M/s. Unifabrics India Pvt.Ltd., Surat V. The Income tax Officer,Ward-4(4), Surat

ITA 4147/AHD/2007

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8909 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-02-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 19-11-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Assessee Lawyers: HARDIK BORA
• Keywords: Bogus purchase
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL : A BENCH : A HMEDABAD (BEFORE HONBLE SHRI G.D. AGRAWAL, VICE-PRESIDENT(A Z) & HONBLE SHRI T.K. SHARMA, J.M.) I.T.A. NO. 4147/AHD./2007 ASSESSMENT YEAR : 2001-2002 UNIFABRICS INDIA PVT. LTD., SURAT -VS. - INCOME TAX OFFICER, WARD-4(4), SURAT (PAN : AAACV 4352 J) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARDIK BORA RESPONDENT BY : SHRI GOVIND SINGHAL, S R. D.R. O R D E R PER SHRI T.K. SHARMA, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER DATED 16.08.2007 OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-I, SURAT CONFIR MING THE ACTION OF A.O. IN MAKING THE DISALLOWANCE OF RS.10,38,000/- ON ACCOUNT OF ALLEGE D JOB WORK EXPENSES. 2. AT THE TIME OF HEARING, ON BEHALF OF ASSESSEE SH RI HARDIK BORA APPEARED AND STATED THAT IN THIS CASE ORIGINAL ASSESSMENT WAS FINALIZED UNDER S ECTION 143(3) ON 31.12.2003 DETERMINING TOTAL INCOME AT RS.39,38,410/-. IN THE ORIGINAL ASSESSMEN T ORDER, THE A.O. MADE THE ADDITION OF RS.39,77,781/- ON ACCOUNT OF BOGUS PURCHASES. SUBSE QUENTLY, ORIGINAL ASSESSMENT WAS REOPENED BY ISSUING NOTICE UNDER SECTION 148. THE REASONS FO R REOPENING OF THE ASSESSMENT WERE THAT THE ADDITION OF RS.39,77,781/- MADE ON ACCOUNT OF BOGUS PURCHASES INCLUDES PURCHASE OF GREY CLOTH OF RS.23,61,341/-. ON GREY CLOTH PURCHASES, THE ASS ESSEE INCURRED RS.10,38,000/- IN RESPECT OF JOB WORK CHARGES. IN THE ORIGINAL ASSESSMENT, THE BOGUS PURCHASE WAS DISALLOWED BUT THE CONSEQUENT EXPENSES I.E. JOB WORK CHARGES OF RS.10,38,000/- WE RE NOT DISALLOWED. TO DISALLOW THE JOB WORK CHARGES ON BOGUS PURCHASES, THE ASSESSMENT WAS REOP ENED. THEREAFTER, THE A.O. FRAMED THE ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 1 47 ON 13.11.2005, WHEREIN HE DISALLOWED THE JOB WORK CHARGES OF RS.10,38,000/-. 2 ITA NO. 4147/AHD/2007 3. ON APPEAL, IN THE IMPUGNED ORDER, THE LEARNED CO MMISSIONER OF INCOME TAX(APPEALS) UPHELD THE ACTION OF A.O. DISALLOWING THE JOB WORK CHARGES. 4. AGGRIEVED BY THIS ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), THE ASSESSEE IS IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING, SHRI HARDIK BORA APPEARI NG ON BEHALF OF THE ASSESSEE CONTENDED THAT DISALLOWANCE OF BOGUS PURCHASE IS DELETED BY T HE ITAT, D BENCH VIDE ORDER DATED 06.03.2009 IN ITA NO. 1715/AHD/2004 IN ASSESSEES O WN CASE FOR THE ASSESSMENT YEAR 2001-02. CONSEQUENTLY NO DISALLOWANCE OF JOB WORK CHARGES ON BOGUS PURCHASES CAN BE MADE. 6. SHRI GOVIND SINGHAL, SR. D.R. APPEARED ON BEHALF OF THE REVENUE AND COULD NOT CONTROVERT THE AFORESAID SUBMISSIONS OF THE LD. COU NSEL OF THE ASSESSEE. 7. HAVING HEARD BOTH THE SIDES, WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISION DATED 06.03.2009 OF T HIS TRIBUNAL IN ITA NO. 1715/AHD/2004 (SUPRA). WE FIND THAT THE ITAT, D BENCH VIDE ORDE R DATED 06.03.2009 IN ITA NO. 1715/AHD/2004 AGAINST THE ORIGINAL ASSESSMENT ORDER DELETED THE ADDITION OF RS.39,77,681/- MADE BY THE A.O. ON ACCOUNT OF BOGUS PURCHASES AND UPHOLD THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS). IN THE RE-ASSESSMENT FRAMED ON 13.11.2005 UNDER SECTION 143(3) READ WITH SECTION 147, THE A.O. DISALLOWED THE JOB WORK CHARGES OF RS.43,800/- ON ACCOUNT OF DISALLOWANCE OF BOGUS PURCHASES. THUS THIS DISALLOW ANCE OF JOB WORK CHARGES IS CONSEQUENTIAL TO THE DISALLOWANCE OF BOGUS PURCHASES OF RS.39,77,681 /- IN THE ORIGINAL ASSESSMENT. SINCE IN APPEAL AGAINST THE ORIGINAL ASSESSMENT, THE BOGUS P URCHASES STAND DELETED, NO DISALLOWANCE OF JOB WORK CHARGES CAN BE MADE. WE ACCORDINGLY DELETE THE ADDITION OF RS.10,38,000/-. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 24.02.201 0 SD/- SD/- (G.D. AGRAWAL) (T.K. SHARMA ) VICE-PRESIDENT (AZ) JUDICIAL MEMBER DATED : 24 / 02 / 2010 3 ITA NO. 4147/AHD/2007 COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE (2) THE DEPARTMENT. 3) CIT(A) CONCERNED, (4) CIT CONCERNED, (5) D.R., ITAT, AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGISTRAR, ITAT, AHMEDABAD LAHA/SR.P.S.