M/s. Nelco Electricals Pvt. Ltd., Hapur V. ITO, Hapur

ITA 2329/DEL/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 7033 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 08-09-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 20-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIT LAL
• Assessee Lawyers: RK GARG
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC-2 NEW DELHI BEFORE SHRI H. S. SIDHU, JUDICIAL MEMBER I.T.A. NO. 2329/DEL/2015 ASSESSMENT YEAR: 2010-11 M/S NELCO ELECTRICALS PVT. LTD., VS. ITO, WARD -1 367, SRI NAGAR, HAPUR, HAPUR C/O RK GARG, T-314, GANGA PLAZA, BEGUM BRIDGE ROAD, MEERUT (PAN: AABCN8127F) (ASSESSEE) (RESPONDENT) ASSESSEE BY : SH. RK GARG, ADV. REVENUE BY : SH. AMRIT LAL, SR. DR DATE OF HEARING ON : 08/09/2016 ORDER PRONOUNCED ON : 04/10/20 16 PER H.S. SIDHU, JM ORDER THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER DATED 19.2.2015 PASSED BY THE LD. CIT(A), MUZAFFARNAGAR R ELATING TO ASSESSMENT YEAR 2010-11 ON THE FOLLOWING GROUNDS:- 1. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT (APPEALS) HAS ERRED TO HOLD THE BUR DEN LIES ON THE APPELLANT HAS NOT BEEN DISCHARGED. THE FINDING IS ARBITRARY, UNJUST UNCALLED-FOR, ILLEGAL AND AGAINST THE MATERIAL PLACED ON RECORD. 2. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CASE , THE LEARNED CIT (APPEALS) HAS ERRED TO HOLD THAT PURCHA SES SHOWN FROM THE OUTSTANDING CREDITORS AT RS. 2 32,95,000/- WAS BOGUS PURCHASES WITHOUT GOING THROUGH DOCUMENTS FILED AND COMING TO THE CONCLUSIO N WITHOUT GIVING THE SHOW CAUSE NOTICE. THE FINDING O F BOGUS PURCHASES IS ARBITRARY, UNJUST, UNCALLED-FOR AND AGAINST THE GENUINE PURCHASES HELD BY THE LEARNED A .O. THE ADDITION ON ACCOUNT OF OUTSTANDING LIABILITY AG AINST THE BOGUS PURCHASES HELD, IS THEREFORE, ARBITRARY, UNJUST, UNCALLED-FOR AND ILLEGAL. 3. THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CASE , THE LEARNED CIT (APPEALS) HAS ERRED TO HOLD THAT A:O. H AS RIGHTLY TREATED THE LIABILITY AS BOGUS, BECAUSE THE ALLEGED CREDITOR DID NOT EXIST. THE FINDING IS ARBITRARY, U NJUST, UNCALLED-FOR AND IN ANY CASE ILLEGAL AND BASED ON SURMISES AND CONJECTURES. 4. THAT UNDER THE ACTS & CIRCUMSTANCES OF THE CASE, THE LEARNED CIT (APPEALS) HAS ERRED TO TREAT THE SUM OF RS. 32,95,000/- BOGUS LIABILITY, VIS A VIS BOGUS PURCHA SES. THE ADDITION AND FINDING IS ARBITRARY, UNJUST, UNCA LLED- FOR, ILLEGAL AND BASED AGAINST THE MATERIAL PLACED ON RECORD. 2. FACTS NARRATED BY THE REVENUE AUTHORITIES ARE NO T DISPUTED BY BOTH THE PARTIES, HENCE, THE SAME ARE NOT REPEATE D HERE FOR THE SAKE OF CONVENIENCE. 3. AT THE TIME OF HEARING, LD. COUNSEL OF THE AS SESSEE HAS STATED THAT REVENUE AUTHORITIES HAS NOT GIVEN SUFFICIENT OPPORTUNITY TO THE ASSESSEE FOR SUBSTANTIATING ITS CLAIM BEFORE THEM. HE REQUESTED THAT THE ASSESSEE IS HAVING ALL THE NECESSARY EVIDENCE W HICH CAN BE PRODUCED BEFORE THE AO, IF THIS BENCH GRANTED AN OP PORTUNITY TO THE ASSESSEE. HE HAS FILED THE PAPER BOOK CONTAINING PAGES 1 TO 51 IN WHICH HE HAS ATTACHED THE COPY OF WRITTEN SUBMISSIO N DATED 3 20.6.2014, AS FILED BEFORE THE LD. CIT(A) GHAZIABAD ; CONFIRMED COPY OF ACCOUNT OF M/S LAL TRADING CO., ALONGWITH COPY OF A LL PURCHASE BILLS AND COPY OF ACCOUNT FOR AY 2011-12 TILL CLOSE OF AC COUNT, AS FILED BEFORE THE AO; CONFIRMED COPY OF ACCOUNT OF M/S LOV E MARKETING GHAZIABAD, ALONGWITH COMPLETE BILL AND COPY OF ACCO UNT OF AY 2011- 12, TILL CLOSE OF ACCOUNT, COPY OF BANK ACCOUNT AND COPY OF PAN CARD, AS FILED BEFORE THE AO; CONFIRMED COPY OF ACCOUNT O F M/S SHREE RADHEY TRADING CO., GHAZIABAD FOR AY 2010-11, COPY OF COM PLETE BILL AND COPY OF ACCOUNT OF AY 2011-12, 2012-13 AND 2013-14 TILL CLOSE OF ACCOUNT AND COPY OF PAN CARD, AS FILED BEFORE AO; C ONFIRMED COPY OF ACCOUNT OF M/S GANESH TRADERS GHAZIABAD FOR AY 2010 -11, ALONGWITH COPY OF COMPLETE BILLS AND COPY OF ACCOUNT OF AY 2 011-12, 2012-13 AND 2013-14 TILL CLOSE OF THE ACCOUNT, AS FILED BEF ORE THE AO; SUMMARY OF YEAR WISE COPY OF CREDITORS, AS FILED BEFORE THE CIT(A); COPY OF REPLY DATED 7.11.2012, AS FILED BEFORE AO; COPY OF REPLY DATED 14.11.2012 AS FILED BEFORE AO; COPY OF REPLY DATED 30.1.2013; AS FILED BEFORE AO; COPY OF REPLY DATED 4.2.2013, AS FILED BEFORE AO; COPY O F REPLY DATED 6.3.2013, ALONGWITH SUMMARY OF CREDITORS WITH PAN & REMAKR, AS FILED BEFORE AO; COPY OF REMAND REPORT FURNISHED BY THE A O; COPY OF REPLY OF REMAND REPORT DATED 9.8.2014 AS FURNISHED BEFORE TH E LD. CIT(A); COPY OF SCRUTINY ASSESSMENT FOR AY 2012-13 AS COMPLETED BY ITO AND COPY OF SCRUTINY ASSESSMENT FOR AY 2013-14 AS COMPLETED BY ITO. HE REQUESTED THAT ISSUE IN DISPUTE MAY BE SET ASIDE TO THE AO. 4. ON THE CONTRARY, LD. DR RELIED UPON THE ORDERS O F THE AUTHORITIES BELOW AND OPPOSED THE REQUEST OF THE ASSESSEES COU NSEL. 5. I HAVE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE ORDERS PASSED BY THE AUTHORITIES BELOW AS WELL AS T HE PAPER BOOKS DETAILING THE EVIDENCES/DOCUMENTS, I AM OF THE VIEW THAT THE EVIDENCES PRODUCED BY THE ASSESSEE REQUIRES THOROUGH EXAMINAT ION AT THE LEVEL OF THE AO. THEREFORE, IN THE INTEREST OF JUSTICE, I SET ASIDE THE ISSUES IN 4 DISPUTE TO THE FILE OF THE AO FOR FRESH CONSIDERATI ON, AS PER LAW, AFTER CONSIDERING ALL THE DOCUMENTARY EVIDENCES. HOWEVER , THE ASSESSEE IS DIRECTED TO FULLY COOPERATE WITH THE AO DURING THE PROCEEDINGS BEFORE HIM AND NOT TO TAKE ANY UNNECESSARY ADJOURNMENT IN THE CASE AND ALSO PRODUCE ALL THE NECESSARY EVIDENCES BEFORE THE AO TO SUBSTANTIATE HIS CLAIM. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 04/10/2016 . SD/- [H.S. SIDHU] JUDICIAL MEMBER DATE 04/10/2016 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES