M/s. Rinki Petrochem Pvt.Ltd., Baroda V. The Dy.CIT.,Circle-4, Baroda

ITA 325/AHD/2009

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85865 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 1 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 13-03-2015
• Assessment Year: 1988-1989
• Appeal Filed On: 02-02-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: J P SHAH
• Keywords: Bogus purchase; Depreciation

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBE R AND SHRI N.S. SAINI, ACCOUNTANT MEMBER 1. ./ I.T.A. NO.3447/AHD/1995 A.Y. 1991-92 2. ./ I.T.A. NO.325/AHD/2009 A.Y. 1988-89 RINKI PETROCHEM PVT.LTD. MOTOROL HOUSE NR.BOMBAY SHOPPING CENTRE R.C.ROAD, BARODA-390 007 / VS. THE ACIT CIRCLE-3 BARODA/ THE DCIT,CIRCLE-4, BARODA ./ ./ PAN/GIR NO. : 31-044-CZ-6122 ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI J.P.SHAH, A.R. / RESPONDENT BY : SHRI B.L.YADAV, SR.DR / DATE OF HEARING 13/03/2015 '# / DATE OF PRONOUNCEMENT 27/03/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JM : BOTH THESE APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE SEPARATE ORDERS OF THE LD.CIT(A)-IV/III, BARODA DAT ED 21/3/1995 AND DATED 04/11/2008 FOR ASSESSMENT YEARS 1991-92 & 198 8-99 RESPECTIVELY. 2. ASSESSEES APPEAL IN ITA NO.3447AHD/1995 FOR AY 1991-92 IS ARISING OUT OF THE RECALLED MATTER AND THE ONLY ISS UE WHICH READS AS UNDER:- ITA NO.3447/AHD/1995 AY 1991-92 AND ITA NO.325/AHD/2009 AY 1988-99 RINKI PETROCHEM PVT.LTD. VS. CIT - 2 - 4. BOGUS PURCHASES:- 4.1. THE LEARNED CIT(APPEALS) HAS ERRED IN LAW AND FACTS IN CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFI CER IN TREATING THE PURCHASES OF USED TRANSFORMER OIL AMOUNTING TO RS.23,11,500 MADE BY YOUR APPELLANT FROM SEJAL SALES AS BOGUS. 2.1. THE ASSESSING OFFICER MADE AN ADDITION OF RS.2 3,11,500/- BEING BOGUS PURCHASES FROM M/S.SEJAL SALES AS PER PARA-9 OF THE ASSESSMENT ORDER. THE FACTS OF THE CASE ARE THAT THE ASSESSIN G OFFICER CONDUCTED ENQUIRIES ON THE ADDRESS OF M/S.SEJAL SALES, PROVID ED BY THE ASSESSEE BUT NO SUCH CONCERN WAS FOUND AT THE ABOVE ADDRESS. TH E ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE THE PARTY ALONG WI TH THE BOOKS OF ACCOUNTS, PURCHASE BILL, SALES BILLS, ETC. AND A SH OW CAUSE NOTICE WAS ISSUED BY THE ASSESSING OFFICER. AFTER THE SHOW CA USE NOTICE, THE ASSESSEE PROVIDED ANOTHER ADDRESS TO THE ASSESSING OFFICER REGARDING THE ABOVE CONCERN M/S.SEJAL SALES. FURTHER ENQUIRIES W ERE CONDUCTED BY THE ASSESSING OFFICER ON THE SECOND ADDRESS PROVIDED BY THE ASSESSEE, AND IT WAS FOUND THAT EVEN THE ABOVE ADDRESS WAS BOGUS, AN D NO SUCH CONCERN EXISTED ON SAID ADDRESS. ACCORDINGLY, ANOTHER SHOW -CAUSE NOTICE WAS ISSUED TO THE ASSESSEE. THE ASSESSEE CONTENDED BEF ORE THE ASSESSING OFFICER THAT M/S.SEJAL SALES HAS ALREADY FURNISHED THE CONFIRMATION REGARDING THE TRANSACTIONS AND THUS, THE ASSESSEE H AS ALREADY DISCHARGED ITS ONUS. THE ASSESSING OFFICER TREATED THE PURCH ASES FROM M/S.SEJAL SALES AS BOGUS AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. AS PER DISCUSSION IN PARA-9 OF THE ASSESSMENT ORDER, THE A SSESSING OFFICER FURTHER OBSERVED THAT MANY OF THE TANKERS WHICH TRA NSPORTED THE SUPPOSED PURCHASES OF GOODS FROM M/S.SEJAL SALES, HAD UNDERT AKEN AT LEAST 3 TRIPS ITA NO.3447/AHD/1995 AY 1991-92 AND ITA NO.325/AHD/2009 AY 1988-99 RINKI PETROCHEM PVT.LTD. VS. CIT - 3 - IN A SINGLE DAY, WHICH WERE NOT POSSIBLE. NO TRANS PORTATION CHARGE WERE PAID BY THE ASSESSEE AND NO TRANSPORT VOUCHERS OR L .R. WERE PRODUCED BEFORE HIM TO IDENTIFY THE TRANSPORTER. ACCORDINGL Y, THE ASSESSING OFFICER MADE AN ADDITION OF RS.23,11,500/- BEING B OGUS PURCHASES FROM M/S.SEJAL SALES. MATTER WAS CARRIED BEFORE THE FIR ST APPELLATE AUTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED IN THIS REG ARD AND HAVING CONSIDERING THE SAME, THE LD.CIT(A) CONFIRMED THE O RDER OF THE ASSESSING OFFICER. 2.2. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE POINTED OUT THAT A SIMILAR ISSUE AROSE IN ASSESSEES OWN CASE FOR AY 1988-89 I N ITA NO.505/AHD/1993, WHEREIN THE TRIBUNAL (ITAT B BE NCH AHMEDABAD) VIDE PARA-6.1. OF ITS ORDER DATED 20/06/2008, HELD AS UNDER:- 6. SO FAR AS ISSUE RELATES TO ADDITION ON ACCOU NT OF BOGUS PURCHASES INVOLVED IN GROUND NO.3 IS CONCERNED, THE CIT(APPEALS) HAS SET ASIDE THE SAME FOR RE-CONSIDERATION AT THE END OF THE ASSESSING OFFICER AS PER HIS FINDINGS CONTAINED AT PAGE NOS.14, 15 & 16 OF THE APPELLATE ORDER, BUT SINCE THE PARTIES AT THE END HAD AGREED FOR SUSTENANCE OF AN ADDITION OF TO THE EXTE NT OF 25% OF SUCH PURCHASES, WE DIRECT THE ASSESSING OFFICER TO COMPUTE THE ADDITION @ 25% OF SUCH BOGUS PURCHASES. 2.3. FACTS BEING SIMILAR, SO WITHOUT PREJUDICE TO M ERIT OF ISSUE, FOLLOWING THE SAME REASONING, WE DIRECT THE ASSESSI NG OFFICER TO COMPUTE THE ADDITION @25% OF SUCH BOGUS PURCHASES. IT IS PERTINENT TO MENTION HERE THAT EACH CASE IS DECIDED IN ITS FACTS AND CIRCUMSTANCES. ITA NO.3447/AHD/1995 AY 1991-92 AND ITA NO.325/AHD/2009 AY 1988-99 RINKI PETROCHEM PVT.LTD. VS. CIT - 4 - 3. AS A RESULT, APPEAL OF THE ASSESSEE, I.E. ITA NO.3447/AHD/1995 FOR AY 1991-92 IS PARTLY ALLOWED. 4. NOW, WE TAKE UP ASSESSEES APPEAL IN ITA NO.325/ AHD/2009 FOR AY 1988-89, WHEREIN THE ASSESSEE HAS RAISED THE FOL LOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY U/S.271(1)(C) PARTLY. THE CIT(A) HAS FAILED APPRECIATE THE FACTS OF THE C ASE AND ALSO FAILED TO APPRECIATE THE EXPLANATIONS AND INFORMATI ON FURNISHED, TO THE LEARNED A.O. CONSEQUENTLY ARRIVING WRONGLY AT C ONCLUSION THAT INACCURATE PARTICULARS OF INCOME WERE FURNISHED. T HERE IS NO CONCEALMENT OF ANY INCOME. YOUR APPELLANT THEREFORE PRAYS THAT THE PENALTY LEV IED BY THE A.O. BE DELETED IN THE INTEREST OF JUSTICE. YOUR APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AM END TO SUBSTITUTE OR TO MODIFY ALL ARE ANY OF THE GROUNDS OF APPEAL. 4.1. THE ASSESSING OFFICER MADE VARIOUS ADDITIONS I N ASSESSEES CASE, AMONG ONE OF THEM WAS ADDITION ON ACCOUNT OF DISALL OWANCE OF DEPRECIATION OF RS.3,06,800/-. THE ITAT CONFIRMED THIS ADDITION SINCE THE ASSESSEE WAS NOT ABLE TO PROVE THAT EQUIPMENTS WERE ACTUALLY PURCHASED FROM M/S. TOSHNIWAL INSTRUMENTS ON WHICH DEPRECIATION WAS CLAIMED. IN ABSENCE OF ANY EVIDENCE, IN SECOND APP EAL, THE ITAT HELD THAT THE CLAIM OF DEPRECIATION ON RESEARCH EQUIPMEN TS AMOUNTING TO ITA NO.3447/AHD/1995 AY 1991-92 AND ITA NO.325/AHD/2009 AY 1988-99 RINKI PETROCHEM PVT.LTD. VS. CIT - 5 - RS.3,06,800/- IS WITHOUT ANY BASIS. CONSIDERING THIS ADDITION INVOLVED FURNISHING OF INACCURATE PARTICULARS OF INCOME AND PENALTY WAS LEVIED BY THE ASSESSING OFFICER WHICH WAS UPHELD BY THE CIT(A ). SAME HAS BEEN OPPOSED BEFORE US. THE LEARNED COUNSEL ON BEHALF O F THE ASSESSEE BEFORE US CONTENDED THAT THE CIT(A) WAS NOT JUSTIFIED IN C ONFIRMING THE PENALTY U/S.271(1)(C) OF THE ACT. ON THE OTHER HAND, THE LD .SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW WITH REGARD TO PENA LTY U/S.271(1)(C) OF THE ACT. 4.2. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND HAVING GONE THROUGH THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT THE PENALTY IN QUESTION IS ARISING FROM DISALLOWANCE OF DEPRECIATION OF RS.3,0 6,800/- WHICH HAS BEEN CONFIRMED BY ITAT, AHMEDABAD IN SECOND APPEAL BY OBSERVING THAT THE ASSESSEE WAS NOT ABLE TO ESTABLISH THAT EQUIPME NTS IN QUESTION WERE ACTUALLY PURCHASED FROM M/S.TOSHNIWAL INSTRUMENTS O N WHICH DEPRECIATION WAS CLAIMED. THE TRIBUNAL FURTHER HEL D THAT CLAIM OF DEPRECIATION ON RESEARCH EQUIPMENTS AMOUNTING TO RS .3,06,800/- IS WITHOUT ANY BASIS. IN VIEW OF ABOVE ADDITION INVOL VED FURNISHING OF INACCURATE PARTICULARS OF INCOME, THE ASSESSING OFF ICER WAS JUSTIFIED IN LEVYING THE PENALTY AND THE SAME HAS BEEN RIGHTLY B EEN UPHELD BY THE CIT(A). THEREFORE, WE UPHOLD THIS REASON FACTUAL A ND LEGAL FINDING OF CIT(A). 4.3. AS A RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.325/AHD/2009 FOR AY 1988-89 IS DISMISSED. ITA NO.3447/AHD/1995 AY 1991-92 AND ITA NO.325/AHD/2009 AY 1988-99 RINKI PETROCHEM PVT.LTD. VS. CIT - 6 - 5. IN THE RESULT, THE APPEAL OF THE ASSESSE E IN ITA NO.3447/AHD/1995 FOR AY 1991-92 IS PARTLY ALLOWED, WHEREAS APPEAL OF THE ASSESSEE IN ITA NO.325/AHD/2009 FOR AY 1988-89 IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 27/3/15 AT AHM EDABAD. SD/- SD/- ( N.S. SAINI ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 27/ 03 /2015 &.., .(../ T.C. NAIR, SR. PS !'!# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-III/IV, BARODA 5. /01 ((*+ , *+# , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 13.3.15 (DICTATION-PAD 10- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.3.15/24.3.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.27.3.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 27.3.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER