DCIT 9(1), MUMBAI V. ASPEE AGRO EQUIPMENT P.LTD, MUMBAI

ITA 4065/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4374 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 04-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MOHAMMED RIZWAN
• Assessee Lawyers: B P PUROHIT
• Keywords: Bogus purchase; Principle of natural justice

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI- A,BENCH , , BEFORE S/SH. JOGINDER SINGH,JUDICIA L MEMBER & RAJENDRA,ACCOUNTANT MEMBER /.ITA/4065/MUM/2014, /ASSESSMENT YEAR :2010-11 DY. CIT-9(1) ROOM NO.223, AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS M/S. ASPEE AGRO EQUIPMENT PVT. LTD. ASPEE HOUSE, B.J. PATEL ROAD MALAD (W) MUMBAI-400 064. PAN:AAACA 8980 G ( / APPELLANT) ( / RESPONDENT) /ASSESSEE BY :SHRI B.P. PUROHIT / REVENUE BY :SHRI MOHAMMED RIZWAN / DATE OF HEARING : 03-12- 2015 / DATE OF PRONOUNCEMENT : 01.01.2016 ,1961 254(1) ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.24.03.2014 OF CIT(A)-19,MU MBAI,THE ASSESSING OFFICER(AO)HAS FILED THE PRESENT APPEAL. ASSESSEE-COMPANY,ENGAGED IN THE BUSINESS OF MANUFAC TURING AND SALE OF AGRICULTURAL EQUIP - MENTS,FILED ITS RETURN OF INCOME ON 30.09.2011,DECL ARING INCOME AT RS.5.28CRORES.THE AO COMPLETED THE ASSESSMENT ON 15.02.2013,U/S.143(3) O F THE ACT DETERMINING THE INCOME OF THE ASSESSEE AT RS.5.51 CRORES. 2. EFFECTIVE GROUND OF APPEAL IS ABOUT DELETING THE AD DITION MADE BY THE AO,AMOUNTING TO RS. 25.58 LAKHS.DURING THE ASSESSMENT PROCEEDINGS,THE A O FOUND THAT THE ASSESSEE HAD MADE PURCHASES OF CERTAIN MATERIAL FROM JAY ENTERPRISE(J E).HE HAD RECEIVED CERTAIN INFORMATION FROM THE SALES TAX DEPARTMENT(STD)THAT JE WAS PROVIDING ACCOMMODATION BILLS ONLY,THAT IT WAS NOT SUPPLYING GOODS TO ITS BUYERS.HE DIRECTED THE ASSES SEE TO PRODUCE JE.AS PER THE AO THE ASSESSEE DID NOT PRODUCE JE BEFORE HIM DURING THE ASSESSMENT PROCEEDINGS.THEREFORE,HE TREATED THE PURCHASE MADE FROM JE AS BOGUS PURCHASES AND ADDED IT TO THE TOTAL INCOME OF THE ASSESSEE. 3 .AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM THE ASSESSEE PRODUCED VOL UMINOUS SUBMISSIONS ALONG WITH EXTENSIVE DOCUMENTARY EVIDENCES.THE FAA CALLED FOR A REMAND R EPORT (RR)FROM THE AO.THE ASSESSEE ARGUED BEFORE THE FAA THAT IT HAD FURNISHED COPIES OF DELIVERY CHALLANS, INVOICES, STORE REGISTER,DETAILS OF CHEQUE PAYMENT AND BANK STATEME NTS IN CONNECTION WITH ITS DEALING WITH JE,THAT PURCHASES HAD BEEN MADE NEARLY FOUR YEARS A GO,THAT THERE WAS NO FURTHER TRANSACTION WITH JE,THAT THE AO HAD RELIED UPON THE INFORMATION RECE IVED FROM STD,THAT ONUS WAS ON THE AO THAT THE PURCHASES WERE BOGUS.AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER ALONG WITH THE RR,THE FAA HELD THAT THE ASSES SEE HAD ESTABLISHED THAT THERE WAS A CLEAR AUDIT TRAIL AVAILABLE IN THE MATTER THAT INCLUDED P LACING OF ORDER,RECEIPT OF GOODS, PAYMENT 4065/M/14-ASPEE AGRO-10-11 2 THROUGH BANKING CHANNELS,THAT IN SUCH CASES SOMETHI NG MORE WAS REQUIRED TO HOLD IT BOGUS TRANSACTION,THAT THE AO HAD NEVER CONFRONTED THE AS SESSEE THE INFORMATION THAT WAS RECEIVED FROM STD.REFERRING TO THE CASE OF CHIRANJILAL STEEL ROLLNG MILLS LTD.(84ITR222),HE HELD THAT THE INFORMATION RECEIVED FROM STD WAS OF GENERAL NATURE .FINALLY,HE ALLOWED THE APPEAL FILED BY THE ASSESSEE. 4 .BEFORE US,THE THE DEPARTMENTAL REPRESENTATIVE(DR)S UPPORTED THE ORDER OF THE AO.THE AUTHORISED REPRESENTATIVE (AR) STATED THAT THE AO H AD NOT PROVED THAT ENTRIES WERE NOT GENUINE,THAT THE ASSESSEE HAD PROVIDED ALL THE NECE SSARY DETAILS WITH REGARD TO THE TRANSACTION TO THE AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT THE AO RECEIVED CERTAIN PIECES OF INFORMATION FROM THE STD ,THAT AS PER THE INFORMATION JE WAS SUPPLYING BOGUS BILLS,THAT THE AO DID NOT SUPPLY TH E COPY OF THE STATEMENT OF JE TO THE ASSESSEE AND NEITHER MADE HIM AVAILABLE FOR CROSS EXAMINATIO N,THAT THE ASSESSEE HAD FILED ALL THE DETAILS FROM PLACING OF ORDER TO THE RECEIPT OF FINAL BILLS BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS, THAT THE ASSESSEE HAD DISCHARGED THE O NUS CAST UPON IT,THAT AFTER THAT THE AO DID NOT MAKE ANY INQUIRIES,THAT THE ASSESSEE HAD NOT REJECT ED THE BOOKS OF ACCOUNTS OF THE ASSESSEE ,THAT HE HAD ACCEPTED THE SALE MADE BY THE ASSESSEE.IN OU R OPINION THE AO HAD VIOLATED THE BASIC PRINCIPLES OF NATURAL JUSTICE AND THE FAA HAD RIGHT LY HELD THAT ADDITION MADE BY THE AO WOULD FALL IN THE CATEGORY OF ADDITION MADE BEHIND THE BA CK OF THE ASSESSEE. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NIKUNJ EXIMP ENTERPRISES LTD.( 372ITR619) HAS HELD THAT IF THE AO ACCEPTS THE SALES AS GENUINE,THERE CANNOT BE ANY JUSTIFICAT ION IN REJECTING THE PURCHASES.INFORMATION RECEIVED FROM STD WAS A GOOD STARTING POINT FOR FUR THER INVESTIGATION.BUT,THE AO STOPPED AT THAT POINT ITSELF AND DID NOT BRING ON RECORD ANYTHING T HAT COULD REBUT THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE.IN OUR OPINION,ADDITION MA DE BY THE AO WAS JUSTIFIABLY DELETED BY THE FAA.THEREFORE, CONFIRMING HIS ORDER,WE DECIDE EFFEC TIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE AO STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT O N 1 ST JANUARY, 2016. 01 , 2016 SD/- SD/- ( / JOGINDER SINGH) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /MUMBAI, /DATE 01.01.2016 . . . .. . JV.SR.PS. 4065/M/14-ASPEE AGRO-10-11 3 / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , /ITAT, MUMBAI.