Smt. Kokilaben Mafatlal Shah, Vadodara V. DCIT, Circle-3(1), Vadodara

ITA 293/AHD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9846 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 27-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Assessee Lawyers: SUNIL H TALATI
• Keywords: Bogus purchase
• Section: 143(3); 133(6); 143(2); 145(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH (CONDUCTED THROUGH VIRTUAL COURT) BEFORE: SHRI AMARJIT SINGH, ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER SMT. KOKILABEN MAFATLAL SHAH, A-12, OMKAR SOCIETY, B/H, SHANTIVAN VIDYALAYA, AJWA ROAD, VADODARA PAN: AMKPS0488A (APPELLANT) VS DEPUTY CIT, CIRCLE-3(1), VADODARA (RESPONDENT) REVENUE BY: SHRI L.P. JAIN, SR. D.R. ASSESSEE BY: SHRI SUNIL H. TALATI, A.R. DATE OF HEARING : 08-07-2021 DATE OF PRONOUNCEMENT : 16-07-202 1 /ORDER PER : AMARJIT SINGH, ACCOUNTANT MEMBER:- THIS ASSESSEES APPEAL FOR A.Y. 2012-13, ARISES FRO M ORDER OF THE CIT(A)-3, VADODARA DATED 24-01-2019, IN PROCEEDING S UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1. THE LEARNED CIT(A) HAS EARNED IN CONFIRMING THE ACTION OF THE A.,O. OF REJECTING THE BOOKS OF ACCOUNTS FOR THE REASON THAT THE COMPLIANC E HAVE NOT BEEN GIVEN BY THE TRANSPORTER PARTIES TO WHOM NOTICES U/S 133(6) OF I.T. ACT WERE ISSUED. EVEN THOUGH COMPLETE ADDRESS AND CONTACT DETAILS OF TRANSPORTER PARTIES WERE PROVIDE D TO THE LD. A.O. AND TO LD. CIT(A) BY THE APPELLANT, THE AUDITED BOOKS OF ACCOUNT HAVE BEEN R EJECTED U/S 145(3) OF I.T. ACT ON THIS GROUND ITA NO. 293 /AHD/2019 ASSESSMENT YEAR 2012-13 I.T.A NO. 293/AHD/2019 A.Y. 2012-13 PAGE NO SMT. KOKILABEN MAFATLAL SHAH VS. DCIT 2 WITHOUT FINDING ANY MISTAKE IN BOOKS OF ACCOUNT WHA TSOEVER. IT IS SUBMITTED THAT THE BOOKS RESULT BE ACCEPTED AND THE ADDITION MADE OF RS.13,50,927/- BE DELETED. 2. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS,13,50,927/- BY TAKING AVERAGE NET PROFIT FOR 3 Y EARS AND REJECTING BOOKS OF ACCOUNT OF ASSESSE U/S 145(3) OF THE ACT EVEN THOUGH THE BOOKS OF ACCO UNT OF APPELLANT ARE AUDITED AND FULLY EXAMINED AND VERIFIED AND NO INCORRECTNESS OR MISTA KE WERE FOUND THE ADDITION HAVE BEEN INCORRECTLY CONFIRMED. IT IS SUBMITTED THAT THE SAM E BE DELETED NOW. 3. THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS. IT IS SUBMITTED THAT THE SAME BE HEL D SO NOW. 3. THE FACT IN BRIEF IS THAT RETURN OF INCOME DECLA RING INCOME OF RS. 24,45,520/- WAS FILED ON 28 TH SEP, 2012. THE CASE WAS SUBJECT TO SCRUTINY ASSESSMENT AND NOTICE U/S. 143(2) OF THE ACT WAS IS SUED ON 23 RD SEP, 2013. DURING THE COURSE OF ASSESSMENT, THE ASSESSING OFFI CER NOTICED THAT ASSESSEE HAS DEBITED TRANSPORTATION EXPENSES TO THE AMOUNT O F RS. 7,29,39,608/-. TO VERIFY THE SAME, ASSESSEE HAS ISSUED NOTICES U/S. 1 33(6) OF THE ACT TO THE 10 SUNDRY CREDITORS. IN RESPONSE TO THE LETTER ISSUED U/S. 133(6) THREE PARTIES HAVE MADE COMPLIANCE BY FURNISHING THE REQUIRED DET AIL. IN RESPECT OF THE REMAINING SEVEN WHO HAVE NOT MADE COMPLIANCE TO THE LETTER ISSUED U/S. 133(6), THE ASSESSING OFFICER HAS ISSUED SUMMON U/S . 