ITO, New Delhi V. M/s Sunrise Tooling System Pvt. Ltd., New Delhi

ITA 4420/DEL/2013

• Counselvise Citation: 442020114 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 07-01-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 22-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: V M CHAURASIA
• Keywords: Bogus purchase
• Section: 147; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH. B.C.MEENA, ACCOUNTANT MEMBER I.T.A .NO. 4420 /DEL/201 3 (ASSESSMENT YEAR - 2 00 6 - 0 7 ) ITO, WARD - 9(3), ROOM NO. - 180, C.R.BUILDING, I.P.ESTATE, NEW DELHI. (APPELLANT) VS SUNRISE TOOLING SYSTEMS PVT. LTD., 29/7, SHAKTI NAGAR, NEW DELHI - 110007. PAN - AADCS9992D (RESPONDENT) APPELLANT BY SH.SATPAL SINGH, SR. DR RESPONDENT BY SH. V.M.CHAURASIA, ADV. ORDER PER DIVA SINGH, JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER DATED 23 . 05.2013 OF CIT(A) - X II , N EW DELHI PERTAINING TO 200 6 - 0 7 ASSESSMENT YEAR ON THE FOLLOWING GROUND: - 1. THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961, AMOUNTING TO RS.14,58,991/ - 2. RIGHT AT THE OUTSET IT WAS SUBMITTED BY THE LD. AR THAT THE POINT AT ISSUE IS FULLY COVERED IN ASSESSEE S FAVOUR IN VIEW OF THE FACT THAT THE APPEAL OF THE ASSESSEE IN THE QUANTUM PROCEEDINGS WAS ALLOWED BY THE ITAT VIDE ITS ORDER DATED 30.11.2012 IN ITA NO. - 3136/DEL/2010 . C OPY OF THE SAID ORDER WAS FILED IN THE COURT. INVITING ATTENTION TO THE IMPUGNED ORDER, SPECIFIC ATTENTION WAS INVITED TO PAGE 16 - 18 WHERE COGNIZANCE WAS TAKEN OF THE FACT THAT THE ENTIRE ADDITIONS S TO OD DELETED. IN THE CIRCUMSTANCES IT WAS STATED NO CONCEALMENT WAS MADE OUT. FOR READY - REFERENCE, WE REPRODUCE THE RELEVANT PORTION FROM IMPUGNED ORDER AS UNDER: - I HAVE PERUSED THE FACTS STATED IN THE ASSESSMENT ORDER AS WELL AS THE FACTS STATED BY THE ASSESSEE IN HIS SUBMISSIONS. THE APPELLANT COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CUTTING TOOLS & AUTOMOBILES PARTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS MR. D K J AIN, THE DIRECTOR OF THE ASSESSEE COMPANY STATED BEFORE THE AO THAT THE STATEMENT RECORDED DURING 2 I.T.A .NO. - 4420/ DEL/2013 THE COURSE OF SURVEY OPERATIONS WAS GIVEN UNDER PRESSURE AND THREAT. BUT AO IGNORING THE FACTS OF THE CASE AND THE DOCUMENTS & EXPLANATIO N FILED BY THE ASSESSEE MADE AN ADDITION OF RS.43,43,495/ - TO THE INCOME OF THE ASSESSEE AND PASSED AN ORDER UNDER SECTION 147 / 143(3) WHICH WAS LATER CONFIRMED BY THE HONORBALE CIT(A) VIDE HIS ORDER DATED 22/03/2010.THE ASSESSEE WENT IN ITAT AGAINST THE OR DER OF CIT(A). THE ITAT VIDE ITS ORDER ITA NO. - 3136/DEL/2010 FOR 2006 - 07 DT. 30.11.12 HAS HELD THAT : - DATED 22/03/201 0 . THE ASSESSEE WENT IN ITAT AGAINST THE ORDER OF CIT(A). THE ITAT VIDE ITS ORDER ITA NO.3136/DEL/2010 FOR 2006 - 07 DT.30.11.12 HAS HELD T HAT: ' .WE DO NOT AGREE WITH SUCH FINDING OF THE LD.CIT(A) AS ONUS LIES ON THE DEPARTMENT TO ESTABLISH THAT THE CLAIMED PURCHASES WERE NOT GENUINE SINCE THE ALLEGATION OF BOOKS PURCHASES WAS LEVIED BY THE DEPARTMENT AND PRIMARY EVIDENCE IN THE FORM OF TH E RELEVANT DOCUMENTS WERE MADE AVAILABLE BY THE ASSESSEE IN SUPPORT OF THE GENUINENESS OF THE CLAIMED PURCHASES MADE FROM SHRI LAXMI INDUSTRIAL CORPORATION. THE ONUS TO ESTABLISH THAT THE SAME WERE BOGUS WAS THUS SHIFTED TO THE DEPARTMENT. IN ANY CASE WHEN SALES DECLARED BY THE ASSESSEE HAVE NOT BEEN DOUBTED, IT WAS NOT PROPER ON THE PART OF THE AO TO DENY THE CLAIMED PURCHASES OF THE BASIS OF WHICH SALES WERE MADE. IN SUCH CIRCUMSTANCES, ONLY OPTION IF ANY WAS AVAILABLE WITH THE DEPARTMENT WAS TO ESTIMATE THE INCOME DURING OF ASSESSEE THE YEAR ON THE BASIS OF TRADING RESULT OF EARLIER THREE YEARS, MADE AVAILABLE THE AT PAGE NO - 38 OF THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE SAME HAS BEEN RE - PRODUCED HEREINABOVE IN THE PRECEDING PARAGRAPH. ON PERU SAL OF WHICH WE FIND THAT DURING THE YEAR THE ASSESSEE HAS SHOWN BETTER GROSS PROFIT AT A BETTER GP RATE OF 27.67 % IN COMPARISON TO THE GP PROFIT AND GP RATES OF EARLIER TWO AYS. IN THE AY 2005 - 06, THE ASSESSES HAS SHOWN GP RATE ON 25.67% AND IN AY 2004 - 0 5, THE GP RATE SHOWN IS 25.47%. SINCE THE ASSESSEE HAS SHOWN BETTER GP RATE DURING THE YEAR, WE FIND THAT THERE IS NO JUSTIFICATION TO MAKE ADDITION EVEN ON THIS ACCOUNT. WE THUS WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE DIRECT T HE AO TO DELETE THE ADDITION IN QUESTION AT RS.43,34,4961 - MADE BY THE AO ON ACCOUNT OF THE ALLEGED BOGUS PURCHASES MADE FROM SHREE LAXMI INDUSTRIES CORPORATION. THE ISSUE IS THUS DECIDED IN FAVOUR OF THE ASSESSEE REGARDING THE VALIDITY OF THE SAID ADDITI ON. THE GROUND NO. 3 - 8 INVOLVING THE ISSUE ARE THUS ALLOWED .. ' 3. CONSIDERING THIS ON PAGE 18 THE FOLLOWING CONCLUSION WAS ARRIVED AT: - IN VIEW OF THE ABOVE STATED FACTS, IT IS CLEAR THAT THE ITAT HAS DECIDED THE QUANTUM APPEAL IN FAVOUR OF ASSESSEE. WHEN THE QUANTUM APPEAL HAS BEEN DECIDED IN FAVOUR OR THE ASSESSEE , THERE IS NO QUESTION OF CONCEALMENT PENALTY. THE ASSESSEE HAS NEITHER FURNISHED INACCURATE PARTICULARS NOR IT HAS CONCEALED ITS INCOME. THE MERE SUSPICION OF AO THAT THE ASSESSEE HAS GIV EN WRONG PARTICULARS OR CONCEALED ITS INCOME IS NO GROUND TO LEV Y THE PENALTY UNDER SECTION 271 (1)(C) OF THE ACT. HENCE FOLLOWING THE JUDGMENT TAKEN BY THE ITAT AND RELIANCE PLACED ON ABOVE CASES, I THEREFORE, DELETE THE PENALTY IMPOSED BY THE ASSESSING OFFICER OF RS 14,58,991 / - . 3 I.T.A .NO. - 4420/ DEL/2013 4. THE LD. AR FILED A COPY OF THE DECISION OF THE HON BLE HIGH COURT DATED 22.01.2014 WHEREIN THE ISSUE WAS AGITATED BEFORE THE HON BLE HIGH COURT, THE REVENUE S APPEAL WAS DISMISSED. THE LD. DR DID NOT DISPUTE THE FACTUAL POSITION. IN VIEW OF THE SAME, WE HAVE NO HESITATION I N H O L D I N G THAT T H E DEPARTMENT S APPEAL DOES NOT HAVE ANY MERIT. THE FINDING ARRIVED AT BY THE LD. CIT(A) IS UPHELD AND THE DEPARTMENTAL APPEAL IS DISMISSED. 5 . IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 9 T H OF JANUARY 2015 . S D / - S D / - ( B.C.MEENA ) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 9 / 01 /201 5 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI