M/s. Vijay Steel, Vadodara V. The ITO, Ward-3(1)(2), Baroda

ITA 2710/AHD/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8968 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 04-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Accommodation entries
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S VIJAY STEEL, OPP. ZENITH HIGH SCHOOL DABHOI ROAD, PRATAP NAGAR, VADODARA - 390019 PAN: AADFM8807A (APPELLANT) VS THE IT O , WARD - 3( 1 )(2) , BARODA (RESPONDENT) REVENUE BY : S H RI VIRENDRA SINGH , SR. D . R. ASSESSEE BY: NONE DATE OF HEARING : 13 - 06 - 2 019 DATE OF PRONOUNCEMENT : 27 - 06 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THESE TWO APPEALS F ILED BY ASSESSEE FOR A.Y. 2012 - 13 & 2013 - 14 , ARI SE FROM ORDER OF THE CIT(A) - 3, VADODARA DATED 29 - 08 - 2 017 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO S . 2710 & 2711 / A HD/20 17 A SS ESSMENT YEAR 2012 - 13 & 2013 - 14 I.T.A NO S . 2710 & 2711 /AHD/20 17 A.Y.2012 - 13 & 2013 - 14 PAGE NO M/S. VIJAY STEEL VS. IT O 2 2. IN BOTH THE APPEALS OF THE ASSESSEE , A COMMON ISSUE IS INVO LVED OF DISALLOWING INTEREST EXPENSES OF RS. 1,80,000/ - IN RESPECT TO LOAN OF RS. 20 LACS TAKEN ON 10 TH MAY, 2010 FROM MR. SAMPATKUMAR DADHIC H, PROPRIETOR OF MAAN DIAMOND TREATING THE SAID LOAN AS NON - GENUINE. THIS APPEAL IS F I LED AGAINST THE DECISION OF THE LD. CIT(A) IN SUSTAINING THE AFORESAID DISALLOWANCE OF INTEREST EXPENSES OF RS. 1,80,000/ - BY THE ASSESSING OFFICER AS PER ASSESSMENT MADE U/S. 143(3) OF THE ACT. 3. AS THE FACTS IN BOTH THE APPEALS IS SIMILAR, SO, WE TAKE ITA NO. 2710/AHD/2017 AS A L EAD CASE AND ITS FINDINGS WILL BE APPLICABLE TO ITA 2711/AHD/2017 FOR THE SAKE OF CONVENIENCE. 4. THE FACT IN BRIEF IS THAT THE CASE OF THE ASSESSEE WAS SUB JECT TO SCRUTINY AND ASSESSMENT U/S. 143(3) OF THE AC T WAS PASSED ON 20 TH MARCH, 2015 WHEREIN THE INTEREST AMOUNT OF RS. 1,80,000/ - WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. DURING THE COURSE OF ASSESSMENT, IT WAS NOTICED THAT ASSESSEE OBTAINED LOAN FROM MAA N DIAMOND S AN D THE CLOSING BALANCE OF LOAN AS ON 20 TH MARCH, 2015 WAS RS. 20 LACS ON WHIC H THE ASSES S EE HAS CLAIMED INTEREST PAYMENT OF RS. 1,80,000/ - . THE ASSESSING OFFICER HAS REPORTED THAT A SEARCH ACTION U/S. 132 OF THE ACT WAS COND UCTED IN THE CASE OF THE BHANWARL AL JAIN GROUP BY INVESTIGATION WING MUMBAI ON 3 RD APRIL, 2013 . A S PER THE I NCRIMINATING DOCUMENT EVIDENCES SEIZED FROM THE SEARCH , IT WAS ESTABLISHED THAT BHANWAR LAL JAIN G ROUP WAS INVOLVED IN PROVIDING ACCOMMODATION ENTR IES THROUGH VARIOUS BOGUS CONCER N S OPERATED BY THEM. IT WAS ESTABLISHED THA T BHANWARLAL JAIN AND FAMILY HAVE USED 70 BENAMI CONCERNS TO GIVE ACCOMMODATION ENTRIES IN THE NATURE OF BOGUS PURCHASES AND BOGUS I.T.A NO S . 2710 & 2711 /AHD/20 17 A.Y.2012 - 13 & 2013 - 14 PAGE NO M/S. VIJAY STEEL VS. IT O 3 UNSECURED LOAN S TO VARIOUS BENEFICIARIES. MOST OF THE PERSONS WERE OPERATING DUMMY CONCERNS WERE MERELY EMPLOYEES OF B HANW AR LAL JAIN AND FAMILY AND IN THEIR S TATEMENTS RECORDED U/S. 132(4) OF THE ACT , T HEY HAVE ADMITTED THAT THEY WERE MERELY DUMMY DIRECTOR/PARTNER/PROPRIETOR WORKING ON BEHALF OF B HANW ARLAL. DURING THE COURSE OF INVESTIGATION IN THE CASE OF THE B HANWARLAL JAIN G ROUP , IT WAS FOUND THAT THEY HAVE PROVIDED ACCOMMODATION ENTRIES OF UNSECURED LOANS TO VARIOUS BE NEFICIARIES AND ASSESSEE VIJAY STEEL WAS ONE OF THE BENEFICIARIES WHO HAS OBTAIN ED BOGUS UNSECURED LOAN FROM MAA N DIAMOND S WHICH WAS ONE OF THE BANAMI CONCERNS OF T HE BHANW ARLAL GROUP ENGAGED IN PROVIDING ACCOMMODATION ENTRIES OF LOAN S . THE ASSESSING OFFICER HAS ELABORATED THE DETAIL OF MODUS OPERANDI ADOP TED BY THE BENAMI CONCERNS OF BHANW ARLAL GROUP IN PROVIDING ACCOMMODATION ENTRIES AT PAGE NO. 13 TO 32 OF THE ASSESSMENT ORDER. SINCE THE ASSESSEE HAS NOT OBTAINED ANY NEW FRESH UNSECURED LOAN FROM M AA N DIAMOND S DURING THE YEAR UNDER CONSIDERATION , THEREFORE, AMOUNT OF INTEREST TO THE AMOUNT OF RS. 1,80,000/ - ON THE OUTSTANDING LOAN PAYABLE TO THE AFORESAID CONCERNS WAS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE ON THE GROUND THAT INTEREST WAS PAID TO THE BOGUS CONCERNS. 5. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE STATING THAT ASSESSING OFFICER HAS PASS ED DETAILED AND VERY REASONED ORDER. 6. WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND GONE THROUGH THE MATERIAL ON RECORD. IT IS NOTICED THAT DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE LD. CIT(A) , THE ASSESSEE HAS GIVEN WRITTEN SUBMISSION I.T.A NO S . 2710 & 2711 /AHD/20 17 A.Y.2012 - 13 & 2013 - 14 PAGE NO M/S. VIJAY STEEL VS. IT O 4 REPORTED AT PAGE NO. 5 TO 10 OF THE ORDER OF LD. CIT(A). HOWEVER, IT IS NOTICED THAT LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE WITHOUT PASSING ANY SPEAKING ORDER AND WITHOUT CITING POINTS OF DETERMINATION AND REASONS FOR THE DECISION. THE RELE VANT PART O F THE DECISION OF THE LD. CIT(A) IS REPRODUCED AS UNDER : - 5. I HAVE CONSIDERED THAT THE FACTS OF THE CASE, SUBMISSIONS OF THE APPELLANT AND THE AO S OBSERVATIONS. THE ASSESSING OFFICER HAS PASSED DETAILED AND VERY REASONED ORDER. THE APPELLAN T HAS NOT FURNISHED ANY NEW FACTS BEFORE ME IN SUPPORT OF THE GROUNDS OF APPEAL TAKEN EXCEPT FILING COPIES OF THE LEDGER ACCOUNTS OF THE ENTRY PROVIDERS. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES, THE GROUNDS OF APPEAL TAKEN ARE DISMISSED. I T IS DEMONSTRATED FROM THE DECISION OF THE LD. CIT(A) AS SUPRA THAT LD. CIT(A) HAS NOT ADJUDICATED THE ISSUE WITH DETAILED REASONING. THE PROVISIONS OF THE SECTION 250(6) ARE IN THE NATURE OF INSTRUCTIONS TO BE APPELLATE AUTHORITY AND EMPHASIZING THAT THE ORDER DISPOSING OF THE APPEAL SHALL BE A SPEAKING ORDER. THE ORDER SHALL BE SELF - EXPLANATORY. SUCH ORDERS ARE TO STATE THE POINTS ARISING IN THE APPEAL, THE DECISION OF THE AUTHORITY THEREON AND THE REASONS FOR SUCH DECISION. IN THE LIGHT OF THE ABO VE FACTS AND CIRCUMSTANCES, WE CONSIDER THAT AS PER SECTION 250(6) OF THE IT ACT , THE ORDER OF THE C OMMISSION ER(A PPEAL ) DISPO SING OF THE APPEAL SHALL STATE THE POINTS FOR DETERMINATION , THE DE CI SION THEREON AND REASON FOR THE DECISION. AFTER CONSIDERING T HE AFORESAID DECI SION OF LD. CIT(A), WE OBSERVE THAT LD. CIT(A) HAS NOT DECIDED THE ISSUE WITH SPEAKING ORDER ALONG WITH REASONS FOR THE DECISION AS LAID DOWN IN THE PROVISION OF SECTION 250(6) OF THE ACT. THEREFORE, WE RESTORE THIS ISSUE TO THE FILE OF LD. CIT(A) TO RE - ADJUDICATE AND PASS SPEAKING ORDER WITH REASONS FOR I.T.A NO S . 2710 & 2711 /AHD/20 17 A.Y.2012 - 13 & 2013 - 14 PAGE NO M/S. VIJAY STEEL VS. IT O 5 THE DECISION AS LAID DOWN U/S. 250(6) OF THE ACT. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. 8. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PR ONOUNCED IN THE OPEN C OURT ON 27 - 06 - 201 9 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 27 /06 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,