Income-tax Officer, V. M/s. Metal United Alloys Fusion Products Ltd., Nashik

ITA 2287/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 6302 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 09-01-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 29-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHEI
• Keywords: Bogus purchase
• Section: 143(3); 143(1); 148

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI P.S. CHAUDHURY, J.M. . / ITA NOS.2285 & 2287/PUN/2016 / ASSESSMENT YEARS : 2009-10 & 2011-12 THE INCOME TAX OFFICER, WARD 1(4), NASHIK. . / APPELLANT V/S M/S. METAL UNITED ALLOYS FUSION PRODUCTS LTD., GAT NO.601/602/ JAULKE ROAD, AT POST JAULKE, TAL. DINDORI, NASHIK. PAN : AAFCM0083K. . / RESPONDENT ASSESSEE BY : SHRI PRAMOD SHINGTE. REVENUE BY : SHRI SANJEEV GHEI. / ORDER PER ANIL CHATURVEDI, AM : 1. THESE TWO APPEALS FILED BY THE REVENUE ARE EMANATING OUT OF SEPARATE ORDERS OF COMMISSIONER OF INCOME TAX (A) 1, NA SHIK BOTH DATED 04.07.2016 FOR THE ASSESSMENT YEARS 2009-1 0 AND 2011-12. 2. BEFORE US, AT THE OUTSET, BOTH THE PARTIES SUBMITTED THAT THOUGH THE APPEALS FILED BY THE REVENUE ARE FOR DIFFEREN T ASSESSMENT YEARS BUT THE FACTS AND ISSUES INVOLVED IN BO TH THE / DATE OF HEARING : 09.01.2019 / DATE OF PRONOUNCEMENT: 25.01.2019 2 ITA NOS.2285 & 2287/PUN/2016 APPEALS ARE IDENTICAL EXCEPT THE ASSESSMENT YEARS AND THE AMOUNTS INVOLVED AND THEREFORE THE SUBMISSIONS MADE BY T HEM WHILE ARGUING ONE APPEAL WOULD BE EQUALLY APPLICABLE TO THE OTHER APPEAL ALSO AND THUS, BOTH THE APPEALS CAN BE HEARD TOG ETHER. IN VIEW OF THE AFORESAID SUBMISSIONS OF BOTH THE PARTIES, WE, FOR THE SAKE OF CONVENIENCE, PROCEED TO DISPOSE OF BOTH THE APPE ALS BY A CONSOLIDATED ORDER BUT HOWEVER, PROCEED WITH NARRATING T HE FACTS IN ITA NO.2285/PUN/2016 FOR ASSESSMENT YEARS 2009-10 & 2011-1 2. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RE CORD ARE AS UNDER :- ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE BUS INESS OF TRADING OF IRON AND STEEL AND LABOUR CHARGES. ASSESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 2009-10 ON 23.09.2009 DECLARING TOTAL INCOME AT RS.NIL. THE RETURN OF IN COME WAS INITIALLY PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY , THE CASE WAS RE-OPENED BY ISSUING NOTICE U/S 148 OF THE ACT WHICH WAS ISSUED ON 27.09.2013 AND SERVED ON THE ASSESSEE. THERE AFTER, THE CASE WAS TAKEN UP FOR SCRUTINY AND ASSESSMENT WAS FRA MED U/S 143(3) R.W.S. 147 OF THE ACT VIDE ORDER DT.30.03.2015 AND THE TOTAL INCOME WAS DETERMINED AT RS.93,67,890/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A), WHO VID E ORDER DT.04.07.2016 (IN APPEAL NO.NSK/CIT(A)-1/151/2015-16) GRAN TED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FO LLOWING GROUNDS : 3 ITA NOS.2285 & 2287/PUN/2016 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LEARNED CIT(A)-1, NASHIK WAS JUSTIFIED IN DELETING THE ADDITION OF RS . 93,67,890/- ON ACCOUNT OF ALLEGED BOGUS PURCHASES FROM HAWALA DEALERS/PARTIES? 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A)-1, NASHIK WAS JUSTIFIED IN DELET ING THE ADDITION ON THE BASIS OF THE SECTION 292BB WHICH IS MAINLY FOR THE REFERENCE TO THE NOTICE ISSUE? 3 . WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LEARNED CIT(A)-1, NASHIK WAS JUSTIFIED IN DELET ING THE PURCHASES TREATED AS BOGUS ON THE BASIS OF THE OBJE CTION RAISED BY THE ASSESSEE AND IGNORING THAT THE CASE F ALLS UNDER SECTION 292B WHICH PROVIDES THAT AN ASSESSMEN T WOULD NOT BE INVALIDATED SIMPLY BY AN OMISSION OR M ISTAKE ? 