M/s M.B. Jewellers & Sons, Kolkata V. ACIT, Circle-44, Kolkata, Kolkata

ITA 2368/KOL/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6330 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 19-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S M SURANA
• Keywords: Bogus purchase
• Section: 147

Judgement Text

ITA NO.2368/KOL/2016 M/S M.B.JEWELLERS & SONS A.Y.2 008-09 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM & SMT. MADHUMITA ROY, JM ] ITA NO.2368/KOL/2016 ASSESSMENT YEAR : 2008-09 M/S M.B.JEWELLERS & SONS -VERSUS- A.C.I.T., CIRCLE-44, KOLKATA KOLKATA (PAN: AAEFM 7973 J) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI S.M.SURANA, ADVOCATE FOR THE RESPONDENT: SHRI SALLONG YADEN, ADDL. CIT DATE OF HEARING : 28.05.2018. DATE OF PRONOUNCEMENT : 01.06.2018. ORDER PER MADHUMITA ROY, JM THE INSTANT APPEAL HAS BEEN PREFERRED BEFORE US BY THE ASSESSEE AGAINST THE ORDER DATED 12.08.2016 PASSED BY THE COMMISSIONER O F INCOME TAX(APPEALS)-13 KOLKATA UNDER SECTION 143(3)/147 OF THE INCOME TAX ACT, 1961 ARISING OUT OF THE ORDER DATED 03.09.2015 PASSED BY THE ASSISTANT COMMISSION ER OF INCOME TAX, CIRCLE-44, KOLKATA FOR THE ASSESSMENT YEAR 2008-09 WITH THE FO LLOWING GROUNDS : 1. FOR THAT THE LD CIT(A) ERRED IN CONFIRMING THE PROCEEDINGS INITIATED UNDER SEC. 147 WHICH WAS BAD IN LAW. 2. FOR THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 7,49,735/- AS BOG US PURCHASES AND TREATING THE PURCHASES OF GOODS AS INCOME OF THE APPELLANT WHER EAS THE APPELLANT PURCHASED TRADING GOODS FOR CONSIDERATION, SUCH GOODS WERE SU BSEQUENTLY SOLD FOR PROFITS AND REVENUE RECEIVED UPON SUCH SALES WAS DULY CONSI DERED AS INCOME OF THE APPELLANT AND THEREFORE THE LD CIT(A) SHOULD HAVE D ELETED THE ADDITION OF RS. 7,49,735/-. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD CIT(A) ERRED IN NOT APPRECIATING THE FACT OF THE CASE AND THEREBY C ONFIRMING THE ADDITION MADE BY THE ITO. 4. FOR THAT THE INTEREST CHARGED U/S234B(1) IS NOT IN ACCORDANCE WITH LAW. 5. FOR THAT ON THE FACTS AND CIRCUMSTANCES O THE C ASE THE ORDER OF THE CIT(A) BE MODIFIED AND THE ASSESSEE BE GIVEN THE RELIEF PRAYE D FOR. ITA NO.2368/KOL/2016 M/S M.B.JEWELLERS & SONS A.Y.2 008-09 2 6. FOR THAT THE ASSESSEE CRAVES LEAVE TO ADD, ALTER OR AMEND AND/ AROUND BEFORE OR AT THE TIME OF HEARING. 2. THE MAIN ISSUE INVOLVED IN THIS MATTER IS THIS AS TO WHETHER THE LEARNED CITA WAS JUSTIFIED IN CONFIRMING THE ADDITION OF RS. 7, 49,735 /-AS BOGUS PURCHASES AND TREATED THE SAME AS INCOME IN THE HANDS OF THE ASS ESSEE.. 3. THE FACTS OF THE CASE IS THAT THE ASSESSEE IS A PARTNERSHIP FIRM CARRYING JEWELLERY BUSINESS. IT FILED THE RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2008-09 ON 30.09.2008 DECLARING TOTAL INCOME OF RS. 83,60,515/-. 