTAL APPEAL HA S BEEN DISMISSED BY THE TRIBUNAL IN ITA NO.3341/AHD/2008 V IDE ORDER DATED 11-02-2009. EARLIER, THE AO MADE ADDITION OF RS.7 L ACS IN ASSESSMENT YEAR 2005-06 WHICH WERE DELETED BY THE L EARNED CIT(A). IT, THEREFORE, APPEARS THAT THE AO ACTING AS PER TH E DIRECTION OF THE LEARNED CIT(A) MADE THE ADDITION OF RS.7 LACS IN TH E ASSESSMENT YEAR UNDER APPEAL I.E. 2003-04, HOWEVER, NO REASON HAS B EEN GIVEN AS TO WHY THE ADDITION IS MADE IN THE YEAR UNDER APPEAL. MERELY BECAUSE THE ASSESSEE MADE PURCHASES FROM M/S. SONAL COAL TA R COMPANY BY ITSELF IS NO GROUND TO REPEAT THE ADDITION IN THE A SSESSMENT YEAR UNDER APPEAL ON THE BASIS OF THE EARLIER HISTORY IN OTHER ASSESSMENT YEARS IN WHICH ALSO NO ADDITION HAS BEEN SUSTAINED BECAUSE OF THE ORDER OF THE LEARNED CIT(A) AND FURTHER DEPARTMENTA L APPEAL IS DISMISSED BY THE TRIBUNAL IN ASSESSMENT YEAR 2004-0 5. CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY JUSTIFICATION FOR THE AO TO HAVE MADE THE ADDITION. THE LEARNED CIT(A) ITA NO.1853/AHD/2009 THE DCIT, SABARKANTHA CIRCLE VS M/S. TARSHEEL ASSOC IATES 4 ON PROPER APPRECIATION OF THE FACTS AND THE MATERIA L ON RECORD RIGHTLY DELETED THE ADDITION. THERE IS NO MERIT IN THE APPE AL OF THE REVENUE. SAME IS ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 13-05-2011 SD/- SD/- (A. K. GARODIA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 13-05-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD