NOBLE PUBLICITY SERVICES P.LTD, MUMBAI V. DCIT RG 9(2), MUMBAI

ITA 4589/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3906 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 04-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHIVAJI B GHODE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI B BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 4589/MUM/2014 (ASSESSMENT YEAR:2010-11) M/S. NOBLE PUBLICITY SERVICES PVT. LTD., 101/102, HETAL ARCH, 1 ST FLOOR, S. V. ROAD, OPP. NATRAJ MARKET, MALAD (WEST), MUMBAI 400 064 APPELLANT VS. DY. COMMISSIONER OF INCOME TAX, RANGE 9 (2), MUMBAI RESPONDENT PAN: AAACN1682J /BY APPELLANT : SHRI HARESH P. SHAH, A.R. /BY RESPONDENT : SHRI SHIVAJI B. GHODE, D.R. /DATE OF HEARING : 02.08.2016 /DATE OF PRONOUNCEMENT : 08.08.2016 ORDER ITA NO.4589/MUM/14 A.Y. 10-11 [M/S. NOBLE PUBLICITY SERVICES P. LTD. VS. DCIT] PAGE 2 PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-20, MUMBAI, DA TED 29.04.2014 FOR A.Y. 2010-11 ON FOLLOWING GROUND: 1. THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITIO N OF RS.1,55,27,483/- BEING TRADING PURCHASES FROM 5 PARTIES STATING THAT THE APPELLANT HAS FAILED TO P RODUCE THESE PARTIES EVEN AFTER SPECIFIC REQUEST BY THE ASSESSING OFFICER, HENCE NO JUSTIFICATION CAN BE GI VEN FOR GREY MARKET BUSINESS OR BLACK TRANSACTION OR HAWALA ENTRY TRANSACTIONS OR SUCH BILL PROVIDING BUSINESS DONE ON THE BASIS OF COMMISSION BUT FAILE D TO APPRECIATE THAT SUSPICION HOWEVER STRONG MAY BE BUT IT CANNOT PARTAKE THE CHARACTER OF PROOF WHICH WAS SUBMITTED TO THE AO & LD. CIT(A) IN THE COURSE OF PROCEEDING. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) ERRED IN CONSIDERING THE PURCHASES AS BOGUS, MERELY BECAUSE APPELLANT FAILED TO PRODUCE PARTIES EVEN AF TER SPECIFIC REQUEST BY ASSESSING OFFICER BUT FAILED TO APPRECIATE THAT 2.1 APPELLANT IS DEALING WITH MORE THAN 100 PARTIES . HENCE IT WAS BEYOND THE CONTROL OF APPELLANT TO PRODUCE THE MARKET PARTIES AFTER A PERIOD OF MORE THAN 3 YEARS FROM DATE OF TRANSACTION. 2.2 APPELLANT BEING TRADER, RELATIONSHIP WITH PARTI ES OF PURCHASE & SALES ARE TRANSACTIONS BASED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LD. CIT(A) ERRED IN CONFIRMING ENTIRE DISALLOWANCE OF PURCHASE S OF RS.1,55,27,483/- BUT FAILED TO APPRECIATE THAT 3.1 APPELLANT HAS TRADED IN ADVERTISING MATERIALS HENCE FOR PURCHASE OF GOODS THERE WAS CORRESPONDING SALES OF GOODS AND SALE OF GOODS ITA NO.4589/MUM/14 A.Y. 10-11 [M/S. NOBLE PUBLICITY SERVICES P. LTD. VS. DCIT] PAGE 3 WAS SUPPORTED BY CORRESPONDING PURCHASE. HENCE IF PURCHASE IS BOGUS AND TO BE ADDED TO INCOME IN THAT CASE CORRESPONDING SALES OF GOODS WILL BE IMPOSSIBLE/TO BE REDUCED FROM SALES/INCOME AS PER NORMAL ACCOUNTING PRINCIPLES/NATURAL JUSTICE. 