3.1. LATER ON, ON THE BASIS OF THE INFORMATION RECE IVED FROM THE OFFICE OF THE DGI T. (INV) MUMBAI THAT THE ASSESSE HAD MADE BOGUS PURCHA SES OF JEWELLERY OF RS.7,49,735 FROM ONE M/S AVI EXPORTS AND THE CASE WAS REOPENED. THEREAFTER IN RESPONSE TO THE NOTICE UNDER SECTION 143 (2) AND 142 (1) THE ASSESS EE PRODUCED THE BOOKS OF ACCOUNTS, VOUCHERS, BANK STATEMENTS ETC. AND ALSO FILED VARIO US DETAILS AS CALLED FOR. THE ASSESSMENT HAS BEEN COMPLETED ON THE TOTAL INCOME O F RS. 90,56,250/-BY DISALLOWING THE CLAIM OF THE ASSESSEE TREATING PURCHASES OF GO ODS FOR THE SUM OF RS. 7,49,735 AS INCOME OF THE ASSESSE. 3.2. WHILE PASSING THE ORDER DISALLOWING THE CLAIM OF THE ASSESSEE THE LEARNED AO MADE THE FOLLOWING OBSERVATION: -- FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDIN GS, VIDE NOTE SHEET ENTRY DATED 19-06-2015, THE A/R OF ASSESSEE WAS REQUESTED TO PRODUCE THE PRINCIPAL OFFICER OF AVR EXPORTS ALONG WITH THE BOOKS OF ACCO UNTS TO VERIFY THE GENUINENESS OF TRANSACTION MADE WITH THE ASSESSEE A ND WAS STATED TO MAKE THE SUBMISSION LATEST BY 23-06-2015. BUT NEITHER THE AS SESSEE COULD PRODUCE THE PRINCIPAL OFFICER OF A VI EXPORTS NOR HE COULD PROD UCE ANY SATISFACTORY EVIDENCE IN SUPPORT OF HIS CLAIM. TILL THE DATE OF PASSING T HIS ORDER, THE ASSESSEE COULD NOT PRODUCE THE PRINCIPAL OFFICER OF M/S AVI EXPORTS A LONG WITH BOOKS OF ACCOUNTS IN-SPITE OF REPEATED OPPORTUNITIES GIVEN TO THE ASS ESSEE. SINCE THE ASSESSEE EXCESSIVELY DEBITED THE PROFIT & LOSS ACCOUNT BY TH E AMOUNT OF BOGUS PURCHASE AMOUNTING TO RS.7,49,735/- FROM M/S AVI EXPORTS AN D NOT BEEN ABLE TO PROVE SATISFACTORILY THAT THE PURCHASE MADE ARE NOT BOGUS PURCHASE, THE ENTIRE AMOUNT OF RS.7,49,735/- IS ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO.2368/KOL/2016 M/S M.B.JEWELLERS & SONS A.Y.2 008-09 3 4. THE ASSESSE PREFERRED AN APPEAL AGAINST THE SAID ORDER AND THE LEARNED CITA PARTLY ALLOWED THE APPEAL WITH THE FOLLOWING OBSERV ATION: THEREFORE, THE REASON GIVEN BY THE APPELLANT IS ME RELY A PRETEXT WHICH CANNOL BE ACCEPTED OTHERWISE THE APPELLANT FAILED TO ACCEPT T HE BURDEN OF PROVING THE SAID DOUBTED TRANSACTIONS. KEEPING IN VIEW ALL THE AFORE SAID FACTS, OUT OF TOTAL ADDITION OF RS.7,49,735/-THE GROSS PROFIT SHOWN BY THE APPEL LANT IS REDUCED AND THE REMAINING ADDITION IS CONFIRMED. THE AO IS DIRECTED TO REDUCE THE GROSS PROFIT ELEMENT FROM AFORESAID FIGURE AND ALSO ADD 1% AS E NTRY CHARGES ON ABOVE TRANSACTION AND RE-COMPUTE INCOME ACCORDINGLY. THE CASE LAW CITED BY THE APPELLANT ARE DIFFERENT F ROM THE PRESENT CASE OF THE APPELLANT ON MANY REASONS WHICH ARE NOT PRESENT IN ANY OTHER CASE IS THAT (I) THAT THE APPELLANT HAS FAILED TO PRODUCE THE SUPPLIER, ( II) THAT THE DEPARTMENT HAS PROVED THE SAME SUPPLIER AS. ENTRY PROVIDER UNDER T HE GUISE OF SALE, (III) THAT ITS CORRESPONDING PURCHASES WERE NOT FOUND BY THE PARTY .ONLY SINGLE TRANSACTION WAS MADE AND PAYMENT WAS MADE IMMEDIATELY, (IV) HOW THE APPELLANT CONTACTED SUCH PARTY WITHOUT ANY BROKER. THERE' WAS NO BROKER IN THIS CASE, THE APPELLANT DID NOT CLAIM THAT PURCHASES WERE ACTUALLY, MADE FROM ANY M ARKET WITHOUT BILL AND ONLY BILLS WERE OBTAINED. THEREFORE, THE CASE LAW CITED BY THE APPELLANT ARE NOT APPLICABLE IN HIS CASE. 5. THE LEARNED COUNSEL APPEARING FOR THE ASSESSEE SUBMITS BEFORE US THAT THE ISSUE IS COVERED IN ASSESSEES OWN CASE WHERE THE SAME PARTIES ARE INVOLVED IN THE SAME SET OF FACTS ON THE ISSUE OF BOGUS PURCHASE HA S BEEN DECIDED ON 28.03.2018 BY A COORDINATE BENCH OF THIS LEARNED TRIBUNAL IN ITA NO .1/KOL/2017 FOR THE ASSESSMENT YEAR 2007-08 IN FAVOR OF THE ASSESSEE. THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT RAISED ANY OBJECTION AGAINST THE SUBMISSION MAD E BY THE LEARNED AR. 6. WE HAVE HEARD THE LEARNED COUNSEL APPEARING FOR THE PARTIES AND PERUSED THE RELEVANT DOCUMENTS AVAILABLE ON RECORDS. WE HAVE AL SO PERUSED THE ORDER PASSED BY THE LEARNED TRIBUNAL AS RELIED UPON BY THE LEARNED AR. WE FIND THAT THE ISSUE IS SAME AND SIMILAR TO THE INSTANT CASE IN HAND, THE RELEVA NT PORTION WHERE OF IS REPRODUCED HEREIN BELOW: 7.4. WE ALSO FIND THAT SIMILAR ISSUE HAD BEEN ADDR ESSED BY THIS TRIBUNAL IN RESPECT OF PURCHASES MADE FROM M/SVITRAG JEWELS IN CONNECTION WITH THE STATEMENT OF SHRI RAJENDRA JAIN IN THE CASE OF MANO J BEGAMI VS ACIT IN ITA. NO. 932/KO1/2017 FOR ASST YEAR 2008-09; ITA NOS. 933 TO 935/KOL/2017 FOR ASST YEARS 2010-11 TO 2012-13 AND ITA NO. 936!KO1L20N FO R ASST YEAR 2014-15 VIDE ITA NO.2368/KOL/2016 M/S M.B.JEWELLERS & SONS A.Y.2 008-09 4 CONSOLIDATED ORDER DATED 15.12.2017 , WHEREIN THIS TRIBUNAL HAD ELABORATELY DISCUSSED THE MODUS OPERANDI OF ALL THE TRANSACTION S FROM VARIOUS ANGLES AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE FI NDINGS GIVEN THERE UNDER ARE NOT REITERATED HEREIN FOR THE SAKE OF BREVITY. 7.5. IN VIEW OF THE AFORESAID FINDINGS IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THERE IS NO CASE MADE OUT BY THE REVEN UE FOR MAKING AN ADDITION TOWARDS PURCHASES OF RS 15,57,470/- AND WE HEREBY D IRECT THE ID AO TO DELETE THE SAME. ACCORDINGLY, THE GROUNDS 2& 3 RAISED BY THE A SSESSEE ARE ALLOWED. WE, THEREFORE, FOLLOWING THE JUDGMENT PASSED BY TH E CO-ORDINATE BENCH OF THE LD.TRIBUNAL SET ASIDE THE ADDITION OF RS.7,49,735/- MADE BY THE LOWER AUTHORITY. THE APPEAL PREFERRED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALLO WED. O RDER PRONOUNCED IN THE COURT ON 01.06.2018. SD/- SD/- [J.SUDHAKAR REDDY ] [ MADHUMITA ROY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01.06.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.M/S M.B.JEWELLERS & SONS, P-10, DEVENDRA DUTTA LA NE, KOLKATA-700007. 2 A.C.I.T., CIRCLE-44, KOLKATA. 3. C.I.T.(A)- 13, KOLKATA 4. C.I.T-15, KOLKAT A 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES ITA NO.2368/KOL/2016 M/S M.B.JEWELLERS & SONS A.Y.2 008-09 5