The ACIT, Circle-4, Surat V. M/s. Shree Nidhiman Business Pvt.Ltd., Surat

ITA 389/AHD/2010

• Counselvise Citation: 38920514 RSA 2010
• Duration Of Justice: 2 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-08-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 08-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: ASHWIN C SHAH
• Keywords: Bogus purchase; Tax effect
• Section: 143(3)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , .'# '#,$% $ & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A. NO.389/AHD/2010 ( # ( # ( # ( # ( / / / / ASSESSMENT YEAR : 2006-07) ACIT CIRCLE-4 SURAT # # # # / VS. M/S.SHREE NIDHIMAN BUSINESS P.LTD. 38, SHITAL SHOPPING SQUARE TURNING POINT SURAT ) $% ./*+ ./ PAN/GIR NO. : AAHCS 4768 H ( ), / // / APPELLANT ) .. ( -.),/ RESPONDENT ) ), / $/ APPELLANT BY : SHRI B.L.YADAV, D.R. -.), 0 / $ / RESPONDENT BY : SHRI ASHWIN C.SHAH, A.R. #1 0 %/ // / DATE OF HEARING : 28/05/2012 2'( 0 % / DATE OF PRONOUNCEMENT : 31/5/12 $3/ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST TH E ORDER OF CIT(APPEALS)-IV, SURAT DATED 25.11.2009, RAISING FOLLOWING GROUNDS :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A)-IV, SURAT HAS ERRED IN DELETING TH E ADDITION OF RS.7,00,266/- MADE BY THE AO ON ACCOUNT OF BOGUS P URCHASE. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS E NGAGED IN THE BUSINESS OF TRADING OF ALL TYPES OF HOME FURNISHING ITEMS. THE ASSESSEE ITA NO .389/AHD/2010 ACIT VS. M/S.SHREE NIDHIMAN BUSINESS P.LTD. ASST.YEAR - 2006-07 - 2 - FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSI DERATION ON 21-11-2006 DECLARING TOTAL INCOME OF RS.8,73,681/- AND THE AS SESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 15.12.2008 DET ERMINING TOTAL INCOME AT RS.15,73,950/-. AGGRIEVED, THE ASSESSEE W ENT IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. THE LD. CIT(A) HAS DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS :- I HAVE CONSIDERED THE FACTS OF THE CASE, THE VIEW TAKEN BY THE AO AND THE SUBMISSIONS MADE BY THE APPELLANT COMPANY. IT IS SENT HAT IN PARA 8, PAGE 4 OF THE ASSESSMENT ORDER, THE AO HAS ACCEPTED THE FACT THAT THE APPELLANT COMPANY RUNS ITS BUSIN ESS UNDER THE TRADE NAME OF SANSKRITI FURNISHING AND HENCE, THE SAID FACT IS NOT DISPUTED. FURTHER, THE APPELLANT COMPANY EVEN RUNS ITS BANK ACCOUNT UNDER THE TRADE NAME OF SANSKRITI FURNISHI NG AND THE BILLS OF ITS SUPPLIERS ARE ALSO IN THE SAID TRADE NAME. IT IS ALSO SEEN THAT THE SAID 2 SUPPLIERS VIZ. M/S.EDEN FURNIS HIGN PVT.LTD. OF MUMBAI AND M/S.DEEP JYOTI TEXTILE MILLS OF MUMBAI H AVE DENIED ANY TRANSACTIONS WITH THE APPELLANT COMPANY SINCE T HE LETTERS U/S.133(6) WERE ISSUED IN THE NAME OF THE COMPANY I .E. SHREE NIDHIMAN BUSINESS PVT.LTD. WITHOUT MENTIONING THE T RADE NAME SANSKRITI FURNISHING. MOREOVER, WHEN THE AO ISSUE D A SCN IN THIS REGARD ASKING TO SHOW CAUSE AS TO WHY THE PURC HASES OF RS.7,00,266/- FROM THE SAID 2 PARTIES SHOULD NOT BE TREATED AS BOGUS, THE APPELLANT COMPANY HAS CLEARLY DISCHARGED ITS ONUS OF PROVING THE PURCHASES BY NOT ONLY SUBMITTING TO THE AO ACCOUNT CONFIRMATION OF THE SAID 2 PARTIES BUT ALSO THE COP Y OF PURCHASE BILLS GIVING THE NAME OF THE TRANSPORTER ALONG WITH L.R. NO. AND DATE AND STAMP OF OCTROI AUTHORITY BEING THE SURAT MUNICIPAL CORPORATION AS ALSO THE S.T.AND C.S.T. REGISTRATION NO. OF THE SUPPLIERS, THUS, CLEARLY ESTABLISHING THE RECEIPT O F THE SAID GOODS. FURTHER, THE APPELLANT COMPANY HAS ALSO SUBMITTED T HE BANK STATEMENTS OF THE SAID 2 PARTIES CLEARLY SHOWING TH E CLEARANCE OF THE CHEQUES AS ISSUED BY IT AGAINST THE PURCHASES M ADE, WHICH FULLY ITA NO .389/AHD/2010 ACIT VS. M/S.SHREE NIDHIMAN BUSINESS P.LTD. ASST.YEAR - 2006-07 - 3 - JUSTIFIES THE PURCHASES MADE BY THE APPELLANT COMPA NY. THE AO HAS ALSO NOT BEEN ABLE TO POINT OUT ANY DEFECTS IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE APPELLANT COMPANY. HENC E, I AM OF THE OPINION THAT THE AO HAS ERRED IN REJECTING THE BOOK RESULTS OF THE APPELLANT COMPANY AND MAKING AN ADDITION OF RS. 7,00,266/- FOR BOGUS PURCHASE AND ACCORDINGLY, THE ADDITION OF RS. 7,00,266/- FOR BOGUS PURCHASE AS MADE BY THE AO IS DELETED. 2. FROM THE SIDE OF THE RESPONDENT-ASSESSEE, A PREL IMINARY OBJECTION WAS RAISED IN RESPECT OF THE TAX INVOLVED IN THIS A PPEAL OF THE REVENUE. LEARNED AUTHORISED REPRESENTATIVE MR.ASHWIN C.SHAH HAS STATED THAT THIS APPEAL OF THE REVENUE DESERVES TO BE DISMISSED IN LIMINE BECAUSE THE TAX EFFECT OF RS.2,13,451/- WHICH IS BELOW THE LIM IT PRESCRIBED BY SEVERAL CBDT CIRCULARS. 3. A QUERY WAS RAISED BY THE BENCH AS TO THE MAINT AINABILITY OF THE APPEALS, IN VIEW OF RECENT CBDT CIRCULAR RESTRICTIN G FILING OF APPEAL BY THE REVENUE, THE LEARNED DR DID NOT CONTROVERT THE SAME, AND STATED THAT THE TAX EFFECT IN THE PRESENT CASE IS BELOW THE TAX LIMIT PRESCRIBED THE CBDT. 4. AFTER HAVING HEARD BOTH PARTIES, CONSIDERING THE MATERIAL AVAILABLE ON RECORD AND THE CBDT CIRCULARS ON THIS ISSUE, WE FIND THAT THE TAX EFFECT IN THIS CASE IS LESS THAN RS.3 LACS. SO AFTE R CONSIDERING THE SUBMISSIONS OF LD. DR AND GOING THROUGH THE MATERIA LS ON RECORD, WE ARE OF THE VIEW THAT THE DEPARTMENT OUGHT NOT HAVE FILE D THE APPEAL. OUR VIEW IS SUPPORTED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. MANGLAM RICINUS LTD. (2008) 174 TAX MAN 186 (DEL) AND INSTRUCTION NO.3/2011 [F.NO.279/MISC.142/2007-ITJ] DATED ITA NO .389/AHD/2010 ACIT VS. M/S.SHREE NIDHIMAN BUSINESS P.LTD. ASST.YEAR - 2006-07 - 4 - 9-2-2011 . AS THE APPEAL SO FILED IS AGAINST THE EXECUTIV E INSTRUCTIONS WHICH ARE BINDING ON THE DEPARTMENT, WE DISMISS THE APPEAL IN LIMINE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. SD/- SD/- ( .'# '# ) ( ) $% ( A. MOHAN ALANKAMONY ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD; DATED 31/ 5 /2012 4..#, .#../ T.C. NAIR, SR. PS $3 0 -5 6$5( $3 0 -5 6$5( $3 0 -5 6$5( $3 0 -5 6$5(/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT 3. 7 / CONCERNED CIT 4. 7() / THE CIT(A)-IV, SURAT 5. 5:; -# , , / DR, ITAT, AHMEDABAD 6. ; <1 / GUARD FILE. $3# $3# $3# $3# / BY ORDER, .5 - //TRUE COPY// = == =/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION(COPIED MATTER) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.5.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S31.5.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.5.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER