Income-tax Officer, V. M/s. Maa Saraswat Steel Industries, Nashik

ITA 1868/PUN/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9308 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 29-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Bogus purchase
• Section: 143(3); 148

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1868/PUN/2016 / ASSESSMENT YEAR : 2011-12 INCOME TAX OFFICER, WARD 1 (4), NASHIK. . / APPELLANT V/S M/S. MAA SARASWATI STEEL INDUSTRIES, PLOT NO.D-15, MIDC, MALEGAON, SINNER, NASHIK 423 103. PAN : AAQFM6540H. . / RESPONDENT ASSESSEE BY : SMT. DEEPA KHARE. REVENUE BY : SHRI MUKESH JHA, JCIT. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) 1, NASHIK DT.01.06.2016 FOR THE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- 2.1 ASSESSEE IS A PARTNERSHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL BARS AND OTHER STEEL PR ODUCTS. / DATE OF HEARING : 19.02.2018 / DATE OF PRONOUNCEMENT: 23.02.2018 2 ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 201 1-12 ON 02.09.2011 DECLARING TOTAL INCOME OF RS.2,50,401/-. THE RETURN OF INCOME WAS PROCESSED U/S 143(1)(A) OF THE ACT. SUBSEQUENTLY, INFORMATION WAS RECEIVED FROM INVESTIGATION S ECTION THAT THE SALES TAX DEPARTMENT HAS INFORMED THAT THE ASSESSEE HA D MADE PURCHASES FROM CERTAIN PARTIES NAMELY, N.R. TRADERS, OM SAI ENTERPRISES AND EMCO INDUSTRIES, WHO ARE HAWALA PART IES. ACCORDINGLY, NOTICE U/S 148 OF THE ACT WAS ISSUED ON 30.0 9.2013 AND IN RESPONSE TO WHICH, ASSESSEE SUBMITTED THAT ORIGINA L RETURN FILED BE CONSIDERED TO BE THE RETURN OF INCOME AGAINST TH E NOTICE U/S 148 OF THE ACT. THEREAFTER, ASSESSMENT WAS FRAMED U/S 143(3) R.W.S. 147 OF THE ACT AND THE TOTAL INCOME WAS DETERMINE D AT RS.46,51,230/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CA RRIED THE MATTER BEFORE LD.CIT(A), WHO VIDE ORDER DT.01.06.2016 (IN APPEAL NO.NSK/CIT(A)-1/111/2015-16) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS : 1. W H E TH E R ON TH E F A CTS A ND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-1, N A SHIK WAS JUS T IFI E D IN DELETING THE ADDITION OF RS.33,00,620 / - ON ACCOUN T OF A LL EG ED BOGUS PURCHASES FROM HAWALA DEALERS/PARTIES. 2. WH ET H E R ON THE FAC T S A ND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-1 , N AS HIK WA S JUSTI F I E D IN DELETING THE PURCHASES TREATED AS BOGUS WHEN A P PE LL A NT H A D NOT B EE N A BL E TO PRODUCE THE CERTAIN PARTIES FROM WHOM PURCHASES WE R E M A D E W H E N L E TT E RS S E NT TO THE PARTIES WERE RETURNED UNDELIVERED OR THE PARTIES DID N OT R ES P O ND? 3. WHE TH E R TH E L EA RN E D CIT(A)-1 , N A SHIK ERRED IN ASSUMING THAT THE PURCHASES WE R E ONL Y INFL A T E D WH E N IT WAS CLEAR FROM THE CONDUCT OF THE ASSESSEE, TH E PA RT IES FO UN D M I SSIN G AND R E SULTS OF THE INVESTIGATION OF ANOTHER GOVT. DE P A RTM E N T (S A L E S T AX ) , THAT THE PURCHASES COULD NOT BE PROVED AS L IN E A ND T H E R E F O R E TH E DI SA LLOWANCE BY THE AO WAS JUSTIFIED 4. WH E TH E R TH E L EA RN E D CIT(A)-1, NASHIK ERRED IN PRESUMING THAT 3 SIMPLY BECAU SE N O A DDITION WAS M A DE IN THE C A SE OF SALES, IT WAS A CCEPTED AS GENUINE FUR T H E R A SS UMIN G T H A T TH E R E B Y PURCHASES SHOULD BE G E NUINE? 5. W HET H E R TH E L EA RN E D CIT(A)-1, N A SHIK ERRED IN ACCEPTING THE AFFIDAVITS SUPPLI E R S W ITHOUT A N Y E XPLAN A TION FROM THE ASSESSEE WHY THE SUPPLIERS COULD N OT A P PEA R B E F O R E TH E AO W H E N TH E Y WERE CALLED FOR EXAMINATION? 6. T H E A PP E LL AN T PRAYS T H A T TH E ORD E R OF THE LEARN E D CIT(A)-1, NASHIK MAY PLEA SE BE CA N CE LL ED A ND TH E OR D E R OF ASS E SSING OFFICER MA Y PL E ASE BE RESTORED . 3. BEFORE US, AT THE OUTSET, LD.D.R. SUBMITTED THAT THOUGH THE REVENUE HAS RAISED VARIOUS GROUNDS BUT ALL THE GROUNDS ARE INTER- CONNECTED AND THE SOLE CONTROVERSY IS WITH RESPECT TO DELETING THE ADDITION OF RS.33,00,620/- ON ACCOUNT OF ALLEGED BOGUS PURCH ASES FROM HAWALA DEALERS / PARTIES. 4. AO IN THE RE-ASSESSMENT ORDER PASSED U/S 143(3) R.W .S. 147 OF THE ACT HAS NOTED THAT INFORMATION WAS RECEIVED FROM S ALES TAX DEPARTMENT WHEREIN THE STATEMENTS OF HAWALA PARTIES WER E RECORDED AND IT WAS SUBMITTED BY THEM THAT THEY HAD NOT DONE ANY GENUINE BUSINESS TRANSACTIONS OF PURCHASES, SALES ETC ., IN THE NAME OF THE FIRMS BUT THEY WERE ONLY ISSUING / RECEIVING T AX INVOICE BILLS WITHOUT DELIVERY RECEIPT OF GOODS. BASED ON THE AFORESAID INFORMATION RECEIVED FROM THE SALES TAX DEPARTMEN T, ASSESSEE WAS ASKED TO SUBMIT THE COPIES OF PURCHASE BILLS, DELIVERY CHALLANS, PAYMENT DETAILS ETC., IN SUPPORT OF THE PURCHASES MADE BY IT FROM THE ALLEGED HAWALA PARTIES AND ALSO TO PRODUCE PARTIES TO SUBSTANTIATE THE PURCHASES. AO NOTED THAT ASSESSE E FAILED TO PRODUCE THE RELEVANT PARTIES BUT HAD SUBMITTED THAT T HE PURCHASES MADE BY IT WERE GENUINE. THE SUBMISSIONS OF TH E ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE AO. HE CONSID ERED THE 4 TOTAL PURCHASES OF RS.44,00,827/- MADE FROM THE ALLEGED HAW ALA PARTIES TO BE BOGUS PURCHASES AND MADE ITS ADDITION. AG GRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFO RE LD.CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE HAS NOTED THAT THE CASE WAS NOT BOGUS PURCHASES BUT A CASE OF INFLATED PURCHASES AND AT BEST FROM BOGUS PARTIES. SHE THEREFOR E DIRECTED THE AO TO RESTRICT THE DISALLOWANCE TO 25% OF RS.44,00,82 7/- I.E., RS.11,00,207/-. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVE NUE IS NOW IN APPEAL BEFORE US. 5. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT AGAINST THE ORDER OF LD.CIT(A), WHEREBY PARTIAL RELIEF WAS GRANTED TO AS SESSEE, ASSESSEE HAD CARRIED THE MATTER BEFORE THE TRIBUNAL. S HE SUBMITTED THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL BY A CONSOLIDATED ORDER COMPRISING OF VARIOUS ASSESSEES INCLUDING THE ASSESSEE, BY ORDER DT.28.04.2007 IN (ITA NO.1670 AND 1671/PUN/2016 FOR A.YS.2010-11 AND 2011-12) HAS DELETED THE ADDITION. SHE POINTED TO PARA 43 OF THE ORDER OF CO-ORDIN ATE BENCH OF THE TRIBUNAL. SHE THEREFORE SUBMITTED SINCE THE TRIBUNAL HAS ALREADY DECIDED THE ISSUE IN FAVOUR OF THE AS SESSEE AND THEREFORE THE GROUNDS RAISED BY THE REVENUE HAVE BECOME INFRUCTUOUS AND THEREFORE APPEAL OF REVENUE READS TO BE DISMISSED. LD.D.R. DID NOT CONTROVERT THE SUBMISSIONS MAD E BY LD.A.R. BUT HOWEVER SUPPORTED THE ORDER OF AO. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT 5 TO DELETING THE ADDITION ON ACCOUNT OF ALLEGED BOGUS PUR CHASES FROM HAWALA DEALERS / PARTIES. WE FIND THAT THE CO-ORDIN ATE BENCH OF THE TRIBUNAL BY A CONSOLIDATED ORDER DT.28.04.201 7 WHEREIN, ASSESSEE WAS ALSO A PARTY, HAS DECIDED THE APPE ALS OF THE ASSESSEE IN A.Y. 2010-11 AND 2011-12 IN FAVOUR OF ASSESS EE BY HOLDING AS UNDER : 43. SIMILARLY, IN THE CASE OF MAA SARASWATI STEEL INDUSTRIES, THE ARGUMENT OF THE LEARNED AUTHORIZED REPRESENTATIVE F OR THE ASSESSEE WAS THAT THE COPY OF STATEMENT HAS NOT BEE N SUPPLIED NOR ANY EVIDENCE HAS BEEN CONFRONTED TO THE ASSESSEE. THE ASSESSEE WAS ALSO MAINTAINING INWARD RECORDS OF GOODS PURCHA SED AND THEIR CONSUMPTION IN ITEMS, WHICH ARE EXCISABLE IN NATURE . FOLLOWING THE REASONING IN M/S. CHETAN ENTERPRISES VS. ACIT (SUPR A), THE ADDITION IS DELETED. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE THUS, ALLOWED AND HENCE, APPEAL OF ASSESSEE IS ALLOWED. SINCE THE ADDITION HAS BEEN DELETED BY THE CO-ORDINATE B ENCH OF THE TRIBUNAL, WE ARE OF THE VIEW THAT THE PRESENT GROUNDS RAISED B Y THE REVENUE HAVE BEEN RENDERED INFRACTUOUS AND THUS T HE SAME ARE DISMISSED. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 23 RD DAY OF FEBRUARY, 2018. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 23 RD FEBRUARY, 2018. YAMINI 6 #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A) 1, NASHIK. PR.CIT-1, NASHIK. '#$ %%&',) &', / DR, ITAT, A PUNE; $,-./ GUARD FILE. / BY ORDER // TRUE COPY // // TRUE COPY // /01%2&3 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.