ACIT, Jaipur V. FLORALS INDIA, Jaipur

ITA 356/JPR/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5387 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MAHENDRA GARGIEYA ADV DHK
• Keywords: Bogus purchase; Opportunity of being heard
• Section: 143(3); 131

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 356/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR. CUKE VS. M/S FLORALS INDIA, E-11, RAMPATH, SHYAM NAGAR EXT., JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AAAFF 1950 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI AJAY MALIK (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/03/2016 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 26/04/2016. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 21/02/2014 OF THE LEARNED C.I.T.(A)-I, JAIPUR FOR A. Y. 2008-09. THE SOLE GROUND OF APPEAL IS REPRODUCED AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW THE LD CIT(A) HAS ERRED IN DELETING THE PE NALTY U/S 271(1)(C) OF RS. 26,78,691/- LEVIED BY THE ASSE SSING OFFICER. 2 ITA NO. 356/JP/2014 ACIT VS M/S FLORALS INDIA 2. THE SOLE GROUND OF THE APPEAL IS AGAINST DELETING THE PENALTY OF RS. 26,78,691/- MADE U/S 271(1)(C) OF THE INCOME TAX ACT , 1961 (IN SHORT THE ACT). IN THIS CASE, THE ASSESSMENT U/S 143(3) OF TH E ACT WAS COMPLETED ON 20/12/2010. THE LD ASSESSING OFFICER MADE ADDITION O N ACCOUNT OF UNVERIFIABLE PURCHASES OF RS. 78,80,818/-, WHICH WAS SHOWN FROM SHRI RAMESH CHAND CHAJJER AND SMT. TARA DEVI CHAJJER. THE LD ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT SEPARATELY FOR CONCEALING OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. 2.1 BEFORE IMPOSING PENALTY U/S 271(1)(C) OF THE AC T, THE LD ASSESSING OFFICER AGAIN GAVE REASONABLE OPPORTUNITY OF BEING HEARD. IT IS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE MADE PURCHA SE FROM SHRI RAMESH CHAND CHAJJER AT RS. 39,25,816/- AND FROM SMT. TARA DEVI CHAJJER AT RS. 39,55,002/-. THE LD ASSESSING OFFICER VERIFIED THE G ENUINENESS OF THE PURCHASES DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. THE STATEMENT U/S 131 OF THE ACT OF SHRI RAMESH CHAND CHAJJER AND SMT . TARA DEVI CHAJJER WERE RECORDED AND THEY CATEGORICALLY ADMITTED IN THE IR STATEMENT THAT THEY HAD GIVEN BOGUS ENTRIES FOR PURCHASE OF ASSESSEE FI RM WITHOUT ANY PHYSICAL DELIVERY OF ANY ALLEGED PURCHASE. HENCE IT WAS CLEAR THAT THE PURCHASE SHOWN 3 ITA NO. 356/JP/2014 ACIT VS M/S FLORALS INDIA FROM PERSONS MENTIONED ABOVE WERE BOGUS. THE ASSESSE E HAD ADOPTED THIS OPERANDI THAT TO REDUCE THE PROFITABILITY BY RS. 78 ,80,815/-. HE FURTHER OBSERVED THAT THE LD ASSESSING OFFICER HAD INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT IN QUANTUM ADDITION AND MADE ADDI TION OF RS. 78,80,815/-. THE ASSESSEES REPLY IS REPRODUCED ON PAGE 2-3 OF TH E PENALTY ORDER. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD ASSESSING OFFICER HELD THAT THE ASSESSING OFFICER HAD SATISFIED THAT THE ASSESSEE H AS CONCEALED THE PARTICULARS OF INCOME AND FURNISHED INACCURATE PART ICULARS OF INCOME. THE ASSESSEES EXPLANATION WAS FOUND FALSE TO HIM. HE FU RTHER RELIED ON THE DECISION IN THE CASE OF DHARMENDRA TEXTILE PROCESSOR S & OTHERS (2008) 306 ITR 277 (SC) WHEREIN IT HAS BEEN HELD THAT MENS REA I S NOT REQUIRED TO BE PROVED BY THE ASSESSING OFFICER. THE ASSESSEE HAD AL LOWED SUFFICIENT OPPORTUNITY TO PROVE THAT THEIR PURCHASERS ARE GENU INE. THEREFORE, HE IMPOSED MINIMUM PENALTY @ 100% OF TAX SOUGHT TO BE E VADED ON CONCEALED INCOME AT RS. 26,78,690/-. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE THE MATTER BEFORE THE LD CIT(A), WHO HAD DELETED THE PENALTY BY OBSERVING THAT THE HONBLE ITAT, JAIPUR BENCH, JAIPUR HAD DELE TED THE ADDITION MADE BY THE ASSESSING OFFICER IN ITA NO. 168/JP/2012 FOR A .Y. 2008-09 ORDER DATED 31/1/2014, THEREFORE, PENALTY U/S 271(1)(C) DOES NO T SURVIVE. 4 ITA NO. 356/JP/2014 ACIT VS M/S FLORALS INDIA 4. NOW THE REVENUE IS IN APPEAL BEFORE US. THE LD DR HAS SUPPORTED THE ORDER OF THE ASSESSING OFFICER. AT THE OUTSET, THE LD AR OF THE ASSESSEE HAS REITERATED THE ARGUMENTS MADE BEFORE THE LD CIT(A) A ND ARGUED THAT THE ORIGINAL ADDITION ITSELF HAS BEEN DELETED BY THE HO NBLE ITAT IN ITA NO. 168/JP/2012, THEREFORE, LD CIT(A) WAS RIGHT IN DELETI NG THE PENALTY. 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE COORDINATE BENCH HAS DECIDED THE QUANTUM APPEAL VIDE ORDER DATED 31/1/2014 AND ADDIT ION MADE ON ACCOUNT OF BOGUS PURCHASES IN THE NAMES OF SHRI RAMESH CHAN D CHAJJER AND SMT. TARA DEVI CHAJJER FOUND GENUINE. WHEN ORIGINAL ADDIT ION HAS BEEN DELETED BY THE COORDINATE BENCH, THE PENALTY PROCEEDINGS U/S 2 71(1)(C) DOES NOT SURVIVE. ACCORDINGLY, WE DISMISS THE REVENUES APPEA L. 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 26/04/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26 TH APRIL, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ACIT, CIRCLE-2, JAIPUR. 5 ITA NO. 356/JP/2014 ACIT VS M/S FLORALS INDIA 2. IZR;FKHZ @ THE RESPONDENT- M/S FLORALS INDIA, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO.356/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR