Span Hydrotech Pvt.Ltd, Pune V. Deputy Commissioner of Income-tax, Circle - 10, Pune

ITA 2765/PUN/2017

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5633 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 27-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH GAWLI
• Keywords: Bogus purchase; Opportunity of being heard; Principle of natural justice; Reassessment proceedings
• Section: 143(3); 147; 27; 63; 10

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE . , BEFORE SHRI D. KARUNAKARA RAO , AM . / ITA NO S . 27 63 & 2765 /P U N/201 7 / ASSESSMENT YEAR S : 20 0 9 - 10 & 2010 - 11 M/S SPAN HYDROTECH PVT. LTD., GROUND FLOOR, VEDANT 307/2 7 , PRADHIKARAN, NIGDI, PUNE. PAN : AAACN5813F . / APPELLANT VS. DCIT, CIRCLE - 10, PUNE . . / RESPONDENT / APPELLANT BY : SMT. DEEPA KHARE / RESPONDENT BY : SHRI RAJESH GAWLI / DATE OF HEARING : 30 . 10 .2018 / DATE OF PRONOUNCEMENT: 20 . 1 1 .201 8 / ORDER PER D. KARUNAKA RA RAO, AM : THERE ARE TWO APPEALS UNDER CONSIDERATION RELATING TO ASSESSMENT YEARS 2009 - 10 AND 2010 - 11. BOTH THE APPEALS ARE IN CONNECTION WITH THE RE - ASSESSMENT PROCEEDINGS INVOLVING ALLEGED BOGUS PURCHASES. 2. IDENTICAL GROUNDS RAISED BY THE ASSESSE E IN BOTH THE APPEALS. FOR THE SAKE OF CONVENIENCE, THE GROUNDS OF APPEAL IN ITA NO.2763/PUN/2017 READ AS UNDER : - 1. ON THE FACTS AN D CIRCUMSTANCES OF THE CASE, THE REASSESSMENT PROCEEDINGS U/S 147 BEING INITIATED IN ABSENCE OF MATERIAL SHOWING ESCAPEM ENT OF INCOME IN THE HANDS OF THE APPELLANT IS VOID AND MAY KINDLY ITA NO S . 2763 & 2765 /PUN /201 7 - 2 - BE CANCELLED. THE MATERIAL BASED FOR REOPENING IS VAGUE AND HAS NO LIVE LINK WITH ESCAPEMENT OF INCOME IN THE HANDS OF THE APPELLANT. 2. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CON FIRMING ADDITION OF RS.10,57,705/ - ON ACCOUNT OF INFLATED PURCHASES ALLEGED TO BE BOGUS. 3. THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION INSPITE OF HOLDING THAT THE LD. A.O. HAS NOT BROUGHT ON RECORD ANY EVIDENCE TO PROVE THAT TH E PURCHASES WERE BOGUS AND FURTHER IGNORING THE EVIDENCE PRODUCED IN SUPPORT OF THE PURCHASES. 4. THE APPELLANT CRAVES TO ADD, ALTER, MODIFY OR SUBSTITUTE ANY GROUND OF APPEAL AT THE TIME OF HEARING. 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSE SSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF WTP PLANTS, RESELLER IN SPECIALTY CHEMICALS AND JOB WORK CHARGES. THE ASSESSEE FILED ITS RETURN OF INCOME ON 29.09.2009 DECLARING TOTAL INCOME OF RS.3,68,020/ - . THE ASSESSING OFFICER COMPLETED T HE ASSESSMENT U/S 143(3) R.W.S. 147 ON 05.02.2015 AND MADE AN ADDITION OF RS.10,57,705/ - ON ACCOUNT OF BOGUS PURCHASES. 4 . AGGRIEVED WITH THE ORDER OF ASSESSING OFFICER, THE ASSESSEE FILE D AN APPEAL BEFORE THE CIT(A). REJECTING THE VARIOUS EXPLANATIONS OF THE ASSESSEE, THE CIT(A) SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. 