4. WHETHER THE LEARNED CIT(A)-1, NASHIK ERRED IN AS SUMING THE OBJECTIONS RAISED BY THE ASSESSEE AS U/S 292BB, WHICH ONLY REFERS TO THE ISSUE OF NOTICE AND THE OBJECTIO NS RAISED WERE REGARDING THE VALIDITY OF PROCEEDINGS INITIATED BY THE AO U/S 147 AND REASONS RECORDED BY THE AO ? 5. THE APPELLANT PRAYS THAT THE ORDER OF THE LEARNE D CIT(A)-1, NASHIK MAY PLEASE BE CANCELLED AND THE OR DER OF ASSESSING OFFICER MAY PLEASE BE RESTORED. 4. SIMILAR GROUNDS ARE RAISED BY THE REVENUE IN ITA NO.2287/PUN/2016 FOR A.Y. 2011-12. 5. ALL THE GROUNDS BEING INTER-CONNECTED ARE CONSIDERED TOGETHER. 6. AO HAS NOTED THAT INFORMATION WAS RECEIVED FROM INVESTIGATION SECTION WHEREIN SALES TAX DEPARTMENT HAS INFORMED THAT ASSESSEE HAS MADE PURCHASES AGGREGATING TO RS. 69,53,972/- FROM PARTY NAMELY JAIN CORPORATION, WHO WAS A HAWALA PA RTY. BASED ON THE AFORESAID INFORMATION, THE CASE OF THE ASSES SEE WAS RE-OPENED BY ISSUING NOTICE U/S 148 OF THE ACT. DURING T HE COURSE OF RE-ASSESSMENT PROCEEDINGS, ASSESSEE WAS ASKED TO P ROVE THE PURCHASES AND PRODUCE THE NECESSARY EVIDENCE LIKE PURC HASE BILLS, DELIVERY CHALLANS, PAYMENT DETAILS, STOCK REGISTER ETC., ASSE SSEE 4 ITA NOS.2285 & 2287/PUN/2016 HAD FILED CERTAIN DETAILS AND ALSO SUBMITTED THAT THE PURCH ASES ARE GENUINE. THE SUBMISSION OF THE ASSESSEE WAS NOT FOUND A CCEPTABLE TO THE AO AS HE WAS OF THE VIEW THAT ASSESSEE HAS FAILED TO DISCHARGE THE ONUS CAST UPON HIM AND HAS NOT PRODUCE D THE PARTIES NOR HAD PROVIDED ANY DETAILS WHICH COULD HELP HIM TO VERIFY THE PURCHASES. HE ACCORDINGLY CONSIDERED THE PURCHASE S OF RS.69,53,972/- AS TO BE BOGUS AND ADDED TO THE INCOME. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A). BEFORE LD.CIT(A), ASSESSEE OBJECTED TO THE RE-OPENING OF T HE ASSESSMENT WHEREIN INTER-ALIA IT WAS SUBMITTED THAT RE-AS SESSMENT ORDER WAS FRAMED WITHOUT DISPOSING THE OBJECTIONS FILED BY THE ASSESSEE AND RELYING ON THE DECISIONS CITED BEFORE LD.CIT (A), IT WAS PRAYED THAT THE ASSESSMENT BE HELD TO BE BAD-IN-LAW. 7. LD.CIT(A) AFTER CONSIDERING THE DECISIONS CITED IN THE ORD ER AND ALSO THE DECISIONS OF BOMBAY HIGH COURT IN THE CASE O F M/S. BAYER MATERIAL SCIENCES PVT. LTD., IN WP.NO.2502 OF 2015 DT.27.01.2016 AND THE DECISION OF HONBLE GUJARAT HIGH COU RT IN THE CASE OF GENERAL MOTORS INDIA REPORTED IN 354 ITR 244 HELD THAT AO HAD NOT DISPOSED THE OBJECTIONS FILED BY THE ASSESS EE EITHER BEFORE THE COMPLETION OF THE ASSESSMENT NOR DURING THE ASSESSMENT. SHE THEREFORE, FOLLOWING THE AFORESAID DECISIONS OF HONBLE BOMBAY HIGH COURT AND GUJARAT HIGH COURT, HELD T HAT THE ASSESSMENT ORDER TO BE BAD-IN-LAW. AGGRIEVED BY THE OR DER OF LD.CIT(A), REVENUE IS NOW IN APPEAL BEFORE US. 5 ITA NOS.2285 & 2287/PUN/2016 8. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT ON IDE NTICAL FACTS IN ASSESSEES OWN CASE FOR A.Y. 2010-11, THE CO-OR DINATE BENCH OF THE TRIBUNAL (IN ITA NO.2286/PUN/2016 AND C.O.NO.39/PUN/2016 ORDER DT.21.04.2017) HAS UPHELD THE QUASHING OF THE RE-ASSESSMENT ORDER BY HOLDING IT TO BE BAD-IN- LAW. HE PLACED ON RECORD THE COPY OF THE AFORESAID DECISIO N AND POINTED TO THE RELEVANT FINDINGS. HE SUBMITTED THAT THE FA CTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF AS SESSEES OWN CASE IN A.Y. 2010-11 AND THEREFORE NO INTERFERENCE T O THE ORDER OF LD.CIT(A) IS CALLED FOR. LD.D.R. ON THE OTHER HAND, DID NOT CONTROVERT THE SUBMISSIONS MADE BY LD.A.R. BUT HOWEVER SUPPORTED THE ORDER OF AO. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT LD.CIT(A) AFTER CONSIDERING THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. B AYER MATERIAL SCIENCES PVT. LTD., (SUPRA) AND THE DECISION OF GUJA RAT HIGH COURT IN THE CASE OF GENERAL MOTORS INDIA (SUPRA) HE LD THAT THE AO DID NOT DISPOSE OF THE OBJECTIONS FILED BY THE ASS ESSEE AND THEREFORE HELD THE RE-ASSESSMENT ORDER TO BE BAD-IN-LAW . WE FIND THAT ON IDENTICAL FACTS IN ASSESSEES OWN CASE FOR A.Y. 2 010-11 IN ITA NO.2286/PUN/2016 & C.O.NO.39/PUN/2016 ORDER DT.21.04.2017 RE-ASSESSMENT ORDER WAS HELD TO BE BAD IN LAW BY OBSERVING AS UNDER : 5. ON PERUSAL OF THE ORDER OF CIT(A), IT TRANSPIR ES THAT THE ISSUE WHICH WAS ADJUDICATED BY THE CIT(A) WAS THE EXERCIS E OF JURISDICTION UNDER SECTION 147/148 OF THE ACT. THE ASSESSING OFF ICER AFTER RECORDING REASONS FOR REOPENING THE ASSESSMENT, HAD ISSUED NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE IN REPLY , FILED THE RETURN 6 ITA NOS.2285 & 2287/PUN/2016 OF INCOME AND ASKED FOR REASONS RECORDED FOR REOPEN ING THE ASSESSMENT. THE SAID REASONS WERE SUPPLIED TO THE A SSESSEE, WHO FILED OBJECTIONS AGAINST THE SAID REASONS. THE ASSE SSING OFFICER WAS REQUIRED TO DISPOSE OF OBJECTIONS BY PASSING A SEPA RATE AND SPEAKING ORDER, WHICH WAS NOT PASSED. THE CIT(A) RE LIED ON THE RATIO LAID DOWN BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF M/S. BAYER MATERIAL SCIENCES PVT. LTD. IN W.P. NO.2502 O F 2015, JUDGMENT DATED 27.01.2016 AND HELD THAT WHERE THE OBJECTIONS HAVE NOT BEEN DISPOSED OF BY THE ASSESSING OFFICER, THEN THE ASSE SSMENT ORDER PASSED IS BAD IN LAW AND WAS QUASHED. 10. THE AFORESAID DECISION OF THE TRIBUNAL HAS NOT BEEN SET ASIDE, STAYED OR OVER-RULED BY HIGHER JUDICIAL AUTHORITIES. BEFO RE US, REVENUE HAS ALSO NOT PLACED ANY MATERIAL ON RECORD TO P OINT OUT ANY DISTINGUISHING FEATURE IN THE FACTS OF THE PRESENT CASE AND THAT OF EARLIER YEAR NOR HAS PLACED ANY CONTRARY BINDING DECIS ION IN ITS SUPPORT. WE THEREFORE FOLLOWING THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE IN A.Y. 2010-11, FIN D NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A) AND THUS THE GROUNDS OF THE REVENUE ARE DISMISSED. 11. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.2285/PUN/2016 FOR A.Y. 2009-10 IS DISMISSED. 12. AS FAR AS THE GROUNDS RAISED IN APPEAL IN ITA NO.2287/PUN/2016 FOR A.Y. 2011-12 ARE CONCERNED, IN VIEW OF THE SUBMISSIONS OF BOTH THE PARTIES THAT THE FACTS OF THE CA SE IN THE YEAR BEING IDENTICAL TO THE FACTS AND ISSUE OF THE CASE IN ITA NO.2285/PUN/2016 FOR A.Y. 2009-10, WE THEREFORE FOR THE R EASONS STATED HEREIN WHILE DISPOSING OF THE APPEAL IN ITA NO.2285/PUN/2016 FOR A.Y. 2009-10, AND FOR SIMILAR REASON S, HOLD THAT THE RE-ASSESSMENT ORDER TO BE BAD-IN-LAW AN D THUS WE 7 ITA NOS.2285 & 2287/PUN/2016 DISMISS THE GROUNDS OF REVENUE IN ITA NO.2287/PUN/2016 FOR A.Y. 2011-12. THUS, THE GROUNDS OF THE REVENUE ARE DISMISSED. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.2287/PUN/2016 FOR A.Y. 2011-12 IS DISMISSED. 14. TO SUM UP, BOTH THE APPEALS OF REVENUE ARE DISMISS ED. ORDER PRONOUNCED ON 25 TH DAY OF JANUARY, 2019. SD/- SD/- (P.S. CHAUDHURY) ( ANIL CHATURVEDI ) ! / JUDICIAL MEMBER '! / ACCOUNTANT MEMBER PUNE; DATED : 25 TH JANUARY, 2019. YAMINI #$%&'('% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4. 5 6. CIT(A)-1, NASHIK. PR.CIT-1, NASHIK. '#$ %%&', &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY &', / ITAT, PUNE.