The DCIT, Circle-4, Ahmedabad V. Gujarat Ambuja Exports Limited, Ahmedabad

ITA 2392/AHD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76763 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 29-04-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 04-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Business income
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 2392/AHD/2013 (ASSESSMENT Y EAR: 2010-2011) THE DCIT, CIRCLE-4, AHMEDABAD V/S GUJARAT AMBUJA EXPORTS LIMITED AMBUJA HOUSE, OPP. MEMNAGAR DIRE STATION, NAVRANGPURA, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AAACG 3908A APPELLANT BY : SHRI SUBHASH BAINS, CIT. D .R. RESPONDENT BY : SHRI S.N. SOPARKAR, A.R. AL. WITH PARIN SHAH, A.R. ( )/ ORDER DATE OF HEARING : 29-04-2014 DATE OF PRONOUNCEMENT : 30 -05-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER OF CIT(A)-VIII, AHMEDABAD DATED 15.07.2013 FOR A.Y. 2010-2011. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS A COMPANY STATED TO BE ENGAGED IN THE B USINESS OF AGRO PROCESSING AND AGRO BASED PRODUCTS. ASSESSEE ELECTR ONICALLY FILED HIS RETURN OF INCOME FOR A.Y. 2010-2011 ON 12.10.2010 D ECLARING TOTAL ITA NO 2 392/AHD/2013 . A.Y. 2010- 2011 2 INCOME OF RS. 64,56,11,410/- WHICH WAS LATER REVISE D ON 30.09.2011 BY REVISING THE TOTAL INCOME TO RS. 64,10,35,960/-. T HE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAM ED U/S. 143(3) VIDE ORDER DATED 18.03.2013 AND THE TOTAL INCOME WAS DET ERMINED AT RS. 73,60,50,933/-. AGGRIEVED BY THE ORDER OF A.O, ASS ESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) VIDE ORDER DATED 15.07 .2013 GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY TH E ORDER OF CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED T HE FOLLOWING EFFECTIVE GROUND:- THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE ADDITION OF RS. 9,31,09,522/- MADE ON ACCOUNT OF PURCHASES MADE FROM M/S. AMBER TRADING C O., DAHOD TREATING IT AS BOGUS AND NON-GENUINE AS THE SAID FIRM HAD FAILED TO PROVE THE PURCHASES MADE FROM FARMERS AND UNREGISTERED DEALERS WITH COGENT EVIDENCE. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A.O NO TICED THAT ASSESSEE HAD SHOWN PURCHASE OF SOYABEAN OF RS. 29,22,03,327 /- FROM AMBER TRADING CO. A.O NOTED THAT WHILE FRAMING ASSESSMENT S IN THE CASE OF ASSESSEE FOR A.Y. 08-09 & 09-10 THE PURCHASES MADE BY ASSESSEE FROM AMBER TRADING CO. TO THE EXTENT OF ITS PURCHASE FRO M UNREGISTERED DEALERS WERE TREATED AS BOGUS AND NON GENUINE. THE A.O. THEREFORE ASKED THE ASSESSEE TO PROVE THE GENUINENESS OF PURCHASES. FROM THE DETAILS FURNISHED, A.O NOTED THAT OUT OF THE TOTAL SALES OF RS. 29,22,03,327/- MADE BY AMBER TRADING TO ASSESSEE, GOODS WORTH RS. 19,90,93,805/- WERE PURCHASED BY AMBER TRADING FROM REGISTERED DEA LERS AND THE BALANCE PURCHASES OF RS. 9,31,09,522/- WERE FROM UN REGISTERED DEALERS. A.O ALSO NOTED THAT ASSESSEE DID NOT PRODUCE THE PR OPRIETOR OF AMBER TRADING FOR EXAMINATION. HE THEREFORE HELD THAT ASS ESSEE HAD NOT BROUGHT ANY NEW EVIDENCE TO PROVE THE PURCHASES. HE ALSO N OTED THAT SIMILAR ITA NO 2 392/AHD/2013 . A.Y. 2010- 2011 3 ADDITIONS WERE MADE IN A.Y. 08-09 AND A.Y. 09-10 BY A.O BUT WERE DELETED BY CIT(A) BUT HOWEVER REVENUE HAD FILED APP EAL BEFORE TRIBUNAL WHICH WAS YET TO BE DECIDED. HE ACCORDINGLY, TO MA INTAIN CONSISTENCY MADE ADDITION OF RS. 9,31,09,522/- (OF THE PURCHASE BY AMBER TRADING FROM UNREGISTERED DEALERS). AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DELETED TH E ADDITION BY HOLDING AS UNDER:- 2.4 DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE ASSESSMENT ORDER AND VARIOUS WRITTEN SUBMISSION MADE BY THE APPELLANT. THE ASSESSING OFF ICER HAS MADE THE ADDITION OF RS. 9,31,09,522/- ON ACCOUNT OF CERTAIN PURCHASES MADE FROM M/S. AMBER TRADING CO BY TREATING THE SAME AS BOGUS PURCHASES AS IT WERE MADE FROM AN UNREGISTERED DEALER BY AMBER TRADING CO. THE ASSESSING OFFICER HAS HELD THAT SIMILAR ADD ITIONS WERE MADE FOR ASSESSMENT YEAR 2008- 09 AND ASSESSMENT YEAR 2009-10 AND THE APPELLANT DI D NOT GIVE ANY NEW EVIDENCE TO PROVE THE PURCHASES AND THEREFORE, THE SAME WERE TREATED AS U NEXPLAINED. IT IS NOTED THAT THE ADDITIONS MADE BY THE A.O HAVE BEEN DELETED BY LD. CIT (A) FO R ASSESSMENT YEAR 2008-09 AND 2009-10. FURTHER IT IS ALSO NOTED THAT HONORABLE ITAT HAS AL SO DECIDED THE APPEAL IN FAVOUR OF THE APPELLANT AND UPHELD THE ORDER OF CIT(A) BY HOLDING THAT THE URD PURCHASES OF AMBER TRADING CO. AS GENUINE IN THE HANDS OF THE APPELLAN T COMPANY (ITA NO.126.127&494/AHD/2012 DATED 17.04.2013). AN EXAMI NATION OF THE FACTS INDICATES THAT THE FACTS OF THE CURRENT YEAR ARE IDENTICAL TO THE FACT S OF EARLIER YEAR I.E. ASSESSMENT YEAR 2008-09 AND 2009 -10. THE APPELLANT HAS SUBMITTED A CERTIFI CATE FROM AMBER TRADING CO. DAHOD INDICATING THE AMOUNT OF RD PURCHASES. CONTRA ACCOU NT FROM AMBER TRADING CO. WAS FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. REGARDING THE OBSERVATION OF THE A.O REGARDING NON-PRODUCTION OF THE PROPRIETOR OF AMBER TRADING CO. IT IS NOTED THAT HE DID NOT ISSUE ANY SUMMONS UNDER SECTION 131. THE APPELLANT WAS ALSO NOT INFORMED ABOUT NON- PRODUCTION OR NON-ATTENDANCE OF THE PROPRIETOR. THE NATURE OF URD PURCHASES ARE ALSO SIMILAR TO EARLIER YEARS. THESE FACTS CLEARLY SHOW THAT THE FACTS ARE ADDED EXACTLY IDENTICAL TO EARLIER YEARS AND THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF MY PREDECESSORS AND HONOURABLE ITAT AHMEDABAD, THE DISALLOWANCE OF PURC HASES MADE BY THE A.O IS DIRECTED TO BE DELETED. ITA NO 2 392/AHD/2013 . A.Y. 2010- 2011 4 5. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NO W IN APPEAL BEFORE US. 6. BEFORE US, THE LD. D.R. RELIED ON THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. SUBMITTED THAT ON IDENTICAL FACTS FOR ASSESSME NT YEAR 07-08 TO 09-10 THE HONBLE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF ASSESSEE. HE FURTHER SUBMITTED THAT AGAINST THE ORDER OF TRIBUNAL, REVEN UE HAD PREFERRED APPEAL BEFORE HONBLE GUJARAT HIGH COURT AND THE HO NBLE GUJARAT HIGH COURT CONFIRMED THE ORDER OF TRIBUNAL. HE PLACED O N RECORD THE COPIES OF THE AFORESAID ORDERS OF HIGH COURT AND TRIBUNAL. H E THEREFORE SUBMITTED THAT SINCE THE ISSUE UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEARS AND SINCE IN EARLIER YEARS, THE ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE NO ADDITION WAS CALLED FOR. HE THUS SUPPORTED THE ORD ER OF CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT FOR ASSESSMENT ORDER 07-08, 08-09 & 09 -10, THE ISSUE ON IDENTICAL FACTS WAS DECIDED BY HONBLE TRIBUNAL IN IT(SS)A NOS. 123, 124 & 481/AHD/2012 IN FAVOUR OF THE ASSESSEE BY HOL DING AS UNDER:- 3.7 NOW, WE ARE LEFT WITH GROUNDS NO.3 & 4 OF THE R EVENUE'S APPEAL. REGARDING GROUND NO.3 OF THE REVENUE'S APPEAL, WE FIND THAT A DISALLOWANCE OF RS .2119.45 LACS WAS MADE BY THE A.O. ON ACCOUNT OF ALLEGED FALSE PURCHASE FROM AMBER TRADING CO. THIS DISALLOWANCE WAS DELETED BY LD. CIT (A) BY MAKING FOLLOWING OBSERVATIONS IN PARA 14.3 OF HIS O RDER: '14.3 M/S. AMBER TRADING CO., DAHOD HAS ACCEPTED TH AT THE GOODS ARE SOLD TO THE APPELLANT, PRODUCED ALL SUCH EVIDENCES THAT SUCH GOODS ARE DELIVERED AT THE FACTORY OF THE APPELLANT AND APPELLANT HAS MAD E PAYMENT FOR GOODS SO PURCHASED BY ACCOUNT PAYEE CHE QUE, AND THE APPELLANT ALSO PRODUCED ALL THE NECESSARY EVIDENCES TO PROVE GENUINENESS OF THE IMPUGNED PURCHASES, AFTER ALL SUCH MATERIALS ON RECORDS, THERE IS NO SCOPE FOR AO TO TREAT THE PURC HASES AS NON-GENUINE. FURTHERMORE THE ASSESSING OFFICER OF THE FIRM (M/S. AMBER TRADING CO.) TREATE D THE URD PURCHASES OF M/S. AMBER TRADING CO., DAHOD AS GENUINE, THEN THERE IS NO SPACE LEFT FOR I MAGINATION THAT THE URD PURCHASES OF THE SUPPLIER (M/S. AMBER TRADING CO.) ARE BOGUS. ACCORDINGLY, I DIRECT THE ASSESSING OFFICER TO TREAT ALL SUCH URD PURCHASES AS GENUINE AND DIRECT TO DELETE ADDITION OF RS.21,19,45,382/-. GROUND NO. 1 RELATED TO M/S. AMBER TRADING CO, DAHOD IS ALLOWED.' 3.8 LD. D.R. SUPPORTED THE ASSESSMENT ORDER WHEREAS LD. A.R. SUPPORTED THE ORDER OF CIT(A). 3.9 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, P ERUSED THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. WE FIND T HAT THE DISALLOWANCE IN RESPECT OF PURCHASES FROM AMBER TRADING COMPANY WAS MADE BY THE A.O. ON THIS BASIS THAT OUT OF TOTAL PURCHAS ES CLAIMED BY THE ITA NO 2 392/AHD/2013 . A.Y. 2010- 2011 5 ASSESSEE FROM AMBER TRADING CO. OF RS.4123.10 LACS, TOTAL UN REGISTERED DEALERS (URD) PURCHASES MADE BY AMBER TRADING CO. IN ASSESSMENT YE AR 2008-09 IS RS.2119.45 LACS. THE A.O. WAS OF THE VIEW THAT THE URD PURCHASES OF AMBER TRADING CO. IS BOGUS AND AS A CONSEQUENCE, THE PURC HASES OF THE ASSESSEE COMPANY FROM COMPANY FROM AMBER TRA DING CO. IS ALSO TO BE HELD AS BOGUS TO THE EXTENT OF URD PURCHASES OF AMBER TRADING CO. HENCE, IT IS SEEN THAT THE DISALLOWANCE IN THE PRESENT CASE WAS MADE ON THIS BASIS THAT TO THE EXTENT OF U RD PURCHASES OF AMBER TRADING COMPANY HELD TO BE BOGUS, THE PURCHASES OF THE ASSESSEE COMPANY FRO M AMBER TRADING COMPANY IS ALSO TO BE HELD AS BOGUS. NOW, WE FIND THAT IT IS NOTED BY LD. CIT ( A) IN THE ABOVE PARA THAT THE A.O. OF THE FIRM M/S. AMBER TRADING COMPANY TREATED THE URD PURCHASES OF M/S. AMBER TRADING CO. AS GENUINE. ONCE, THE URD PURCHASES OF M/S. AMBER TRADING CO. IS ACCE PTED AS GENUINE BY THE A.O. OF THAT PARTY, THE DISALLOWANCE MADE BY THE A.O. IN THIS REGARD CANNO T BE SUSTAINED BECAUSE IT HAS NO LEGS TO STAND. ACCORDINGLY, WE DECIDE THIS ASPECT OF THE MATTER IN FAVOUR OF THE ASSESSEE. THUS, GROUND NO.3 OF THE REVENUE'S APPEAL IS ALSO REJECTED. 8. AGAINST THE ORDER OF HONBLE TRIBUNAL, REVENUE CARR IED THE MATTER BEFORE HONBLE GUJARAT HIGH COURT. HONBLE GUJARAT HIGH CO URT IN TAX APPEAL NO. 845/A/2013 ORDER DATED 10.02.2014 CONFIRMING TH E ORDER OF TRIBUNAL DECIDED THE ISSUE AS UNDER:- QUESTIONS (C)& (D) PERTAIN TO PURCHASES MADE BY THE ASSESSEE THROUGH ONE M/S. AMBER TRADING COMPANY, DAHOD. ASSESSING OFFICER DISALLOWED THE PU RCHASES ON THE GROUND THAT M/S. AMBER TRADING COMPANY HAD MADE PURCHASES FROM AN UNREGISTERED DEA LER. HE, IN FACT, DOUBTED THE PURCHASES BY M/S. AMBER TRADING COMPANY ITSELF. LEARNED COUNSEL FOR THE ASSESSEE WOULD HOWEVER CORR ECTLY POINT OUT THAT CIT(A) AS WELL AS THE TRIBUNAL BOTH NOTED THAT IN THE CASE OF THE ASSESSM ENT OF M/S. AMBER TRADING COMPANYITSELF, SUCH PURCHASES WERE ACCEPTED AND FOUND GENUINE. THAT BEI NG THE SITUATION, THE TRIBUNAL IN OUR OPINION CORRECTLY DID NOT ACCEPT THE REVENUES APPEAL, MAKI NG FOLLOWING OBSERVATIONS:- 9. BEFORE US, IT IS ADMITTED BY BOTH THE PARTIES THAT THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARL IER YEARS. EVEN CIT(A) WHILE DECIDING THE APPEAL HAS HELD THAT THE FACTS O F THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THE FACTS FOR A.Y. 08 -09 AND 2009-10. CIT(A) WHILE DELETING THE ADDITION HAS ALSO NOTED T HAT A.O DID NOT ISSUE ANY SUMMONS U/S. 131 OF THE ACT TO AMBER TRADING CO MPANY AND ASSESSEE WAS ALSO NOT INFORMED ABOUT NON PRODUCTION OR NON ATTENDANCE OF PROPRIETOR. WE FURTHER FIND THAT SIMILAR DISALL OWANCE MADE IN EARLIER YEARS WERE DELETED BY THE CO-ORDINATE BENCH OF TRIB UNAL AND THE ORDER OF THE CO-ORDINATE BENCH WAS ALSO UPHELD BY HONBLE GU JARAT HIGH COURT. BEFORE US, REVENUE HAS NOT BROUGHT ANY CONTRARY MAT ERIAL ON RECORD IN ITS ITA NO 2 392/AHD/2013 . A.Y. 2010- 2011 6 SUPPORT. IN VIEW OF THE FOREGOING, WE FIND NO REAS ON TO INTERFERE WITH THE ORDER OF CIT(A) AND THUS UPHOLD HIS ORDER. IN THE RESULT, THIS GROUND OF REVENUE IS DISMISSED. 10. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 05 - 2014. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, AHMEDABAD