The ITO, Ward-5(1), Surat V. Shri Ashish Shantilal Kakdia, Surat

ITA 343/AHD/2009

• Counselvise Citation: 34320514 RSA 2009
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 14-12-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 02-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: M K PATEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE SHRI BHAVNESH SAINI, JM AND SHRI A. MOHAN A LANKAMONY, AM) ITA NO. 343/AHD/2009 A. Y.: 2003-04 THE INCOME TAX OFFICER, WARD 5(1), SURAT ROOM NO.313. 3 RD FLOOR, AAYAKAR BHAVAN, MAJURA GATE, SURAT VS SHRI ASHISH SHANTILAL KAKDIA, PROP. PAL IMPEX, 5/B NARAYANKRUPA FLATS, GAJJAR SHERI, GOPIPURA, SURAT PA NO. ABMPK 5821 A (APPELLANT) (RESPONDENT) APPELLANT BY SHRI B. L. YADAV, DR RESPONDENT BY SHRI M. K. PATEL, AR DATE OF HEARING: 14-12-2011 DATE OF PRONOUNCEMENT: 16-12-2011 O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-II I, SURAT DATED 28 TH NOVEMBER, 2008 FOR ASSESSMENT YEAR 2003-04 CHALLENG ING THE ORDER OF THE LEARNED CIT(A) IN RESTRICTING THE ADDITION O F RS.1,60,19,829/- TO RS.13,60,000/- MADE BY THE AO ON NON-GENUINE PURCHA SES (UNVERIFIABLE PURCHASES). 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE AO I SSUED STATUTORY NOTICES TO THE ASSESSEE FOR COMPLETION OF THE ASSES SMENT PROCEEDINGS BUT DUE TO NON-COOPERATION FROM THE SID E OF THE ASSESSEE EX-PARTE ASSESSMENT ORDER WAS PASSED. THE AO NOTED THAT ITA NO.343/AHD/2009 THE ITO, WARD- 5 (1), SURAT VS SHRI ASHISH SHANTILA L KADIA 2 THE ASSESSEE HAS MADE PURCHASES OF GREY CLOTHES FOR RS.6,40,79,317/- AND THE MAJOR PORTION OF THE SAME I.E. RS.5,68,00,000/- WAS SHOWN AS CLOSING STOCK. THE AO CONSIDERING THE NON-COOPERATIVE ATTITUDE OF THE ASSESSEE DISALL OWED 25% OF THE PURCHASES BY FOLLOWING THE ORDER OF THE ITAT AHMEDA BAD BENCH IN THE CASE OF VIJAY PROTEINS, 55 TTJ 70 AND MADE THE ADDITION ACCORDINGLY. THE ASSESSEE FURNISHED COMPLETE DETAIL S BEFORE THE LEARNED CIT(A) WHICH WERE FORWARDED TO THE AO FOR E XAMINATION AND FILING OF THE REMAND REPORT. THE AO FILED HIS REPOR T BEFORE THE LEARNED CIT(A) SUBMITTING THEREIN THAT OUT OF TOTAL PURCHAS ES MADE, THE PURCHASE BILLS OF RS.54,30,654/- WERE NOT PRODUCED FOR VERIFICATION AND OUT OF THE BILLS PRODUCED, MANY WERE WITH INCOM PLETE ADDRESSES AND WITHOUT TELEPHONE NUMBERS. SUPPORTING BILLS OF THE EXPENSES WERE NOT FILED. THE LEARNED CIT(A) CONSIDERING THE EXPLANATION OF THE ASSESSEE AND THE REPORT FURNISHED BY THE AO ON RE-E XAMINATION OF THE MATERIAL FOUND THAT THE ASSESSEE HAD NOT BEEN A BLE TO PROVE THE GENUINENESS OF THE PURCHASES WORTH RS.54,30,654/-. THE LEARNED CIT(A) FURTHER FOUND THAT MAJOR PORTION OF THE PURC HASES HAVE BEEN SHOWN IN CLOSING STOCK IN A SUM OF RS.5,68,00,000/- AS IS NOTED BY THE AO IN THE ASSESSMENT ORDER ALSO. THE LEARNED CI T(A) ON EXAMINATION OF THE FACTS FOUND THAT PURCHASES WERE ACTUALLY MADE BUT THE EXPENDITURE MADE FOR MAKING THESE PURCHASES IS NOT VERIFIABLE. THE LEARNED CIT(A), THEREFORE, FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF VIJAY PROTEINS (SUPRA) FOLLOWED BY THE AO ALSO WAS OF THE VIEW THAT IT WOULD BE FAIR AND REASONABLE IF 25% OF THE PURCHASE PRICE CLAIMED ON ACCOUNT OF BILLS WHICH WERE NOT PRODUCED FOR VERIFICATION BE DISALLOWED. THE LEARNED CIT(A), THEREFORE, RESTR ICTED THE ITA NO.343/AHD/2009 THE ITO, WARD- 5 (1), SURAT VS SHRI ASHISH SHANTILA L KADIA 3 DISALLOWANCE TO RS.13,60,000/- BEING ONE FOURTH OF THE AMOUNT FOR WHICH PURCHASE BILLS WERE NOT PRODUCED. 3. THE LEARNED DR RELIED UPON THE ORDER OF THE AO A ND SUBMITTED THAT THE PURCHASES COULD NOT BE SUBJECTED TO VERIFI CATION; THEREFORE, ENTIRE ADDITION SHOULD BE MADE. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSION MADE BEFORE THE LEARNED CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE FINDINGS OF THE AUTHORITIES BELOW. THE AO DISALLOWE D 25% OUT OF THE PURCHASES BECAUSE OF THE NON-COOPERATIVE ATTITUDE O F THE ASSESSEE. THE AO HOWEVER, NOTED THAT MAJOR PORTION OF THE PUR CHASES CLAIMED HAVE BEEN SHOWN IN THE CLOSING STOCK IN A SUM OF RS .5,68,00,000/-. SAME FACT WAS ALSO FOUND BY THE LEARNED CIT(A). IT IS, THEREFORE, CLEAR THAT THE ASSESSEE MADE ACTUAL PURCHASES BUT THE DET AILS COULD NOT BE SUBJECTED TO VERIFICATION. WHEN COMPLETE DETAILS WE RE FILED BEFORE THE LEARNED CIT(A), THE AO WAS ASKED TO RE-EXAMINE THE ISSUE AND THE AO FILED HIS REPORT BEFORE THE LEARNED CIT(A) CONFI RMING THAT THE ASSESSEE HAS NOT PRODUCED THE BILLS FOR PURCHASE OF RS.54,30,654/-. SINCE THE PURCHASES HAVE BEEN SHOWN IN THE CLOSING STOCK AND THE BILLS WERE PRODUCED BEFORE THE AO WHICH HAVE SUBJEC TED TO EXAMINATION BY THE LEARNED CIT(A) ALSO AND FURTHER NO MATERIAL IS PRODUCED BEFORE US TO REBUT THE FINDINGS OF THE LEA RNED CIT(A), WE DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE OR DER OF THE LEARNED CIT(A). WE ACCORDINGLY, DO NOT FIND MERIT IN THE AP PEAL OF THE REVENUE. SAME IS ACCORDINGLY DISMISSED. ITA NO.343/AHD/2009 THE ITO, WARD- 5 (1), SURAT VS SHRI ASHISH SHANTILA L KADIA 4 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT SD/- SD/- (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD