The Assistant Commissioner of Income Tax, Circle-1, Margao., Margao V. M/s P. G. Virgincar., Margao

ITA 350/PAN/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 2103 (ITAT-PANAJI)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-05-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 11-05-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 30-09-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: PRADIP KULKARNI
• Keywords: Bogus purchase; Additional evidence
• Section: 40A(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 350 /P A N/201 5 (ASST. YEAR : 20 11 - 1 2 ) ACIT, CIRCLE - 1, MARGAO GOA. VS. M/S. P.G. VIRGINCAR & SONS, B.NO.38, NEAR MUNICIPAL GARDEN, MARGAO, GOA . PAN NO. AAEFP 0142 N (APPELLANT) (RESPONDENT) C.O.NO. 71/PAN/2015 ( ITA NO. 350 /P A N/201 5) (ASST. YEAR : 20 11 - 1 2 ) M/S. P.G. VIRGINCAR & SONS, B.NO.38, NEAR MUNICIPAL GARDEN, MARGAO, GOA. VS. ACIT, CIRCLE - 1, MARGAO GOA. PAN NO. AAEFP 0142 N (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRADIP KULKARNI C A DEPARTMENT BY : SHRI R.N. SIDDAPPAJI - D R DATE OF HEARING : 11 / 0 5 /201 6 . DATE OF PRONOUNCEMENT : 11 / 0 5 /201 6 . O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) , PANAJI - 1 , DATED 08 /0 6 /201 5 . 2. GROUND NO.1 OF THE APPEAL OF THE REVENUE IS GENERAL IN NATURE, AND HENCE, REQUIRES NO SEPARATE ADJUDICATION BY US. 2 ITA NO. 350 /P A N/201 5 & C.O.NO.71/PAN/2015 3 . IN GROUND NOS. 2 & 3 , THE GRIEVANCE OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN ALLOWING EXPENDITURE OF 85,19,467/ - CLAIMED ON ACCOUNT OF PURCHASES BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION , EVEN THOUGH THE ASSESSEE FAILED TO PRODUCE ANY DOCUMENTARY EVIDENCE IN SUPPORT OF THE SAID CLAIM . T HE COMMISSIONER OF INCOME TAX (APPEALS) ADMITTED FRESH EVIDENCE AT THE APPELLATE STAGE WITHOUT ALLOWING AN OPPORTUNITY TO THE ASSESSING OFFICER ON THE SAME. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT GROSS PROFIT SHOWN BY THE ASSESSEE DURING THE YEAR WAS 1.26%, WHICH WAS LOWER THA N THE GROSS PROFIT RATE OF 2.05% SHOWN BY THE ASSESSEE IN THE ASSESSMENT YEAR 2008 - 09, 1.88 % IN THE ASSESSMENT YEAR 2009 - 10 AND 1.99% IN THE ASSESSMENT YEAR 2010 - 11 . THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO PRODUCE THE DETAILS FOR PURCHASES. ACCORD I NG TO THE ASSESSING OFFICER, THE ASSESSEE DID NOT PRODUCE THE DETAILS OF PURCHASES OF 1,00,26,545/ - WHICH COMPRISED OF PURCHASE S OF VEHICLES & SPARE - PARTS ( - ) 48,16,816/ - AND PETROL , DIESEL & OIL (+) 1,48,43,361/ - . IN ABSENCE OF THE DETAILS OF PURCHASES , THE ASSESSING OFFICER MADE THE ADDITION OF 1,00,26,545/ - TO THE INCOME OF THE ASSESSEE ON ACCOUNT OF INFLATED/BOGUS PURCHASES . 5. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) RESTRI CT ED THE ADDITION TO THE DIFFERENCE BETWEEN GROSS PROFIT R ATE ADOPTED BY THE COMMISSIONER OF INCOME TAX (APPEALS) AT 2% AND THE GROSS PROFIT RATE SHOWN AT 1.26% , AND THEREBY SUSTAINED THE ADDITION OF 15,07,076/ - . WHILE DOING SO, THE COMMISSIONER OF INCOME TAX (APPEALS) ACCEPTED THE LEDGER AMOUNT OF 1,00,26,54 5 / - ON THE GROUND TH A T DUE TO OVERSIGHT THE SAME , REMAINED TO BE FILED BEFORE THE ASSESSING OFFICER. 3 ITA NO. 350 /P A N/201 5 & C.O.NO.71/PAN/2015 6 . DEPARTMENTAL REPRESENTATIVE ARGUED AND SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) COULD NOT HAVE ADMITTED ADDITIONAL EVIDENCE IN THE FORM OF DETAILS OF PURCHASES OF 1,00,26,545/ - IN VIOLATION OF RULE 46A OF INCOME TAX RULES, 1962 W ITH OUT CONFRONTING THE SAME TO THE ASSE SSING OFFICER BY CALLING FOR A REMAND REPORT FROM THE ASSESSING OFFICER. 7 . AUTHORIZED REPRESENTATIVE OF THE ASSESSEE CONCEDED THAT THE DETAILS OF THE PURCHASES OF 1,00,26,545/ - FILED BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) WAS NOT FILED BEFORE THE ASSESSING OFFICER AND THAT NO REMAND REPORT ON THE SAME WAS CALLED FROM THE ASSESSING OFFICER DURING THE COURSE OF APPEAL HEARING . 8 . IN VIEW OF THE ABOVE SUBMI SSIONS OF THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, WE SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) AND REMAND THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH AS PER LAW AFTER VERIFYING THE DETAILS OF PU RCHASES OF 1,00,26,545/ - AND ALLOWING REA S ONABLE AND PR O PER OPPORTUNITY OF HEARING TO THE ASSESSEE. THE ASSESSEE IS ALSO DIRECTED TO FILE THE DETAILS OF THE PURCHASES OF 1,00,26,545/ - BEFORE THE ASSESSING OFFICER , AS AND WHEN CALLED UPON , TO DO SO. THUS, THESE GROUNDS OF APPEAL OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE. 9. IN GROUND NOS. 4 TO 6 OF THE APPEAL, THE GRIEVANCE OF THE REVENUE IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DELETING THE ADDITION OF 5,17,324/ - ON ACCOUNT OF UN CON FI RMED SUNDRY CREDITORS, DELETING THE OF ADDITION OF 8,01,912/ - BEING 25% OF EXPENSES OF 82,07,650/ - TOWARDS SALARY AND WAGES , STORES & SPARES AND SECURITY EXPENSES ETC. AND DELETION OF ADDITION OF 6,15,804/ - UNDER SECTION 40A(3) OF THE ACT. 4 ITA NO. 350 /P A N/201 5 & C.O.NO.71/PAN/2015 10 . AS THESE GROUNDS OF APPEAL ARE INTERCONNECTED WITH THE GROUND NOS. 2 & 3 OF THE APPEAL TAKEN BY THE REVENUE AND WE HAVE RESTORED , THE GROUND NOS. 2 &3 OF THE APPEAL , BACK TO THE FILE OF THE ASSESSING OFFICER, THEREFORE, THE ISSUE S INVOLVED IN OTHER GROUNDS OF APPEAL OF THE REVENUE ARE ALSO RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH AS PER LAW AFTER ALLOWING REASONABLE AND PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. 11 . IN THE CROSS OBJECTION, THE ASSESSEE HAS RAISED THE FOLLO W ING GROUNDS: - 1) THE CIT APPEALS HAS GIVEN A CLEAR FINDING THAT ALL THE PURCHASES HAVE BEEN DULY SUPPORTED BY DOCUMENTARY EVIDENCES WHICH WERE PRODUCED BEFORE THE ASSESSING OFFICER. 2) THERE IS NO FRESH EVIDENCE SUBMITTED AT THE APPELLATE STAGE NOR ANY NEW GROUNDS RAISED, ALL THE DOCUMENTS HAVE BEEN PRODUCED BEFORE THE ASSESSING OFFICER. 3) NO ADDITION U/S 68 CAN BE MADE FOR UNCONFIRMED CREDITORS PARTICULARLY WHEN THE PURCHASES MADE IN EARLIER YEARS HAVE BEEN ACCEPTED BY THE DEPARTMENT AND IS NOT IN NATURE OF CASH CREDIT. 4) NO ADDITION COULD BE MADE FOR STORES CONSUMABLES, SALARIES ETC WHEN THE GROSS PROFIT IS ALREADY ENHANCED AND ADDITION MADE ON ADHOC BASIS. 5) THE APPELLANT CRAVES LEAVE TO ADD, DELE TE, MODIFY, AMEND ANY OF THE GROUNDS AT THE TIME OF HEARING 12 A S THE ISSUE S INVOLVED IN THE CROSS OBJECTION OF THE ASSESSEE ARE IN TER CONNECTED WITH THE ISSUE S INVOLVED IN THE APPEAL OF THE REVENUE AND WE HAVE RESTORED THE ISSUE S INVOLVED IN THE APPEAL OF THE REVENUE TO THE FILE OF THE ASSESSING OFFICER, THEREFORE, THE ISSUE S INVOLVED IN THE CROSS OBJECTION ARE ALSO RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER ALLOWING REASONABLE AND PROPER OPPOR TUNITY OF HEARING TO THE ASSESSEE. 5 ITA NO. 350 /P A N/201 5 & C.O.NO.71/PAN/2015 13 IN THE RESULT, APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE BOTH ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON WEDNESDAY , THE 1 1 TH DAY OF MAY , 201 6 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 1 TH MAY , 201 6 . VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R . 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI