Rajmandhir Jewellers Pvt. Ltd. , CHENNAI V. ITO Corporate Ward 5(4) , CHENNAI

ITA 2017/CHNY/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5886 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 21-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B SAGADEVAN JCIT D R
• Assessee Lawyers: SUSHMA HARINI
• Keywords: Reopening of assessment; Bogus purchase; Principle of natural justice
• Section: 143(3); 147

Judgement Text

, D/ SMC , IN THE INCOME TAX APPELLATE TRIBUNAL D/SMC BENCH, CHENNAI . , BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER I.T.A.NO.2017 /MDS./2017 ( ASSESSMENT YEAR : 2009-10) M/S. RAJMANDHIR JEWELLERS PVT. LTD , NO.45,CATHEDRAL ROAD, STELLA MARYS COLLEGE, CHENNAI 600 086. VS. THE INCOME TAX OFFICER, CORPORATE WARD 5(4), CHENNAI. PAN AABCR 5719 B ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MS.SUSHMA HARINI, ADVOCATE / RESPONDENT BY : MR.B.SAGADEVAN, JCIT, D.R ! ' / DATE OF HEARING : 01.11.2017 #$%& ! ' /DATE OF PRONOUNCEMENT : 01.11.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)-3, CHENNA I DATED 30.06.2017 PERTAINING TO ASSESSMENT YEAR 2009-10. ITA NO. 2017/MDS/2017 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS F OR ADJUDICATION. 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APP EALS) DATED 30.06.2017 IS ILLEGAL, OPPOSED TO FACTS AND LIABLE TO BE SET ASIDE IN FULL. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED I N UPHOLDING THE JURISDICTION OF THE ASSESSING OFFICER TO RE-OPEN TH E ASSESSMENT. 3.1 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION ON ACCOUNT OF BOGUS PURCHASES OF RS.5,28,5 13/-. 3.2 THE COMMISSIONER OF INCOME TAX (APPEALS) HAS GO NE WRONG IN NOT ADJUDICATING THE APPEAL IN THE PROPER PERSPECTIVE A ND INSTEAD ADJUDICATED ON ASSUMPTIONS AND PRESUMPTIONS. 3.3 THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO NOTE THAT ALL EVIDENCES IN SUPPORT OF THE CLAIM WERE DULY PLACED BEFORE THE LOWER AUTHORITIES. 3.4 THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN STATING THAT THE QUESTION OF CROSS EXAMINATION DOES NOT ARISE AS THE APPELLANT IS IN TOUCH WITH THE SELLER. THIS IS ARBITRARY, ILLEGAL AND AMO UNTS TO GROSS VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A COMPANY AND FILED A RETURN OF INCOME FOR THE ASSESSMENT YEA R 2009-2010, ON 24/09/2009 ADMITTING A TOTAL INCOME OF ` 807,335/- AND THE RETURN WAS PROCESSED U/S 143(1). SUBSEQUENTLY THE CASE WAS SEL ECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) READ WITH SE CTION 147 OF INCOME TAX ACT, 1961. LATER THE ASSESSMENT WAS REOPENED V IDE NOTICE ITA NO. 2017/MDS/2017 3 U/S.148 OF THE ACT DATED 14.10.2015 BY RECORDING R EASONS AS FOLLOWS:- THE ASSESSEE COMPANY M/S.RAJMANDIR JEWELLERS PVT L TD., DURING THE FINANCIAL YEAR 2009-10 HAS TAKEN ACCOMMODATION ENTR IES IN THE NATURE OF BOGUS PURCHASES AMOUNTING TO ` 5,28,513/- FROM SHRI GAUTAM JAIN & OTHER GROUP. CONSEQUENT TO THIS, THE ASSESSEE FILED A LETTER ON 17.11.2015 STATING THAT THE RETURN FILED ON 24.09.2009 TO BE TREATED A S RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S.148 OF THE ACT. BEFO RE THE LD. ASSESSING OFFICER, THE ASSESSEE OBJECTED THE REOPEN ING OF THE ASSESSMENT AND ALSO PUT OBJECTION FOR TREATING THE IMPUGNED PURCHASE AS BOGUS PURCHASE.THE ASSESSING OFFICER CO MPLETED THE ASSESSMENT U/S 143(3) BY ORDER DATED 29/09/2016 ASS ESSING THE TOTAL INCOME AT ` 13,35,868/- AND RAISING A DEMAND OF ` 318,516/-. IN COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER HA S MADE AN ADDITION OF ` 5,28,513/- ON ACCOUNT OF ALLEGED BOGUS PURCHASE. AGGRIEVED BY THE ORDER OF LD. ASSESSING OFFICER, TH E ASSESSEE CARRIED THE APPEAL BEFORE THE LD.CIT(A) CHALLENGING THE ADD ITION OF ITA NO. 2017/MDS/2017 4 ` 5,28,513/- ON ACCOUNT OF ALLEGED BOGUS PURCHASE AND ALSO CONTENDED AS FOLLOWS:- THAT THE CONTENTION TO MAKE AN ADDITION OF ` 5,28,513/- ON ACCOUNT OF ALLEGED BOGUS PURCHASES IS NOT JUSTIFIED. THE SELLER IS DULY REGISTERED DEALER WITH GST AND T IN NUMBER AND CST NO.24220901559. THE ASSESSEE HAS PAID 3,28,513/- BY CHEQUE NO.53218 1 ON 21.01.2009 AND RS.2,00,000 BY CHEQUE NO.303208 ON 02.02.2009. THE APPELLANT HAS INCLUDED THIS PURCHASE OF GOODS I N STOCK AND LATER SOLD AND PROFIT HAS BEEN DULY OFFERED FOR TAX. THE SAME HAS BEEN SOLD TO MR.RAKESH RAJ AND PAYMENT HAS BEEN RECEIVED BY CHEQUE NO.255434 D ATED 15 TH DECEMBER, 2008. THE ASSESSING OFFICER IS RELYING ON A STATEMENT REC ORDED FROM ONE MR. DHARMENDRA BABEL WHEREIN HE HAS STATED THAT HE HAS ISSUED DUMMY SALES BILL AND THE APPELLANT HAS NOT ACTUALLY MADE THIS PURCHA SE. THE APPELLANT WOULD LIKE TO BRING TO YOUR KIND AUTHORITYS NOTICE THAT AN AF FIDAVIT FROM MR. DHARMENDRA BABEL HAS BEEN FILED WHEREIN HE CLEARLY STATES THAT THE STATEMENT RECORDED FROM HIM BY THE INCOME TAX DEPARTMENT WAS UNDER PRESSURE AND COERCION. SUCH AFFIDAVIT WAS FILED BY SUCH SELLER ON THE VERY NEXT DAY FROM THE DATE OF THE SWORN STATEMENT. 3. WE HAVE ALSO FILED LETTER DATED 08.09.2016 (COPY ENCLOSED) WHEREBY SUBMITTED THE FOLLOWING TO ASSESSING OFFICER. A) WE HAVE GENUINELY PURCHASED CUT AND POLISHED DIA MONDS FOR RS.528513 ON 05.12.2008. ITA NO. 2017/MDS/2017 5 B) THE SELLER IS DULY REGISTERED DEALER WITH GST & TIN NO. & CST NO.24220901559. C) WE HAVE PAID RS.328516 BY CHEQUE NO.532181 ON 21 .01.2009 AND RS.200000 ON CHEQUE NO.303208 ON 02.02.2009. D) THE PURCHASE OF GOODS IS INCLUDED IN OUR STOCK A ND LATER SOLD AND PROFIT IS DULY OFFERED FOR TAX. E) WE ARE ENCLOSING HEREWITH AFFIDAVIT FROM MR.DHAR MENDRA KUMAR BABEL WHEREIN MR. DHARMENDRA KUMAR BABEL HAS CLEARLY EXPL AINED THAT THE STATEMENT RECORDED FROM HIM BY THE INCOME TAX DEPARTMENT WAS UNDER PRESSURE FROM INCOME TAX DEPARTMENT. F) WE ARE ALSO ENCLOSING HEREWITH THE COPY OF THE M AIL RECEIVED FROM MR. DHARMENDRA KUMAR BABEL ENCLOSING HIS RETURN OF INCO ME, BANK STATEMENT AND CONFIRMATION. G) HENCE WE REQUEST YOU TO DROP THE PROCEEDINGS AND OBLIGE. H) IN CASE YOUR KIND AUTHORITY FEELS THAT THE PROCE EDINGS CANNOT BE DROPPED. WE REQUEST YOU TO ALLOW US CROSS EXAMINATION OF THE PE RSON WHO HAS MADE THE SWORN STATEMENT THAT THE PURCHASE IS BOGUS. 3.1 LD. CIT(A) AGREED WITH ADDITION MADE BY LD. AS SESSING OFFICER ON ACCOUNT OF BOGUS PURCHASE OF ` 5,28,513/-. AGAINST THE ORDER OF LD.CIT(A), NOW THE ASSESSEE IS IN APPEAL BEFORE U S. 4. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE PRIMARY OBJECTION RAISED BY THE ASSESS EE BEFORE ME IS WITH REGARD TO REOPENING OF ASSESSMENT AND IT WAS R AISED FIRST TIME ITA NO. 2017/MDS/2017 6 BEFORE THE TRIBUNAL. IN VIEW OF THIS, IN THE INTER EST OF JUSTICE I AM INCLINED TO REMIT THE ISSUE OF RE-OPENING OF ASSESS MENT TO THE FILE OF LD.CIT(A) TO GIVE FINDING ON THE SAME, THEREAFTER I F THE ISSUE IN RELATING TO ADDITION OF ` 5,28,513/- REQUIRES ADJUDICATION, HE HAS TO DECIDE IT ON MERIT. IN DOING SO, LD.CIT(A) SHALL G IVE OPPORTUNITY OF CROSS-EXAMINATION OF THE PARTIES, IF THE THIRD PART IES STATEMENT RELIED BY AO FOR MAKING THE ADDITION. WITH THIS OBSERVAT ION, I REMIT THIS ISSUE TO THE FILE OF LD.CIT(A) FOR FRESH CONSIDERAT ION. 5. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 01 ST NOVEMBER, 2017. SD/- ( ) ( CHANDRA POOJARI ) /ACCOUNTANT MEMBER CHENNAI, DATED THE 01 ST NOVEMBER, 2017 . K S SUNDARAM. ' ( )!*+ ,+%! / COPY TO: 1 . / APPELLANT 3. ' ' -! () / CIT(A) 5. +0 1 )!)23 / DR 2. / RESPONDENT 4. ' ' -! / CIT 6. 1 45 6 / GF