Yogesh Shivajirao Patil, Jalna V. Income-tax Officer,

ITA 2065/PUN/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9367 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR CHAWARE
• Keywords: Depreciation; Additional evidence
• Section: 143(3); 142(1); 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 2065 /P U N/201 6 / ASSESSMENT YEAR : 20 09 - 10 YOGESH SHIVAJIRAO PATIL, C/O SHIVAJIRAO SAMBHAJIRAO PATIL, VRANDAVAN COLONY, KACHERI ROAD, OLD JALNA. . / APPELLANT PAN: A RYPP0977C VS. THE INCOME TAX OFFICER , WARD 1, JALNA . / RESPONDENT / APPELLANT BY : S HRI KISHOR PHADKE / RESPONDENT BY : SHRI ANIL KUMAR CHAWARE / DATE OF HEARING : 30 .0 5 . 2017 / DATE OF PRONOUNCEME NT: 07 . 0 6 .201 7 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT (A) - I, AURANGABAD , DATED 15 . 07 .201 6 RELATING TO ASSESSMENT YEAR 20 09 - 10 AGAINST ORDER PASSED UNDER SECTION 143(3) R.W.S. 147 OF THE IN COME - TAX ACT , 1961 (IN SHORT THE ACT) . ITA NO. 2065 /P U N/20 1 6 YOGESH SHIVAJIRAO PATIL 2 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX APPEAL - I, AURANGABAD ERRED IN CONFIRMING THE ASSESSMENT ORDER PAS SED BY THE INCOME TAX OFFICER, WARD 1, JALNA ON TOTAL INCOME OF RS.12,23,300/ - AS AGAINST THE INCOME OF RS.2,92,210/ - RETURN BY THE APPELLANT. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX APPEAL - I, AURANGABAD ERR ED IN NOT ALLOWING DEPRECIATION OF RS.4,25,181/ - . 3. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX APPEAL - I, AURANGABAD FURTHER ERRED IN CONFIRMING THE ADDITION OF RS.5,05,908/ - ON ACCOUNT OF ALLEGED INFLATED PURCHAS ES. THE ADDITION IS NOT WELL FOUNDED AND DESERVES TO BE DELETED. 3. THE GROUND OF APPEAL NO.1 RAISED BY THE ASSESSEE IS GENERAL IN NATURE AND HENCE, THE SAME IS DISMISSED. 4. THE ISSUE IN GROUND OF APPEAL NO.2 RAISED BY THE ASSESSEE IS AGAINST NON - ALLOW ANCE OF DEPRECIATION OF RS.4,25,181/ - . 5. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD FILED THE RETURN OF INCOME AT RS. 7,17,390/ - . THE SAID RETURN OF INCOME WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. THE ASSE SSING OFFICER RECEIVED INFORMATION THAT THE ASSESSEE HAD MADE PURCHASES FROM HAWALA DEALERS. ACCORDINGLY, REASONS WERE RECORDED FOR REOPENING THE ASSESSMENT AND THEREAFTER, NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED. THE ASSESSEE FAILED TO FURNISH AN Y RETURN OF INCOME IN RESPONSE TO THE SAID NOTICE ISSUED UNDER SECTION 148 OF THE ACT AND ALSO IN RESPONSE TO NOTICE ISSUED THEREAFTER UNDER SECTION 142(1) OF THE ACT. THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFICER IN RESPONSE TO VARIOUS NOTIC ES ISSUED AND HENCE, SHOW CAUSE ITA NO. 2065 /P U N/20 1 6 YOGESH SHIVAJIRAO PATIL 3 NOTICE WAS ISSUED AS TO WHY THE ASSESSMENT SHOULD NOT BE COMPLETED UNDER SECTION 144 OF THE ACT BY MAKING AN ADDITION OF RS.5,05,908/ - . THE ASSESSING OFFICER REFERRED TO THE INVESTIGATION MADE BY THE SALES TAX DEPARTMENT IN RESPECT OF HAWALA DEALERS. THE ASSESSEE WAS SPECIFICALLY ASKED TO PRODUCE PURCHASE BILLS, EVIDENCE OF TRANSPORTATION AND CIRCUMSTANTIAL EVIDENCE AND THE FORMAL LORRY RECEIPTS, DELIVERY CHALLANS, ETC. THE ASSESSEE EXPLAINED THAT IT HAD PURCHASED THE GOOD S FROM REGISTERED DEALER AND PAYMENT WAS MADE THROUGH BANK AND IT WAS FURTHER CONTENDED THAT THOUGH DELIVERY WAS MADE TO THE ASSESSEE. THE ASSESSING OFFICER REJECTING THE PLEA OF ASSESSEE, MADE AN ADDITION OF RS.5,05,908/ - ON ACCOUNT OF BOGUS AND INFLATED PURCHASES. 6. BEFORE THE CIT(A), THE FIRST ISSUE RAISED BY THE ASSESSEE WAS AGAINST THE ORDER OF ASSESSING OFFICER IN TAKING THE RETURNED INCOME AT RS.7,1 7 ,390/ - INSTEAD OF CORRECT INCOME RETURNED BY THE ASSESSEE AT RS.2,92,210/ - . THE NEXT ISSUE RAISED BY THE ASSESSEE WAS AGAINST THE ADDITION ON ACCOUNT OF INFLATED PURCHASES OF RS.5,05,908/ - . THE ASSESSEE EXPLAINED THAT IT HAD FILED THE RETURN OF INCOME DECLARING RS.2,92,210/ - ON 29.09.2009 . THE SAID RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND THE INCOME WAS COMPUTED AT RS.7,17,390/ - . THE DIFFERENCE IN INCOME WAS DUE TO THE DISALLOWANCE OF DEPRECIATION OF RS.4,25,181/ - CLAIMED BY THE ASSESSEE. IT WAS POINTED OUT THAT AN APPLICATION WAS FILED WITH CPC, BANGALORE ON 11.08.2010 AND ON 05.04. 2011 FOR ALLOWING CLAIM OF DEPRECIATION. THE ASSESSEE SUBMITTED THAT THE APPLICATION MOVED BY THE ASSESSEE BEFORE THE CPC, BANGALORE WAS REJECTED SINCE THE CASE OF ASSESSEE WAS TAKEN UP FOR SCRUTINY. THE CIT(A) DIRECTED THE ASSESSEE TO FURNISH NECESSARY DETAILS / BILLS FOR PURCHASE OF PLANT AND MACHINERY OF ITA NO. 2065 /P U N/20 1 6 YOGESH SHIVAJIRAO PATIL 4 RS.4,46,092/ - AND MOULDS OF RS.8,38,939/ - IN THE YEAR UNDER REFERENCE. FURTHER, THE ASSESSEE HAD ALSO PURCHASED LORRY OF RS.4 LAKHS AND THE ASSESSEE WAS ASKED TO FURNISH THE BILLS. THE LEARNED AUTHOR IZED REPRESENTATIVE FOR THE ASSESSEE EXPRESSED HIS INABILITY TO FURNISH THE PURCHASE BILLS FOR VARIOUS ASSE T S SINCE THE SAME WERE NOT TRACEABLE. THE ASSESSEE ALSO DID NOT EXPLAIN THE MODE OF PAYMENT FOR PURCHASING THE SAID ASSETS. ONLY NAMES OF SUPPLIERS WERE FURNISHED WITHOUT GIVING THEIR COMPLETE ADDRESS. ACCORDINGLY, THE CIT(A) REJECTED THE CLAIM OF DEPRECIATION OF RS.4,25,181/ - AND THE ORDER OF ASSESSING OFFICER IN TAKING THE FIGURE OF RS.7,17,390/ - AS THE STARTING FIGURE FOR COMPUTATION OF INCOME , W AS UPHELD. 7. WITH REGARD TO SECOND ISSUE OF PURCHASES MADE BY THE ASSESSEE, WHERE THE ASSESSEE CLAIMS THAT THOUGH THE DELIVERY WAS MADE AND HENCE, THERE WAS NO EVIDENCE OF DELIVERY OF GOODS BUT THE PAYMENT WAS MADE THROUGH BANKING CHANNELS, WAS HELD TO B E NOT SUFFICIENT TO ESTABLISH THE CASE OF PURCHASES MADE BY THE ASSESSEE. CONSEQUENTLY, ADDITION OF RS.5,05,908/ - WAS UPHELD BY THE CIT(A). 8. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) ON BOTH THE ISSUES. 9. WE HAVE HEARD THE RIVAL CONTENTIO NS AND PERUSED THE RECORD. WITH REGARD TO THE ISSUE OF ALLOWANCE OF DEPRECIATION ON ASSETS PURCHASED, THE ASSESSEE MADE AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE, UNDER WHICH IT HAS SUMMARIZED THE DETAILS OF FIXED ASSETS PURCHASED DURING THE YEA R ITA NO. 2065 /P U N/20 1 6 YOGESH SHIVAJIRAO PATIL 5 AND HAS SUBMITTED THE INVOICES TRACED BY THE ASSESSEE IN RESPECT OF PART OF THE ASSETS. IN RESPECT OF ASSETS UNDER THE HEAD ELECTRIC FITTINGS , THE ASSESSEE HAS NOT PLACED ANY INVOICES. IN RESPECT OF LORRY PURCHASED, COPY OF AGREEMENT IS FILED AND IN RESPECT OF MACHINERY PURCHASED, THE ASSESSEE HAS FILED SOME OF THE INVOICES BUT COMPLETE DETAILS HAVE NOT BEEN FILED . I N RESPECT OF MOULDS PURCHASED , T HE ASSESSEE HAS ATTACHED PHOTOCOPIES OF ALL THE INVOICES. THE ASSESSEE POINTS OUT THAT THE SAID ADDITIO NAL EVIDENCE MAY BE ADMITTED AND THE ASSESSING OFFICER MAY VERIFY THE SAME AND ALLOW DEPRECIATION AS PER L A W. WE FIND MERIT IN THE PLEA OF ASSESSEE. THE ASSESSEE HAD PURCHASED THE FIXED ASSETS DURING THE INSTANT ASSESSMENT YEAR, AGAINST WHICH IT COULD NO T PRODUCE THE BILLS BEFORE THE CIT(A) SINCE THE SAME WERE NOT TRACEABLE. HOWEVER, NOW BEFORE US, THE ASSESSEE BY WAY OF ADDITIONAL EVIDENCE, HAS FURNISHED SOME DETAILS WHICH ARE TABULATED AT PAGE 58 OF THE PAPER BOOK. THE ASSESSEE HAS MADE A REQUEST FOR THE ADMISSION OF SAID ADDITIONAL EVIDENCE WITH A PLEA THAT THE SAME MAY BE VERIFIED BY THE ASSESSING OFFICER AND DEPRECIATION BE ALLOWED ON SUCH ASSETS AS PER LAW. WE FIND MERIT IN THE PLEA OF ASSESSEE. THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE IN RE SPECT OF VARIOUS FIXED ASSETS IS ADMITTED. THE ASSESSING OFFICER IS DIRECTED TO VERIFY THE EVIDENCES AVAILABLE WITH THE ASSESSEE AND ALLOW DEPRECIATION ON SUCH ASSETS, FOR WHICH THE ASSESSEE HAS FILED THE COPY OF INVOICES. IN RESPECT OF LORRY PURCHASED B Y THE ASSESSEE, THE ASSESSEE HAS FILED THE COPY OF AGREEMENT WHICH IS PLACED AT PAGE 71 OF THE PAPER BOOK. HOWEVER, THE SAID DOCUMENT IS IN MARATHI AND IS NOT INVOICE FOR THE PURCHASE OF SAID VEHICLE. THE ASSESSEE IS DIRECTED TO FURNISH COMPLETE DETAILS IN RESPECT OF PURCHASE OF LORRY BEFORE THE ASSESSING OFFICER. ITA NO. 2065 /P U N/20 1 6 YOGESH SHIVAJIRAO PATIL 6 THE ASSESSING OFFICER SHALL LOOK INTO THE ADDITIONAL EVIDENCE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW , AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING . 10. NOW, COMING TO THE ISSUE RAISE D VIDE GROUND OF APPEAL NO.3, WHEREIN THE ADDITION HAS BEEN MADE ON ACCOUNT OF HAWALA PURCHASES. THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT IN RESPECT OF CERTAIN PURCHASES MADE BY THE ASSESSEE FROM HAWALA PARTIES. THE AS SESSEE WAS ASKED TO ESTABLISH THE DELIVERY OF GOODS AND FURNISH THE EVIDENCES IN THIS REGARD IN ORDER TO PROVE ITS CASE OF PURCHASES MADE. HOWEVER, THE ASSESSEE CLAIMED THAT THOUGH THE DELIVERY OF CEMENT WAS MADE , BUT IT HAD NO EVIDENCE BY WAY OF LORRY RE CEIPTS OR DELIVERY CHALLANS. THE CASE OF ASSESSEE BEFORE US IS THAT INFORMATION AVAILABLE WITH THE ASSESSING OFFICER WAS NOT CONFRONTED TO THE ASSESSEE EXCEPT THE LIST OF HAWALA DEALERS. HE ADMITS THAT THE STATEMENT WAS SHOWN. THE ASSESSEE FURTHER POINT S OUT THAT THE VAT WHICH WAS NOT PAID BY THE SAID HAWALA DEALER HAS BEEN PAID BY THE ASSESSEE. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE DECISION OF PUNE BENCH OF TRIBUNAL IN BUNCH OF APPEALS WITH LEAD ORDER IN M/S. CHH ABI ELECTRICALS PVT. LTD. VS. DCIT IN ITA NO.795/PUN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 28.04.2017 AND POINTED OUT THAT THE ENTIRE PURCHASES COULD NOT BE ADDED IN THE HANDS OF ASSESSEE. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCU MSTANCES AND KEEPING IN MIND THE RATIO LAID DOWN BY THE TRIBUNAL IN M/S. CHHABI ELECTRICALS PVT. LTD. VS. DCIT (SUPRA), WE RESTRICT THE ADDITION IN THE HANDS OF ASSESSEE AND DIRECT THE ASSESSING OFFICER TO APPLY GP RATE OF 10% ON THE GOODS PURCHASED, OVER AND ABOVE THE GP RATE DECLARED ITA NO. 2065 /P U N/20 1 6 YOGESH SHIVAJIRAO PATIL 7 BY THE ASSESSEE. ACCORDINGLY, THE GROUND OF APPEAL NO.3 RAISED BY THE ASSESSEE IS PARTLY ALLOWED. 1 1 . IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 7 TH DAY OF JUNE , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI ) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 7 TH JUNE , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLA NT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I, AURANGABAD ; 4. / THE PR. CIT - I, AURANGABAD ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE