ITO, Faridabad V. Sh. Mohan Lal Bansal, Faridabad

ITA 2660/DEL/2010

• Counselvise Citation: 266020114 RSA 2010
• Duration Of Justice: 44 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2014
• Appeal Filed By: Assessee
• Assessment Year: misc
• Appeal Filed On: 01-01-1970
• Court: TRIBUNAL
• Department Lawyers: KEYUR PATEL SENIOR
• Keywords: Bogus purchase; Accommodation entries; Onus to prove
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI I.C. SUDHIR, JUDICIAL MEMBER AND SHRI B.C. MEENA, ACCOUNTANT MEMBER ITA NO.2660/DEL./2010 (ASSESSMENT YEAR : 2007-08) ITO, WARD II (1), VS. SHRI MOHAN LAL BANSAL, FARIDABAD. PROP. M/S. R. ENGG. & FABRICATION WO RKS, DABUA PALI ROAD, FARIDABAD. (PAN : AAKPB2147B) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VIJAY KUMAR GUPTA, ADVOCATE REVENUE BY : SHRI KEYUR PATEL, SENIOR DR ORDER PER B.C. MEENA, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE REVENUE EMANATES FROM THE ORDER OF CIT (A), FARIDABAD DATED 31.03.2010 FOR THE ASSESSMENT YEAR 2007-08. 2. THE RETURN OF INCOME WAS FILED ON 31.10.2007 DEC LARING INCOME OF RS.1,60,110/-. THE ASSESSEE STATED TO BE ENGAGED I N THE BUSINESS OF FABRICATION. FOR THE YEAR, THE SALES DECLARED WERE ONLY RS.29,49,357/-. THE ASSESSING OFFICER FOUND THAT SUNDRY CREDITORS, M/S. MAA DURGA TRADING CO. AND M/S. GARIMA SALES CORPORATION WERE HAVING OUTST ANDING AS ON 31.03.2007. THE ASSESSING OFFICER DEPUTED THE INSP ECTOR TO VERIFY THE ITA NO.2660/DEL./2010 2 CREDITORS AND THE INSPECTOR FOUND THAT THERE WAS NO SUCH CONCERN ON THE GIVEN ADDRESSES. IT IS CLAIMED THAT M/S. MAA DURGA TRADI NG CO. HAS DISCONTINUED ITS BUSINESS IN 2008-09 AND WAS DOING ITS OFFICIAL WORK FROM THE ADDRESS, HOUSE NO.231, SECTOR 11-D, FARIDABAD. M/S. MAA DURGA TRA DING CO. IS CLAIMED TO BE A PROPRIETORSHIP CONCERN OF SHRI VINOD KUMAR GOY AL AND M/S. GARIAM SALES CORPORATION IS A PROPRIETORSHIP CONCERN OF WI FE OF SHRI VINOD KUMAR GOYAL, SMT. SOVIKA GOYAL. INITIALLY, SHRI VINOD KU MAR GOYAL STATED THAT HE HAS NOTHING TO DO WITH M/S. MAA DURGA TRADING CO. A ND SIMILARLY IN THE CASE OF M/S. GARIMA SALES CORPORATION, HE STATED THAT TH E BOOKS OF ACCOUNTS WERE DAMAGED AS COMPUTER WAS CRASHED AND ENTIRE DATA WAS STATED TO BE LOST. THE CIT (A) HAS GRANTED THE RELIEF ON THE BASIS THAT TH ESE TWO CREDITORS WERE HAVING BANK ACCOUNT WITH STATE BANK OF PATIALA, THE PAYMENTS HAVE BEEN MADE BY ACCOUNT PAYEE CHEQUES, PARTY WAS IN EXISTEN CE AND THE CONFIRMATIONS WERE ALSO FILED. NOW, THE REVENUE IS IN APPEAL BEF ORE US BY TAKING THE FOLLOWING GROUNDS :- '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING TH E ADDITION OF RS.25,76,757/- MADE BY THE ASSESSING OFFICER ON ACC OUNT OF BOGUS PURCHASES EVEN THOUGH THE ASSESSEE HAD FAILED TO DISCHARGE HIS ONUS TO PROVE THE IDENTITY OF THE CON CERN AS WELL AS THE GENUINENESS OF TRANSACTIONS WITH THIS CONCERN. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ORDER OF THE LD. CIT(A) IS PERVERSE ON FACTS, HAVING TAKE N SH. VINOD KUMAR GOYAL'S DENIAL AS HIS CONFIRMATION AS IN RESP ECT OF Q.-5, HE CATEGORICALLY STATED THAT HE HAD NOTHING TO DO W ITH THE ITA NO.2660/DEL./2010 3 CONCERN M/S MAA DURGA CO., WHICH PROVES THAT THE AS SESSEE HAD FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACT IONS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE FINDINGS RECORDED BY THE LD. CIT(A) IS PERVERSE IN OBSERVING THAT THE ASSESSING OFFICER DID NOT ENFORCE COMPLIAN CE THROUGH THE PROVISIONS OF SECTION 133(6)/131 AS LATER IN HI S ORDER, IN PARA 6 AT PAGE 12, THE LD. CIT(A) CONTRADICTS TO STATE T HAT SH. VINOD KUMAR GOYAL ATTENDED ASSESSING OFFICER'S OFFICE AND HIS STATEMENT U / S 131 WAS RECORDED BY THE ASSESSING O FFICER. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING TH E ADDITION OF RS.6,84,142/ - MADE BY THE ASSESSING OFFICER ON ACC OUNT OF BOGUS LIABILITY ESPECIALLY WHEN THE ASSESSEE HAD FA ILED TO DISCHARGE HIS ONUS TO PROVE THE IDENTITY OF M/ S GA RIMA SALES CORPORATION AS WELL AS THE GENUINENESS OF TRANSACTI ONS WITH THIS CONCERN. 5. THAT THE APPELLANT CRAVES FOR THE PERMISSION TO ADD, DELETE OR AMEND THE GROUNDS OF APPEAL BEFORE OR AT THE TIM E OF HEARING OF APPEAL. 3. LD. DR RELIED ON THE ORDER OF THE ITAT IN THE CA SE OF JONEJA BRIGHT STEEL PVT. LTD. VS. ADDL. CIT IN ITA NO.3761/DEL/20 12 DATED 06.12.2013 AND PLEADED THAT IN THAT CASE, THE PURCHASES FROM M/S. MAA DURGA TRADING CO. WERE NOT GENUINE. THIS CONCERN IS ENGAGED IN PROVI DING BOGUS ACCOMMODATION ENTRIES. ON THE OTHER HAND, LD. AR R ELIED ON THE ORDER OF THE CIT (A) AND ALSO RELIED ON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF GHERU LAL BAL CHAND VS. STATE OF HARYANA & ANR. REPORTED IN (2011) 45 VST 195 (P&H) FOR THE PROPOSI TION THAT NO LIABILITY UNDER THE HARYANA VALUE ADDED TAX ACT, 2003, COULD BE FASTENED ON THE PURCHASING REGISTERED DEALER ON ACCOUNT OF NON-PAYM ENT OF TAX BY THE SELLING ITA NO.2660/DEL./2010 4 REGISTERED DEALER IN THE TREASURY UNLESS FRAUDULENC E, COLLUSION OR CONNIVANCE OF THE REGISTERED SELLING DEALER OR ITS PREDECESSOR S WITH THE PURCHASING REGISTERED DEALER WAS ESTABLISHED. HE ALSO DRAW OU R ATTENTION TO THE FACT THAT THE ASSESSEES NAME AND FIGURES ARE MENTIONED IN QU ARTERLY RETURNS FILED BY M/S. MAA DURGA TRADING CO. WITH THE VAT DEPARTMENT IN FORM NO.LS-9. 4. WE HAVE HEARD BOTH THE SIDES ON THE ISSUE. AFTE R HEARING BOTH THE SIDES, WE FIND THAT M/S. MAA DURGA TRADING CO. HAS BEEN FOUND TO BE INDULGING IN THE RACKET OF PROVIDING BOGUS PURCHASE BILLS, THEREFORE, THE RATIO LAID DOWN BY HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF GHERU LAL BAL CHAND, CITED SUPRA, IS NOT APPLICABLE TO THE FA CTS OF ASSESSEES CASE. RATHER THE HON'BLE JURISDICTIONAL HIGH COURTS DECI SION SUPPORTS THE CASE OF THE REVENUE AS M/S. MAA DURGA TRADING CO. WAS FOUND TO BE COLLUSIVE AND IN CONNIVANCE WITH THE ASSESSEE. FURTHER, IN THE CASE OF M/S. GARIMA SALES CORPORATION ALSO WHICH WAS BEING RUN BY THE WIFE OF THE PROPRIETOR OF M/S. MAA DURGA TRADING CO., THE ASSESSEE HAS FAILED TO D ISCHARGE HIS ONUS REGARDING GENUINENESS OF THE TRANSACTION. SIMPLY S TATING THAT THE COMPUTER HAS CRASHED AND DATA IS NOT AVAILABLE, SHALL NOT BE SUFFICIENT TO DISCHARGE THE ONUS. M/S. GARIMA SALES CORPORATION MUST HAVE PURCHASE AND SALES VOUCHERS/BILLS IN PHYSICAL FORMS AND EVEN WITHOUT COMPUTERIZED ACCOUNT, IT COULD HAVE DEMONSTRATED THE GENUINENESS OF THE TRANSACTIONS AND PURCHASES. SIMPLY STATING THAT ASSESSEES NAME APPEARING IN THE VAT RETURN FILED BY M/S.MAA DURGA ITA NO.2660/DEL./2010 5 TRADING CO. IS ALSO NOT SUFFICIENT TO ESTABLISH THE GENUINENESS OF THE PURCHASES. KEEPING IN VIEW ALL THESE FACTS AND CIR CUMSTANCES, WE FIND THAT CIT (A) WAS NOT JUSTIFIED IN GRANTING THE RELIEF TO THE ASSESSEE. HOWEVER, IN THE INTEREST OF JUSTICE AND EQUITY, WE FIND IT APPR OPRIATE THAT TO ARRIVE AT THE CORRECT FACTS, THIS CASE NEEDS A FRESH LOOK AT THE LEVEL OF THE ASSESSING OFFICER. THEREFORE, WE SET ASIDE THE ORDER OF THE CIT (A) AN D RESTORE THE ISSUE TO THE FILE OF THE ASSESSING OFFICER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLO WED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 24 TH DAY OF APRIL, 2014. SD/- SD/- (I.C. SUDHIR) (B.C. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED THE 24 TH DAY OF APRIL, 2014 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), FARIDABAD. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.