Gaurav Bhutani, New Delhi V. ITO, New Delhi

ITA 2679/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3706 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 02-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: V R SACHDEV; SONIA
• Keywords: Accommodation entries
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.2679/DEL/2017 ASSESSMENT YEAR : 2006-07 GAURAV BHUTANI, 58, SSI INDL. AREA, G.T. KARNAL ROAD, NEW DELHI. PAN: AHLPB6008M VS. ITO, WARD-19(3), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : MS SONIA, CA & SHRI V.R. SACHDEV, FCA DEPARTMENT BY : SHRI T. VASANTHAN, SR. DR DATE OF HEARING : 17.10.2017 DATE OF PRONOUNCEMENT : 18.10.2017 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 27.02.2017 IN RELATION TO THE ASSESSM ENT YEAR 2006-07. ITA NO.2679/DEL/2017 2 2. BOTH THE GROUNDS RAISED IN THIS APPEAL RELATE TO THE ONLY ISSUE OF PURCHASE OF ALUMINUM SCRAP FROM M/S SHREE BANKEY BI HARI TRADING CO., TREATED BY THE AUTHORITIES AS BOGUS. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSING OFFICER RECEIVED INFORMATION FROM ACIT, CENTRAL CIRCLE-10 T HAT SHRI RAKESH GUPTA AND SHRI VISHESH GUPTA WERE INDULGING IN PROV IDING ACCOMMODATION ENTRIES AND CHARGING COMMISSION FROM THE BENEFICIARIES. THE ASSESSEE HAD SHOWN PURCHASES OF RS.2,68,269/- F ROM M/S SHREE BANKEY BIHARI TRADING CO., WHICH WAS CONTROLLED AND MANAGED BY THE ABOVE SAID ENTRY OPERATORS. NOTICE U/S 148 WAS ISS UED. THE ASSESSING OFFICER MADE ADDITION BY TREATING SUCH PURCHASES AS BOGUS. IN ADDITION, HE ALSO MADE AN ADDITION OF RS.1,341/-, BEING, COM MISSION PAID @ 0.25 TO 0.50 PER 100 ON THE ABOVE SAID PURCHASE TREATED AS BOGUS. THE LD. CIT(A) SUSTAINED THE ADDITION, AGAINST WHICH THE A SSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. STATEMENT OF SHRI VISHESH GUPT A IS AVAILABLE ON ITA NO.2679/DEL/2017 3 PAGE 138 OF THE PAPER BOOK. IN RESPONSE TO QUESTIO N NO.2, HE SUBMITTED THAT 95% OF HIS BUSINESS WAS OF ISSUING BOGUS PURCH ASE BILLS AND ACCOMMODATION ENTRIES. IN ANSWER TO QUESTION NO. 3 , HE STATED THE MODUS OPERANDI FOR ISSUING BOGUS BILLS DURING FINANCIAL YEARS 20 04-05 TO 2010- 11 THROUGH HIS CONCERNS, WHICH ALSO INCLUDE M/S S HREE BANKEY BIHARI TRADING CO., FROM WHOM THE ASSESSEE HAD SHOWN PURCH ASES. SIMILAR STATEMENT WAS MADE BY SHRI RAKESH GUPTA, A COPY OF WHICH IS AVAILABLE AT PAGE 132 OF THE PAPER BOOK. HE ALSO ADMITTED OF DOING 95% OF HIS BUSINESS THROUGH THESE CONCERNS AS BOGUS. A CLOSE SCRUTINY OF THESE STATEMENTS SHOWS THAT FIRSTLY NAME OF THE ASSESSEE IS NOT APPEARING AS A BENEFICIARY OF ACCOMMODATION ENTRY. SECONDLY, BOTH OF THEM ADMITTED THAT 95% OF THE BUSINESS WAS OF ACCOMMODATION ENTRI ES, IMPLIEDLY, 5% OF THE BUSINESS WAS GENUINE. IT IS FURTHER NOTICED THAT THE ASSESSEE MADE TOTAL PURCHASE DURING THE YEAR AMOUNTING TO RS.22.4 3 LAC AND MADE SALES AMOUNTING TO RS.34.08 LAC. SALES MADE BY THE ASSES SEE HAVE NOT BEEN DISPUTED BY THE ASSESSING OFFICER. IT IS FURTHER I MPORTANT TO NOTE THAT BOTH SHRI VISHESH GUPTA AND SHRI RAKESH GUPTA ADMIT TED THE PROVISION OF ACCOMMODATION ENTRIES DURING FINANCIAL YEARS 200 4-05 TO 2010-11. ITA NO.2679/DEL/2017 4 THE CASE OF THE ASSESSEE FOR THE IMMEDIATELY SUCCEE DING YEAR, NAMELY, A.Y. 2007-08 WAS TAKEN UP FOR CONSIDERATION AFTER I SSUING NOTICE U/S 148 ON THE GROUND OF RECEIVING ACCOMMODATION ENTRIES. VIDE ORDER DATED 26.02.2015, WHOSE COPY IS AVAILABLE ON PAGES 136 AN D 137 OF THE PAPER BOOK, THE ASSESSING OFFICER ACCEPTED THE RETURNED I NCOME WITHOUT MAKING ANY ADDITION. THE AO HAS RECORDED IN SUCH O RDER THAT: THERE WAS INFORMATION RECEIVED FROM ITO, WARD 19(1), NEW DELHI WHICH WAS BASED ON THE INFORMATION CIRCULATED BY THE DCIT/ACI T, CENTRAL CIRCLE- 10, JHANDEWALAN, NEW DELHI ALLEGING THAT M/S DURGA PRECISION WAS A BENEFICIARY OF ACCOMMODATION ENTRY OF RS.4,81,117/- , OF WHICH SHRI GAURAV BHUTANI (THE ASSESSEE IN QUESTION) IS THE PR OPRIETOR. THEREAFTER, NOTICE U/S 148 WAS ISSUED AND IN THE FINAL ASSESSME NT ORDER, THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS NOT TH E BENEFICIARY OF ANY ACCOMMODATION ENTRY PROVIDED BY THE ACCOMMODATION E NTRY PROVIDERS. ASSESSMENT YEAR 2007-08 IS ALSO COVERED WITHIN THE PERIOD OF 2004-05 TO 2010-11 STATED BY SHRI VISHESH GUPTA AND SHRI RA KESH GUPTA DURING WHICH THEY ISSUED ACCOMMODATION ENTRIES. SINCE SHR I VISHESH GUPTA AND SHRI RAKESH GUPTA DID NOT SPECIFICALLY NAME THE ASSESSEE AS A ITA NO.2679/DEL/2017 5 BENEFICIARY OF ACCOMMODATION ENTRY; ADMITTED THAT 5 % OF THEIR BUSINESS TRANSACTIONS WERE GENUINE; AND THE ASSESSING OFFICE R ACCEPTING SIMILAR ENTRIES AS GENUINE IN THE IMMEDIATELY SUCCEEDING AS SESSMENT YEAR BY MEANS OF ASSESSMENT ORDER PASSED U/S 143(3) READ WI TH SECTION 147, I AM OF THE CONSIDERED OPINION THAT THE ADDITIONS MADE B Y THE ASSESSING OFFICER ON THIS SCORE AND SUSTAINED IN THE FIRST AP PEAL DESERVE TO BE DELETED. I ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.10.201 7. SD/- [R.S. SYAL] VICE PRESIDENT DATED, 18 TH OCTOBER, 2017. DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.