KASHI IMPEX, MUMBAI V. ITO WD 32(2)(2), MUMBAI

ITA 32/MUM/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0356 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 03-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T A KHAN
• Keywords: Bogus purchase; Unexplained expenditure; Opportunity of cross examination
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH SMC, MUMBAI BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER ITA NO.32/M/2017 ASSESSMENT YEAR: 2007-08 M/S. KASHI IMPEX, A-403, CHANDRA APARTMENTS, MANDPESHWAR ROAD, BORIVALI WEST, MUMBAI 400 103 PAN: AAHFK 9137B VS. ITO WARD 32(2)(2), BANDRA KURLA COMPLEX, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI PRITESH MEHTA, A.R. REVENUE BY : SHRI T.A. KHAN, D.R. DATE OF HEARING : 12.06.2017 DATE OF PRONOUNCEMENT : 15.06.2017 O R D E R PER D.T. GARASIA, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSES SEE AGAINST THE ORDER DATED 21.11.2016 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2007-08. 2. THE ONLY EFFECTIVE GROUND IS GROUND NO.1 IN RELA TION TO ADDITION OF RS.2,30,313/- AS UNEXPLAINED EXPENDITURE UNDER SECT ION 69. THE SHORT FACTS OF THE CASE ARE AS UNDER: THE ASSESSEE IS ENGAGED IN BUSINESS OF IMPORT AND EXPORT AND MANUFACTURING OF CUT AND POLISHED DIAMOND. THE ASS ESSEE HAS FILED THE RETURN FOR A.Y. 2007-08. THE RETURN INCOME WAS RS.10,178/ -. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ADDITION OF RS.10,03,860/- WAS MADE UNDER SECTION 69C AS UNEXPLAINED EXPENDITURE ON ACCOUNT OF ALLEGE D BOGUS PURCHASES FROM SUN DIAM, GROUP CONCERN OF SHRI RAJENDRA JAIN. THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) HAS ALSO MADE A DDITION OF RS.8,38,647/- ON ITA NO.32/M/2017 M/S. KASHI IMPEX 2 ACCOUNT OF ALLEGED BOGUS PURCHASES FROM AADI IMPEX ALLEGED GROUP OF SHRI RAJENDRA JAIN. THE ASSESSEE HAS FILED ALL DETAILS IN RESPECT OF AFORESAID ADDITION INCLUDING COPIES OF INVOICES, RELEVANT BANK STATEME NTS, LEDGER OF RELEVANT PARTIES, THEIR ADDRESSES AND PAN NUMBER. HOWEVER, THE ADDITION WAS MADE UNDER SECTION 69C OF THE ACT. 3. THE MATTER TRAVELLED TO LD. CIT(A) AND THE LD. C IT(A) HAS APPLIED GP @ 12.5%. THE ASSESSEE IS IN APPEAL BEFORE THE ITAT . 4. I HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE P ARTIES. THE ASSESSEE HAS SUBMITTED THAT THE AO AND LD. CIT(A) HAVE NOT GIVEN OPPORTUNITY OF CROSS EXAMINING SHRI RAJENDRA JAIN FOR ALLEGED STATEMENT. THE ADDITION HAS BEEN MADE ON THE BASIS OF STATEMENT MADE BY ONE SHRI RAJ ENDRA JAIN. THEREFORE, OPPORTUNITY OF CROSS EXAMINATION MAY BE GIVEN AND S ECONDLY, THE LD. A.R. SUBMITTED THAT ASSESSEE HAS MADE PURCHASES FROM AAA DI IMPEX WHO IS NOT RELATED TO SHRI RAJENDRA JAIN, HENCE NO ADDITION SH OULD HAVE BEEN MADE. 5. IN REBUTTAL, THE LD. D.R. SUBMITTED THAT IN RESP ECT OF PURCHASE OF RS.10,03,860/- FROM SHRI RAJENDRA JAIN, THE ASSESSE E HAS ADMITTED THE SAME. 6. HAVING HEARD BOTH THE PARTIES, I AM OF THE VIEW THAT IN RESPECT OF PURCHASES FROM AAADI IMPEX, THE ASSESSEE HAS NOT SU BMITTED ANY CONVINCING EVIDENCE. THEREFORE, I AM OF THE OPINION THAT WHEN THE ASSESSEE DID NOT PRODUCE THE PARTY, THE ASSESSEE HAS TAKEN A VIEW TH AT SUPPLIER DID NOT RESPOND TO NOTICE UNDER SECTION 133(6). SINCE THE SUPPLIER WAS NOT PRODUCED BEFORE THE AO AND THE ASSESSEE IS A TRADER, THE LD. CIT(A) HAS TAKEN A VIEW THAT IN CASE OF TRADER, IF THERE IS NO PURCHASE OF MATERIAL THEN TH ERE CANNOT BE ANY SALES ALSO. THEREFORE, IN RESPECT OF PURCHASE OF RS.8,38,647/-, THE LD. CIT(A) HAS APPLIED GP OF 12.5% IS JUSTIFIED. THEREFORE, THE APPEAL FI LED BY THE ASSESSEE IN RESPECT OF AAADI IMPEX IS DISMISSED. ITA NO.32/M/2017 M/S. KASHI IMPEX 3 7. IN RESPECT OF ADDITION OF RS.10,03,860/-, THE AO HAS NOT GIVEN THE COPY OF THE ALLEGED STATEMENT AND THE ASSESSEE WAS NOT G IVEN OPPORTUNITY TO CROSS EXAMINE SHRI RAJENDRA JAIN. THEREFORE, I RESTORE T HIS ISSUE BACK TO THE FILE OF THE AO TO DECIDE IT AFRESH. THE AO IS DIRECTED TO GIVE THE COPY OF THE STATEMENT AND IF NECESSARY THE CROSS EXAMINATION MU ST BE GIVEN TO THE ASSESSEE. 8. IN THE RESULT, APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 15.06.2017. SD/- (D.T. GARASIA) JUDICIAL MEMB ER MUMBAI, DATED: 15.06.2017. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.