3.2 THE APPELLANT PRODUCED PROPER QTY. RECORDS OF PURCHASES OF GOODS & CORRESPONDING SALES OF GOODS & FURTHER THE ASSESSING OFFICER HAS ALSO ACCEPTED IN PRINCIPLE THE QUANTITATIVE STOCK RECORDS & MARKED THEM ANNEXURE A-B-C TO THE ORDER AT PAGE 9. 3.3 IT IS NOT A CASE OF CLAIMING OF DEDUCTION OF EXPENSES BUT AGAINST PURCHASES OF RS. 1,55,27,483 THERE IS CORRESPONDING SALES OF RS.1,58,06,279 AND BALANCE RS.2,78,796 OFFERED FOR TAX. 2. ASSESSING OFFICER MADE ADDITION ON ACCOUNT OF BO GUS PURCHASES OF RS.1,55,27,483/-. ASSESSING OFFICER N OTED THAT ASSESSEE HAS SHOWN PURCHASES FROM FOLLOWING PARTIES BUT HAS NOT PROVED THE ACTUAL PURCHASES:- 1) M/S. OM CORPORATION 2) JIGAN ENTERPRISES 3) PARSHVA & COMPANY 4) AMAR ENTERPRISES 5) BIG TRADE AGENCY SO, HE MADE ADDITION OF ABOVE AMOUNT BEING UNPROVED PURCHASES. ITA NO.4589/MUM/14 A.Y. 10-11 [M/S. NOBLE PUBLICITY SERVICES P. LTD. VS. DCIT] PAGE 4 2.1 MATTER WAS CARRIED BEFORE THE FIRST APPELLATE A UTHORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) CONFIRMED TH E ADDITION IN QUESTION. 2.2 SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF AS SESSEE. BEFORE US, LD. AUTHORIZED REPRESENTATIVE DREW OUR A TTENTION TO PAGE NO.27 OF PAPER BOOK INTER ALIA DETAILED INVOIC ES OF JIGNA ENTERPRISES WHICH HAS PHONE NO., DETAILS OF ITEMS, DETAILS OF VAT AND DETAILS OF CST. THE STAND OF ASSESSEE HAS BEEN THAT IN SPITE OF DETAILS OF INVOICE HAVING PHONE NO. OF PARTIES AND THEIR VAT, CST DETAILS THEREOF, ASSESSING OFFICER W AS HAVING OPTION TO MAKE ENQUIRIES FROM ASSESSEE FROM PHONE N O. MENTIONED ABOVE. ASSESSING OFFICER HAD OPTION TO VE RIFY THE FACTS WITH REGARD TO TRANSACTIONS FROM DETAILS OF V AT AND CST. IT HAS NOT BEEN DONE IN SPITE OF VAT AND CST NO. DE TAILED AS UNDER: VAT TIN NO. 27560404324 V W.E.F. DT. 1-4-2006 CST TIN NO. 27560404324 V W.E.F. DT. 1-4-2006 ACCORDING TO US, IT IS A CASE OF INSUFFICIENT ENQUI RIES ON THE PART OF ASSESSING OFFICER BEFORE REACHING CONCLUSION AGA INST ASSESSEE. THE TRANSACTION SHOULD NOT BE DISBELIEVE D IN ABSENCE OF INCOMPLETE ENQUIRIES AT THE END OF ASSES SING OFFICER AS DISCUSSED ABOVE. SO, IN THE INTEREST OF JUSTICE , WE SET ASIDE THE ISSUE TO ASSESSING OFFICER WITH DIRECTION TO SE T ASIDE THE SAME AS PER ABOVE DISCUSSION AND AS PER FACT AND LA W AFTER ITA NO.4589/MUM/14 A.Y. 10-11 [M/S. NOBLE PUBLICITY SERVICES P. LTD. VS. DCIT] PAGE 5 PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSE E. SINCE, WE RESTORE THE MATTER ON PRELIMINARY ISSUE AS DISCU SSED ABOVE, WE ARE REFRAINING TO COMMENT ON MERIT OF ISSUE AT H AND. 3. IN THE RESULT, THE APPEAL FILED BY ASSESSEE IS A LLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON THIS THE 08 TH DAY OF AUGUST, 2016. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 09/08/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- 1. / REVENUE 2. / ASSESSEE 3. / CONCERNED CIT 4. - / CIT (A) 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. BY ORDER / , / , ,