131 OF THE ACT. HOWEVER THE TWO PARTIES NAMELY PRIYANKA EXPORT AND SANJAY R. DHAITIDIK HAVE NOT MADE COMPLIANCE WITH THE SUMMON ISSUED U/S . 131. CONSEQUENTLY, THE ASSESSING OFFICER TREATED THE PURCHASES MADE FR OM THESE PARTIES AS BOGUS PURCHASES AND ESTIMATED THE NET PROFIT ON THE BASIS OF AVERAGE NET PROFIT SHOWN IN THE LAST THREE ASSESSMENT YEARS AT 5.03% B Y REJECTING THE BOOKS OF ACCOUNT. ACCORDINGLY, THE ASSESSING OFFICER HAS MA DE AN ADDITION OF RS. 13,50,927/- TO THE TOTAL INCOME OF THE ASSESSEE. 4. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE L D. CIT(A). THE LD. CIT(A) SUSTAINED THE ADDITION STATING THAT TWO CRE DITORS MS. PRIYANKA I.T.A NO. 293/AHD/2019 A.Y. 2012-13 PAGE NO SMT. KOKILABEN MAFATLAL SHAH VS. DCIT 3 TRANSPORT RS. 17,11,004/ AND MR. SANJAY R. DHAITIDI K RS. 5,44,940/- REMAINED UNVERIFIED. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E US, THE LD. COUNSEL CONTENDED THAT ASSESSEE HAS FURNISHED THE FULL DETA ILS OF TRANSACTIONS ALONG WITH PAN NO. OFFICE ADDRESSES, COPIES OF LEDGER ACC OUNTS AND THE DETAIL OF REPAYMENT MADE THROUGH BANKING CHANNEL BEFORE THE A SSESSING OFFICER AND THE LD. CIT(A) IN SUPPORT OF HER CLAIM. THE LD. CO UNSEL HAS REFERRED PAGE NO. 55 OF THE PAPER BOOK PERTAINING TO DETAILED INFORMA TION FILED BY THE ASSESSEE ON 27 TH JANUARY, 2015 DURING THE COURSE OF ASSESSMENT PROC EEDINGS BEFORE THE ASSESSING OFFICER ALONG WITH COPY OF LEDGER ACC OUNTS AND COPY OF BANK STATEMENTS IN SUPPORT OF TRANSPORTATION EXPENSES RE LATED TO THE ABOVE REFERRED TWO PARTIES. THE LD. COUNSEL VEHEMENTLY CONTENDING THAT WITHOUT CONSIDERING THE DETAILS AND EVIDENCES FILED BY THE ASSESSEE, THE LD. CIT(A) HAS IMPROPERLY SUSTAINED THE ADDITIONS WITHOUT ANY FAULT OF THE ASSESSEE. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE HAS SUPPORTED THE ORDER OF LOWER AUTHORITIES STATING THAT ASSESSING OFFICER CO ULD NOT VERIFY THE GENUINENESS OF EXPENSES IN RESPECT OF TWO PARTIES O N ACCOUNT OF NON- COMPLIANCE TO THE SUMMONS. 6. HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS IN THE BUSINESS OF TRANSPORT CONTRACTOR IN THE N AME SHRI MAHAVIR TRANSPORT COMPANY. DURING THE YEAR, THE ASSESSEE HAD INCURRE D TRANSPORT EXPENSES OF RS. 7,29,39,608/-. DURING THE COURSE OF ASSESSMENT , THE ASSESSING OFFICER HAS VERIFIED THE TRANSACTION PERTAINING TO TRANSPOR TATION EXPENSES IN RESPECT OF TEN PARTIES OUT OF A NUMBER OF PARTIES UNDER THE HEAD TRANSPORTATION I.T.A NO. 293/AHD/2019 A.Y. 2012-13 PAGE NO SMT. KOKILABEN MAFATLAL SHAH VS. DCIT 4 EXPENSES. HOWEVER, TWO OF THE PARTIES NAMELY PRIY ANKA TRANSPORT AND SANJAY R DHAITIDIK HAVE NOT RESPONDED TO THE LETTER ISSUED U/S. 133(6) OF THE ACT AND SUMMON ISSUED U/S. 131 OF THE ACT. DURING THE COURSE OF ASSESSMENT, THE ASSESSEE HAD SUBMITTED THE ADDRESSE S, CONTACT DETAIL, PAN NO. AND COPIES OF THE INVOICES ISSUED BY THESE PART IES. THE ASSESSEE HAS ALSO SUBMITTED THE COPIES OF LEDGER ACCOUNTS OF CUR RENT YEAR AND THE SUBSEQUENT YEAR. THE ASSESSEE HAS ALSO SUBMITTED T HE EMAILS AND ALSO THE PROOF OF SENDING MAILS TO THESE PARTIES TO MAKE COM PLIANCE WITH THE NOTICES ISSUED BY THE ASSESSING OFFICER. DURING THE COURSE OF ASSESSMENT, THE ASSESSEE HAS ALSO SUBMITTED THE COMPLETE ASSESSMENT DETAIL, PAN NO AND THE BANK STATEMENT SHOWING THE PAYMENT MADE TO PRIYANKA TRANSPORT AND SANJAY R. DHAITIDIK FOR F.Y. 2011-12 AND F.Y. 2012- 13. THE ASSESSING OFFICER HAS TREATED THE TRANSPORTATION EXPENSES PER TAINING TO THESE PARTIES AS BOGUS ONLY ON THE BASIS OF NON-COMPLIANCE MADE BY T HESE PARTIES TO THE SUMMON ISSUED BY THE ASSESSING OFFICER U/S. 131 OF THE ACT. IT IS UNDISPUTED FACT THAT AS PER THE MATERIAL ON RECORD THESE TWO PARTIES WERE EXISTED AT THE GIVEN ADDRESSES. IN THIS REGARD, IT IS OBSERVED THAT ASSESSING OFFICER HAS NEITHER TAKEN ANY STEPS TO ENFORCE THE ATTENDANCE OF THESE PARTIES IN VIEW OF NON-COMPLIANCE OF THE SUMMONS NOR MADE A NY FURTHER INVESTIGATION ON THE BASIS OF BANK ACCOUNT SHOWING THE PAYMENT MADE BY THE ASSESSEE TO THESE TWO PARTIES AND ALSO NOT ASKED AN Y DETAIL FROM THE ASSESSEE PERTAINING TO THE PARTICULARS OF TRUCKS DEPLOYED FO R TRANSPORTATION BY THESE TWO PARTIES. IT IS FURTHER OBSERVED THAT ASSESSING OFFICER HAS NOT TAKEN ANY ACTION U/S. 271A(1)(C) OF THE ACT AS PER WHICH IF A NY PERSON TO WHOM SUMMON IS ISSUED U/S. 131(1) EITHER TO ATTEND TO GI VE EVIDENCE OR PRODUCE BOOKS OF ACCOUNT OR OTHER DOCUMENTS AT A CERTAIN PL ACE AND TIME, OMIT TO I.T.A NO. 293/AHD/2019 A.Y. 2012-13 PAGE NO SMT. KOKILABEN MAFATLAL SHAH VS. DCIT 5 COMPLY, HE CAN BE PENALIZED U/S. 272A(1)(C) OF THE ACT. LOOKING TO THE ABOVE FACTS AND CIRCUMSTANCES, WE CONSIDER THAT THE ASSESSING OFFICER HAS NEITHER INITIATED ANY PROCEEDINGS TO ENFORCE THE AT TENDANCE OF THEE TWO PARTIES IN COMPLIANCE TO THE SUMMON ISSUED NOR CONT RADICTING THE OTHER EVIDENCES I.E. COPY OF BANK ACCOUNT, INVOICES ETC., THEREFORE, THE DECISION OF THE LD. CIT(A) TO SUSTAIN THE IMPUGNED ADDITION IS NOT JUSTIFIED. THEREFORE, THIS APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16-07-2021 SD/- SD/- (MADHUMITA ROY) (AMARJIT SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 16/07/2021 / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,