5 . AGGRIEVED WITH THE ORDER OF CIT(A) SUSTAINING THE ADDITION, THE ASSESSEE IS IN APPEAL BEFORE ME RAISING THE AFOREMENTIONED GROUNDS . 6 . AT THE OUTSET, DEVIATING FROM TH E GROUNDS, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THIS IS THE CASE OF ALLEGED BOGUS PURCHASE AND THE ASSESSING OFFICER MADE ADDITION ON ENTIRE PURCHASES AS ADDITIONAL INCOME OF THE ASSESSEE IN BOTH THE YEARS. THE CIT(A) CONFIRMED THE SAID ADDITIONS I GNORING THE FACT THAT THE GP RATES ARE NORMALLY CONFIRMED. ITA NO S . 2763 & 2765 /PUN /201 7 - 3 - 7 . ON THESE FACTS, THE LD. COUNSEL FOR THE ASSESSEE FAIRLY SUBMITTED THAT THESE ORDERS OF THE CIT(A) WERE PASSED IN THE MONTH OF AUGUST, 2 017 WITHOUT BENEFIT OF ASSISTANCE OF THE DECISION OF THE P UNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S CHHABI ELECTRICALS PVT. LTD. VS. DCIT VIDE ITA NO.795/PUN/2014, ORDER DATED 28.04.2017 . THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID ORDER WAS PASSED BY THE TRIBUNAL IN THE MONTH OF APRIL, 2017. TH E LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE LOWER AUTHORITIES DID NOT HAVE THE BENEFIT OF COPY OF THE SAME DESPITE THE FACT THAT THE ORDER PASSED BY THE TRIBUNAL IN THE MONTH OF APRIL, 2017. THE LD. COUNSEL FURTHER SUBMITTED THAT THE MATTER MAY BE R EMANDED TO THE FILE OF THE ASSESSING OFFICER FOR FINDING THE GP COMPUTATION OF THE SAID BOGUS PURCHASES IN ACCORDANCE WITH THE ORDER THE OF THE TRIBUNAL SO CALLED. 8 . ON HEARING BOTH THE SIDES, I FIND SUCH ISSUES ON MERITS ARE TO BE 8 . ON HEARING BOTH THE SIDES, I FIND SUCH ISSUES ON MERITS ARE TO BE DECIDED IN THE LIGHT O F THE SAID ORDER OF THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE M/S CHHABI ELECTRICALS PVT. LTD. (SUPRA). IT IS A SETTLED LEGAL PROPOSITION THAT SUCH CASES OF THE BOGUS PURCHASES ARE CLASSIFIED INTO FOUR GROUPS. THE ASSESSEE SHOULD FALL IN ONE OF T HE FOUR CATE GORIES SPECIFIED IN THE SAID DECISION OF THE TRIBUNAL IN THE CASE OF M/S CHHABI ELECTRICALS PVT. LTD. (SUPRA). IN THE REMAND PROCEEDINGS, I DIRECT THE ASSESSING OFFICER TO EXAMINE THE FACTS OF THE PRESENT CASE AND ANALYSE THE DETAILS AND ALSO CLASSI FY THE SA ME INTO ONE OF THE FOUR CATEGORIES ALREADY CONSIDERED BY THE TRIBUNAL IN THE CASE OF M/S CHHABI ELECTRICALS PVT. LTD. (SUPRA). THE ASSESSING OFFICER SHOULD GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE AND PASS A SPEAKING ORDER ON THE ISSUE RAISED BY THE ASSES S EE. ACCORDINGLY, THE ITA NO S . 2763 & 2765 /PUN /201 7 - 4 - GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THIS 20 TH D AY OF NOVEMBER , 2018 . SD/ - ( D. KARUNAKARA RAO ) / ACCOUNTANT MEMBER / PUNE ; DATED : 20 TH NOVEMBER , 2018 . SUJEET / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESP ONDENT; 3. THE CIT(A) - 6 , PUNE ; 3. THE CIT(A) - 6 , PUNE ; 4. THE PR. CIT - 5 , PUNE; 5. , , - / DR SMC , ITAT, PUNE; 6. / GUARD FILE . // TRUE COPY // / BY ORDER, //T RUE COPY// SENIOR PRIVATE SECRETARY , / ITAT, PUNE