Appeal details
Counselvise Citation
[2015] 134 COUNSELVISE.COM (IT) 2321 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 6 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-11-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2010-2011
Appeal Filed On
06-05-2014
Judgement Text
, THE INCOME-TAX APPELLATE TRIBUNAL -ABENCH MUMB AI , , BEFORE SH.RAJENDRA,ACCOUNTANT MEMBER AND M S.BEENA PILLAI,JUDICIAL MEMBER /ITA NO.3202/MUM/2014, /ASSESSMENT YEAR 2010-11 KAVIS FASHIONS PVT. LTD. 34, NEW HEAVEN BUILDING, SAKI VIHAR ROAD, SAKI NAKA, ANDHERI(E) MUMBAI-400 072. PAN: AAACK 9496 R VS. DY. CIT-9(2) AAYAKAR BHAVAN MAHARSHI KARVE ROAD MUMBAI. ( / APPELLANT ) ( / RESPONDENT ) / ASSESSEE BY : SHRI SUBHAS KUMAR KEDIA / REVENUE BY : SHRI SUJIT BANGAR / DATE OF HEARING :29.10. 2015 / DATE OF PRONOUNCEMENT :29 .10 . 2015 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, A.M. CHALLENGING THE ORDER,DATED 07.02.2014,OF THE CIT(A )-20,MUMBAI, THE ASSESSEE HAS FILED THE PRESENT APPEAL. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF MANUFAC TURING AND EXPORTING OF LEATHER FOOTWEAR,FILED ITS RETURN OF INCOME ON 30.9.2010 DE CLARING INCOME OF RS.2.85 CRORES.THE ASSESSING OFFICER(AO),COMPLETED THE ASSESSMENT,U/S. 143 OF THE ACT, ON 11.2.2013 DETERMI -NING THE INCOME OF THE ASSESSEE AT RS. 3,00,01,130 /-. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT RS.13.48 LACS O N ACCOUNT OF PURCHASE OF RAW MATERIAL. DURING THE ASSESSMENT PROCEEDINGS,THE AO RECEIVED I NFORMATION FROM SALES TAX DEPARTMENT. REGARDING BOGUS BILLS.HE FOUND THAT ONE OF THE BOGU S BILLER,NAMELY ROHIT ENTERPRISES (RE), HAD SHOWN SALES TO THE ASSESSEE TO THE TUNE OF RS.1 3,48,763/-.HE DIRECTED IT TO FURNISH DETAILS OF THE TRANSACTION ENTERED INTO WITH RE.AFTER CONSI DERING THE SUBMISSION OF THE ASSESSEE, THE AO HELD THAT THE IT HAD NOT PRODUCED THE PARTY NOR HAD IT FILED THE REQUIRED DETAILS, THAT THE ONUS OF PROVING THE GENUINENESS OF TRANSACTION WAS ON THE ASSESSEE,THAT IT HAD FAILED TO DISCHARGE THE BURDEN OF PROOF CAST UPON IT,.TREATIN G THE AMOUNT IN DISPUTE AS BOGUS,THE AO ADDED IT BACK TO THE TOTAL INCOME OF THE ASSESSEE. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE FILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHOIRTY(FAA).BEFORE HIM,IT WAS STATED THAT RE HAD REGISTERED ITSELF WITH SALES TAX DEPART - MENT,THAT IT HAD A VALID TIN NUMBER ISSUED BY THE S ALES TAX DEPARTMENT,THAT THE AO HAD NOT GIVEN ANY EVIDENCE TO PROVE THAT RE WAS ISSUING BOG US BILLS,THAT THE AO HAD ACCEPTED THE BOOKS OF ACCOUNTS AS WELL AS THE SALES AND CLOSING STOCK,THAT THE PAYMENT WAS MADE THROUGH ACCOUNT PAYEE CHEQUES,THAT THE RECORDS MAINTAINED B Y THE AA WERE DESTROYED BY A MAJOR FIRE THAT TOOK PLACE AT THE PREMISES OF THE AA ON 6.3.12 ,THAT A COPY OF FIR MADE TO THE POLICE AND COPY OF REPORT OF THE MUMBAI FIRE BRIGADE DEPARTMEN T WAS MADE AVAILABLE TO THE AO,THAT THE AO HAD NOT ESTABLISHED ON RECORD THAT PURCHASE MADE FROM RE WERE BOGUS,THAT HE HAD SIMPLY RELIED ON THE INFORMATION RECD FROM SALES TA X DEPARTMENT.IT FURNISHED A COPY OF LEDGER ACCOUNT OF RE AND BANK STATEMENT TO SHOW THA T CORRESPONDING PAYMENTS WERE MADE AGAINST THE PURCHASES. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE AN D THE ASSESSMENT ORDER, THE FAA HELD THAT IT HAD FAILED TO ESTABLISH THE GENUINENESS OF THE PURCHASE TO THE EXTENT OF RS.13.48 LACS THAT WERE CLAIMED TO BE PURCHASED FROM RE,THAT IT H AD NOT PRODUCED THE PARTY OR THE BOOKS OF ACCOUNT,THAT THE INFORMATION FROM THE SALES TAX DEPARTMENT PROVED THAT RE WAS A BOGUS BILLER,THAT THE ASSESSEE HAD OBTAINED BOGUS BILLS E ITHER TO INFLATE THE EXPENDITURE AND ITA NO.3202/M/14 KAVIS FASHION 2 2 SUPPRESS THE TAXABLE INCOME OR HAD PURCHASED GOODS AT BLACK MARKETS,THAT FROM ANY ANGLE THE AO WAS JUSTIFIED IN MAKING THE ADDITION,THAT TH E BANK STATEMENT WAS OF NO USE TO PROVE THE GENUINENESS OF THE TRANSACTION.FINALLY,HE UPHEL D THE ORDER OF THE AO. 4 .BEFORE US,THE AUTHRORISED REPRESENTATIVE(AR)CONTEN DED THAT, THE AO HAD ACCEPTED THE SALES,THAT THE ASSESSEE HAD PURCHASED GOODS OF RS. 13.48 LACS ONLY FROM RE,THAT IT COULD NOT PRODUCE THE RECORDS BECAUSE OF THE FIRE THAT TOOK P LACE AT THE FACTORY PREMISES,THAT THERE WAS NO EVIDENCE THAT CASH WAS RECEIVED BACK FROM RE.HE RELIED UPON THE CASE OF RAJEEV G. KALATIL(ITA/6727.MUM/2012)AY.2009-10 DTD,20.08.2014 .DEPARTMENTAL REPRESENTATIVE (DR)SUPPORTED THE ORDER OF THE FAA. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT RE WAS A REGISTERED ENTITY WITH THE SALES TAX DEPARTME NT,THAT THE AO HAD MADE THE ADDITION BECAUSE THE NAME OF RE WAS APPEARING IN THE LIST PR EPARED BY THE SALES DEPARTMENT, WHO WERE CONSIDERED TO BE BOGUS BILL PROVIDERS,THAT THE AO/FAA HAD NOT REVEALED THE EXACT INFORMATION WHICH LED THEM TO THE CONCLUSION THAT R E HAD ISSUED BOGUS BILL TO THE ASSESSEE. ISSUING BOGUS BILLS IN GENERAL AND ISSUING BOGUS BI LLS TO A PARTICULAR ASSESSEE ARE TWO DIFFERENT SITUATIONS.WE DO NOT FIND ANY EVIDENCE TH AT RE WAS EXAMINED BY AO/FAA.ON THE OTHER HAND THE ASSESSEE HAD PRODUCED THE BANK ACCOU NT AND DETAILS OF PAYMENT MADE TO RE. IT IS NOT DENIED BY BOTH THE AUTHORITIES THAT PAYME NTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES.IN THESE CIRCUMSTANCES,THEY SHOULD HAVE CON DUCTED FURTHER ENQUIRES.BUT THEY STOPPED AT THE THRESHOLD ONLY AND JUST RELIED UPON THE INFORMATION APPEARING ON THE WEBSITE OF THE SALES TAX DEPARTMENT.THE INFORMATION IN ITSE LF WAS A GOOD STARTING POINT,BUT IT REQUIRED FURTHER INVESTIGATION.WE FIND THAT IN SIMILAR CIRCU MSTANCES IN THE CASE OF RAJEEV G KALITAL (SUPRA) THE TRIBUNAL HAS HELD AS UNDER :- 2.4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT AO HAD MADE THE ADDITION AS ONE OF THE SUPPLIER WAS DECLARED A HAWALA DEALER BY THE VAT DEPARTMENT. WE AGREE THAT IT WAS A GOOD STARTING POINT FOR MAKING FURTHER INVEST IGATION AND TAKE IT TO LOGICAL END.BUT,HE LEFT THE JOB AT INITIAL POINT ITSELF.SUSPICION OF HIGHEST DEGREE CA NNOT TAKE PLACE OF EVIDENCE.HE COULD HAVE CALLED FO R THE DETAILS OF THE BANK ACCOUNTS OF THE SUPPLIERS TO FI ND OUT AS WHETHER THERE WAS ANY IMMEDIATE CASH WITHDRAWAL FROM THEIR ACCOUNT.WE FIND THAT NO SUCH EXERCISE WAS DONE.TRANSPORTATION OF GOOD TO THE SIT E IS ONE OF THE DECIDING FACTOR TO BE CONSIDERED FOR RES OLVING THE ISSUE.THE FAA HAS GIVEN A FINDING OF FAC T THAT PART OF THE GOODS RECEIVED BY THE ASSESSEE WAS FORM ING PART OF CLOSING STOCK.AS FAR AS THE CASE OF WES TERN EXTRUSION INDUSTRIES. (SUPRA)IS CONCERNED,WE FIND T HAT IN THAT MATTER CASH WAS IMMEDIATELY WITHDRAWN B Y THE SUPPLIER AND THERE WAS NO EVIDENCE OF MOVEMENT OF GOODS.BUT,IN THE CASE BEFORE US,THERE IS NOTHING ,IN THE ORDER OF THE AO,ABOUT THE CASH TRAIAL.SECONDLY, PROOF OF MOVEMENT OF GOODS IS NOT IN DOUBT. THERERFORE,CONSIDERING THE PECULIAR FACTS AND CIRCU MSTANCES OF THE CASE UNDER APPEAL,WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER F ROM ANY LEGAL INFIRMITY AND THERE ARE NOT SUFFICIEN T EVIDENCE ON FILE TO ENDORSE THE VIEW TAKEN BY THE A O.SO,CONFIRMING THE ORDER OF THE FAA,WE DECIDE GROU ND NO.1 AGAINST THE AO. FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL,WE DEC IDE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESS AND REVERSE THE ORDER OF THE FAA. AS A RESULT APPEAL FILED BY THE ASSESSEE STANDS ALL OWED. . ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH ,OCTOBER, 2015. 29 ,2015 SD/- SD/- ( / BEENA PILLAI ) ( / RAJENDRA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER ITA NO.3202/M/14 KAVIS FASHION 3 3 MUMBAI, ! DATE:29.10.2015 . . . JV.SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR K BENCH, ITAT, MUMBAI / , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.
