ACIT CEN CIR 34, MUMBAI V. VARUN INDUSTRIES LTD, MUMBAI

ITA 3854/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 1001 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2017
• Appeal Filed By: Department
• Bench Allotted: F
• Next Hearing Date: 02-03-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 01-06-2012
• Court: TRIBUNAL
• Keywords: Bogus purchase
• Section: 153A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & SANDEEP GOSAIN (JM) I.T.A. NO. 2779 /MUM/20 12 (ASSESSMENT YEAR 20 08 - 09 ) I.T.A. NO. 2780/MUM/2012 (ASSESSMENT YEAR 2009 - 10) I.T.A. NO. 2781/MUM/2012 (ASSESSMENT Y EAR 2010 - 11) M/S. VARUN INDUSTRIES LIMITED 13, SHANKESHWAR DARSHAN A.G. PAWAR CROSS LANE BYCULLA MUMBAI - 400 027. VS. ACIT CENTRAL CIRCLE 34 AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) I.T.A. NO. 3854/MUM/2012 (ASSESSMENT YEAR 2004 - 05) I.T.A. NO. 3855/MUM/2012 (ASSESSMENT YEAR 2005 - 06) I.T.A. NO. 3856/MUM/2012 (ASSESSMENT YEAR 2006 - 07) I.T.A. NO. 3857/MUM/2012 (ASSESSMENT YEAR 2007 - 08) I.T.A. NO. 3858/MUM/2012 (ASSESSMENT YEAR 2008 - 09) I.T.A. NO. 3859/MUM/2012 (ASSESSMENT YEAR 2009 - 10) I.T.A. NO. 3860/MUM/2012 (ASSESSMENT YEAR 2010 - 11) ACIT CENTRAL CIRCLE 34 AAYAKAR BHAVAN M.K. ROAD MUMBAI - 400 020. VS. M/S. VARUN INDUSTRIES LIMITED 13, SHANKESHWAR DARSHAN A.G. PAWAR CROSS LANE BYCULLA MUMBAI - 400 027. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAACV2069F ASSESSEE BY NONE DEPARTMENT BY MS. S. PADMJA DATE OF HEARING 24 . 4 . 201 7 DATE OF PRONOUNCEMENT 24 . 4 . 201 7 M/S. VARUN INDUSTRIES LTD. 2 O R D E R PER BENCH: THE REVENUE HAS FILED APPEALS FOR ASSESSMENT YEARS 2004 - 05 TO 2010 - 11 AND THE AS SESSEE HAS FILED APPEALS FOR ASSESSMENT YEARS 2008 - 09 TO 2010 - 11. ALL THESE APPEALS ARE DIRECTED AGAINST THE COMMON ORDER DATED 29 - 12 - 2011 PASSED BY LD CIT(A) - 41, MUMBAI. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, EVEN THOUGH THE NOTICES WERE SENT B Y REGISTERED POST ON MORE THAN ONE OCCASION. WE ALSO NOTICE THAT THE LETTERS HAVE BEEN RETURNED BACK BY THE POSTAL DEPARTMENT. HENCE THE BENCH HAS DIRECTED THE REVENUE TO SERVE THE NOTICE TO THE ASSESSEE. THE LD D.R HAS INFORMED THAT THE NOTICES HAVE BE EN SERVED UPON BY THE ASSESSEE BY WAY OF AFFIXTURE. SINCE THE APPEALS HAVE BEEN FILED WAY BACK IN 2012, WE PROCEED TO DISPOSE OF THE APPEALS EX - PARTE, WITHOUT THE PRESENCE OF THE ASSESSEE. 3. WE HAVE HEARD LD D.R AND PERUSED THE RECORD. THE ISSUES CONTESTED BY BOTH THE PARTIES RELATE TO ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES. THE ASSESSEES GROUP WAS SUBJECTED TO SEARCH ACTION ON 23.07.2009. THE SEARCH WAS CONSEQUENT TO THE SURVEY/SEARCH OPERATIONS CONDUCTED IN THE HANDS OF BROKERS NAMED SHRI ATUL SANGHAVI AND DILIP SHAH ON 05 - 02 - 2007. THESE BROKERS APPEAR TO HAVE ADMITTED THAT THEY HAVE BEEN PROVIDING BOGUS ACCOMMODATION BILLS. DURING THE COURSE OF SEARCH ACTION IN THE HANDS OF THE ASSESSEE, SWORN STATEMENTS WERE TAKEN FROM SHRI KIRAN N MEHT A, CMD AND SHRI KAILASH AGARWAL, JOINT MD. IN THE SWORN STATEMENT, THEY ADMITTED ADDITIONAL INCOME OF ABOUT 72.16 CRORES TOWARDS BOGUS PURCHASE BILLS. ACCORDINGLY THE ASSESSMENTS UNDER CONSIDERATION WERE REOPENED U/S 153A OF THE ACT AND THE ADDITIONS WER E MADE IN AY 2004 - 05 TO 2009 - 10 IN RESPECT OF PURCHASES MADE THROUGH SHRI ATUL M/S. VARUN INDUSTRIES LTD. 3 SANGHAVI AND SHRI DILIP SHAH. IN ASSESSMENT YEARS 2008 - 09 TO 2010 - 11, THE PURCHASES MADE FROM SOME OTHER PERSONS WERE ALSO DISALLOWED BY THE AO. 4. IN THE APPELLATE PROCEED INGS, THE LD CIT(A) DELETED THE ADDITIONS RELATING TO THE PURCHASES MADE THROUGH SHRI ATUL SANGHAVI AND SHRI DILIP SHAH IN AYS 2004 - 05 TO 2010 - 11 ON THE REASONING THAT (A) THE ASSESSING OFFICER OF THE ABOVE SAID BROKERS HAD EXAMINED THE TRANSACTIONS IN TH EIR RESPECTIVE HANDS AND DID NOT FIND ANY FAULT THEREIN. (B) THE PURCHASES MADE IN AY 2004 - 05 AND 2005 - 06 WERE ALREADY UNDER SCRUTINY BY THE AO IN AN EARLIER PROCEEDING AND THE SAID ADDITIONS HAVE BEEN DELETED BY THE TRIBUNAL. AGGRIEVED BY THE ORDERS PA SSED BY THE LD CIT(A) GRANTING RELIEF TO THE ASSESSEE, THE REVENUE HAS FILED THESE APPEALS BEFORE US. THE LD CIT(A), HOWEVER, CONFIRMED THE DISALLOWANCE OF PURCHASES MADE FROM SOME OTHER PARTIES IN AY 2008 - 09 TO 2010 - 11. AGGRIEVED, THE ASSESSEE HAS FILED THESE THREE APPEALS BEFORE US. 5. THE LD D.R SUBMITTED THAT THE ORDERS PASSED BY THE AO IN THE HANDS OF SHRI ATUL SANGHAVI AND SHRI DILIP SHAH HAS BEEN REVISED BY THE LD CIT AND THE ADDITIONS HAVE BEEN MADE IN THEIR HANDS ON PROTECTIVE BASIS. ACCORD INGLY SHE SUBMITTED THAT THE LD CIT(A) SHOULD NOT HAVE GRANTED RELIEF TO THE ASSESSEE ON THE BASIS OF ORDERS PASSED IN THE HANDS OF THE ABOVE SAID BROKERS, SINCE THE ISSUES HAVE NOT BECOME FINAL IN THEIR HANDS. IN RESPECT OF ADDITIONS CONFIRMED BY THE LD CIT(A), THE LD D.R SUBMITTED THAT THE LD CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION, SINCE THE ASSESSEE HAS FAILED TO PROVE THE GENUINENESS. 6. HAVING HEARD RIVAL SUBMISSIONS, WE ARE OF THE VIEW THAT ALL THE ADDITIONS MADE BY THE AO REQUIRE RE - EXAMINATI ON AT THE END OF LD CIT(A) IN THE LIGHT OF SUBSEQUENT DEVELOPMENTS THAT HAPPENED IN THE ASSESSMENTS OF TWO BROKERS AND M/S. VARUN INDUSTRIES LTD. 4 THE OTHER PARTIES. ACCORDINGLY WE SET ASIDE THE COMMON ORDER PASSED BY LD CIT(A) AND RESTORE ALL THE MATTERS TO HIS FILE FOR CONSIDERING THEM AFRESH BY DULY CONSIDERING THE RELEVANT FACTS AND SUBSEQUENT DEVELOPMENTS. 7. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AND THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 24 . 4 .20 1 7. SD/ - SD/ - (SANDEEP GOSAIN ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 24 / 4 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI