Shri. Nikhil S. Mahanth, Haveri V. Income Tax Officer, Ward-1, Haveri

ITA 2926/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0254 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 29-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE S HRI JASON P BOAZ , ACCOUNTANT MEMBER AND SHRI LALIET KUMAR, JUDICIAL MEMBER I.T . A. NO. 2926 /BANG/20 17 (ASSESSMENT YEAR : 20 12 - 13 ) SHRI NIKHIL S MAHANTH, GENERAL MERCHANT & COMMISSION AGENT, P B NO.24, NEAR BUS STAND, HAVERI. . APPELLANT. VS. INCOME TAX OFFICER, WARD 1, HAVERI. .. RESPONDENT. APPELLANT BY : SHRI ZAIN AHMED KHAN, CA R E SPONDENT BY : DR. P.V. PRADEEP KUMAR, ADDL.CIT. (D.R) DATE OF H EARING : 04.09.2018. DATE OF P RONOUNCEMENT : 20. 9 .201 8 . O R D E R PER SHRI JASON P BOAZ , A .M . : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) , DAVANGE RE DT.19.09.2017 FOR THE ASSESS MENT YEAR 20 12 - 13. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS UNDER : - 2 IT A NO. 2926 /BANG/20 17 2.1 THE ASSESSEE, A DEALER IN MAIZE, RICE AND WHEAT, FILED HIS RETURN FOR ASSESSMENT YEAR 2012 - 13 ON 28.09.2012 DECLARING INCOME OF RS.37,100. THE RETURN WAS PROCESSED UN DER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') AND THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY IN THE YEAR UNDER CONSIDERATION. THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DT.313.2015, WHEREIN THE ASSE SSEE'S INCOME WAS DETERMINED AT RS.16,82,287 IN VIEW OF THE FOLLOWING ADDITIONS / DISALLOWANCES : - I) DIFFERENCE IN PURCHASES RS.53,249. II) DISALLOWANCE U/S.40A(3) RS.6,28,500. III) DISALLOWANCE OF URD JOWAR PURCHASES RS.10,00,538. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT FOR ASSESSMENT YEAR 2012 - 13, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (APPEALS), DAVANGERE. THE LEARNED CIT (APPEALS) DISPOSED OFF THE APPEAL VIDE THE IMPUGNED ORDER DT.19.09.2017 , ALLOWING THE ASSESSEE PARTIAL RELIEF. 3 . THE ASSESSEE BEING AGGRIEVED BY THE ORDER OF THE CIT (APPEALS), DAVANGERE DT.19.9.2017 FOR ASST . YEAR 2012 - 13 HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL, WHEREIN HE HAS RAISED THE FOLLOWING GROUNDS : - 3 IT A NO. 2926 /BANG/20 17 4. GROUNDS 1 & 4 BEING GENERAL IN NATURE , NO ADJUDICATION IS CALLED FOR THEREIN. 5. GROUND NO .2 DISALLOWANCE OF BOGUS PURCHASES. 5.1 IN THE ABOVE GROUND AT S.NO.2 (SUPRA) IS RAISED IN RESPECT OF THE SOLITARY ISSUE OF THE DISALLOWANCE OF PAYMENTS TOWARDS PURCHASE OF JOWAR A MOUNTING TO RS.10,00,538 AS BEING BOGUS. 5.2 ACCORDING TO THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE, AS PER GROUND NO.2, IT IS SUBMITTED THAT THE ASSESSING OFFICER MADE THE AFORESAID DISALLOWANCE OF BOGUS PURCHASE OF JOWAR ON ACCOUNT OF THE SAME NOT BEING DEBITED IN THE PROFIT AND LOSS ACCOUNT; WHICH FINDING OF FACT RENDERED BY THE ASSESSING OFFICER IS RECORDED AT PARA 5.1 OF THE IMPUGNED ORDER. THIS MEANS THAT THE ASSESSEE HAS NOT CLAIMED 4 IT A NO. 2926 /BANG/20 17 THIS EXPENDITURE IN ITS PROFIT AND LOSS ACCOUN T. IT IS CONTENDED THAT ON THIS FINDING OF THE ASSESSING OFFICER ALONE; I.E. THAT THESE PURCHASES OF JOWAR WERE NOT DEBITED TO THE ASSESSEE'S PROFIT AND LOSS ACCOUNT; THE DISALLOWANCE IS LIABLE TO BE DELETED, SINCE WHAT IS NOT CLAIMED OR DEBITED TO THE AS SESSEE'S PROFIT AND LOSS ACCOUNT CANNOT BE DISALLOWED. IT IS PRAYED THAT SINCE THE ABOVE DISALLOWANCE BY THE ASSESSING OFFICER IS NOT IN KEEPING WITH ACCOUNTING PRINCIPLES, THE DISALLOWANCE IS TO BE DELETED. 5.3 PER CONTRA, THE LEARNED DEPARTMENT AL REPRESENTATIVE FOR REVENUE SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 5.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD. IN THE ORDER OF ASSESSMENT, THE ASSESSING OFFICER WHILE MAKING HE SAI D DISALLOWANCE OF RS.10,00,538 ON ACCOUNT OF BOGUS PURCHASES OF JOWAR AT PARA 5.1 THEREOF HAS HELD AS UNDER : - 5 IT A NO. 2926 /BANG/20 17 5.4.2 FROM A PERUSAL OF THE FINDING RENDERED BY THE ASSESSING OFFICER AT PARA 5.1 OF THE ORDER OF ASSESSMENT (SUPRA), WE FIND THAT THE CASE OF THE ASSESSING OFFICER IS THAT ON EXAMINATION OF THE ISSUE OF PURCHASES OF JOWAR; HE FIND S AND HOLD S THAT THESE PURCHASES AMOUNTING TO RS.10,00,538 ARE TO BE DISALLOWED AS THEY ARE NOT VERIFIABLE AND ALSO NOT DEBITED TO THE ASSESSEE'S PROFIT AND LOSS ACCOUNT. IF, AS HELD BY THE ASSESSING OFFICER THAT, THESE PURCHASES ARE BOTH UNVERIFIABLE AND NOT DEBITED TO THE ASSESSEE S PROFIT AND LOSS ACCOUNT, THEN THE SAME COULD NOT BE DISALLOWED AS NO CLAIM FOR SUCH DEBIT HAS BEEN CLAIMED BY THE 6 IT A NO. 2926 /BANG/20 17 ASSESSEE IN THE PROFIT AND LOSS ACCOUNT . IN THIS FACTUAL VIEW OF THE MATTER, AS PER THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE ON HAND, WE DELETE THE AFORESAID DISALLOWANCE OF RS.10,00,538 MADE BY THE ASSESSING OFFICER. CONSEQUENTLY, GROUND NO.2 OF THE ASSESS EE'S APPEAL IS ALLOWED. 6. IN VIEW OF OUR AFORESAID FINDING WITH RESPECT TO GROUND NO.2 (SUPRA) DE LETING THE DISALLOWANCE MADE AND THEREBY ADDRESSING THE ASSESSEE'S GRIEVANCE , THE ALTERNATE CLAIM RAISED IN GROUND NO.3 OF THE ASSESSEE'S APPEAL (SUPRA) IS RENDERED ACADEMIC AND NEED NOT TO BE ADJUDICATED AT THIS STAGE. 7. IN THE RESULT, THE ASSESSEE'S APPEA L FOR ASSESSMENT YEAR 2012 - 13 IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 20TH DAY OF SEPT., 201 8 . SD/ - ( LALIE T KUMAR ) JUDICIAL MEMBER SD/ - ( JASON P BOAZ ) ACCOUNTANT MEMBER BANGALORE, DT. 20 .09.2018. *REDDY GP