ACIT 12(1), MUMBAI V. K.J CONSTRUCTION COMPANY, MUMBAI

ITA 4740/MUM/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3342 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-06-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 13-05-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 13-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MORYA PRATAP
• Assessee Lawyers: RAHUL K HAKANI
• Keywords: Bogus purchase; Difference of opinion; Tax effect; Change of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI R.C.SHARMA (AM) AND SHRI RAM LAL NEGI ( JM) ITA NO. 4740/MUM/2011 ASSESSMENT YEAR: 2003-04 THE A CIT, 1 2 ( 1 ) ROOM NO. 117, AAYAKAR BHAVAN, M.K.MARG, MUMBAI- 400020. VS. M/S. K.J. CONSTRUCTION COMPANY, 7, PROSPECT HOUSE, 29, RAGHUNATH DADAJI STREET, FORT, MUMBAI- 400001. PAN- AAAFK1028Q (APPELLANT) (RESPONDENT) & CO NO. 160/MUM/2012 (ITA NO. 4740/MUM/2011) ASSESSMENT YEAR: 2003-04 M/S. K.J. CONSTRUCTION COMPANY, ( NOW KNOWN AS K.J. INFRASTUCTURE PVT. LTD. 7, PROSPECT HOUSE, 29, RAGHUNATH DADAJI STREET, FORT, MUMBAI- 400001. PAN- AAAFK1028Q VS. THE ACIT, 12(1) ROOM NO. 117, AAYAKAR BHAVAN, M.K.MARG, MUMBAI- 400020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. MORYA PRATAP RESPONDENT BY : SHRI. RAHUL K. HAKANI DATE OF HEARING: 02/06/2016 DATE OF PRONOUNCEMENT: 02/06/2016 O R D E R PER RAM LAL NEGI, JM THE PRESENT APPEAL ITA NO 4740/MUM/2011 HAS BE EN PREFERRED BY THE REVENUE AGAINST ORDER DATED 31/03/2011 PASSED BY TH E LD. CIT(A)-23, MUMBAI FOR THE ASST. YEAR 2003-04. 2 ITA NO. 4740/MUM/2011 & CO NO. 160/M/2012 ASSESSMENT YEAR: 2003-04 THE ASSESSEE HAS ALSO FILED CROSS APPEAL NO CO 160 /M/2012. SINCE BOTH THE APPEAL AND CROSS APPEAL PERTAIN TO THE SAME ASSESSE E FOR THE SAME ASSESSMENT YEAR, BOTH WERE CLUBBED AND HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 4740/MUM/2011 A.Y. 2003-04 1. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER DA TED 31/03/2011 PASSED BY THE LD. CIT(A) ON THE FOLLOWING EFFECTIVE GROUND S:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 20 ,29,209/- ON BOGUS PURCHASE TREATING THE EXPENDITURE NOT INCURRED FOR THE PURPOSE OF BUSINESS. 1(A). WHILE DOING SO THE LD. CIT(A) HAS NOT DELIBER ATED UPON THE ASSESSING OFFICER S OBSERVATION OF GENUINENESS OF PURCHASE IN TERMS OF HOW THE GOODS WERE TRANSPORTED, STORED, LORRY RE CEIPTS, DELIVERY CHALLANS ETC. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(AP PEALS) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSIN G OFFICER BE RESTORED. 2. AT THE OUTSET, THE LD. AUTHORISED REPRESENTATI VE OF THE ASSESSEE POINTED OUT THAT THE TAX INVOLVED IN THIS CASE IS BELOW RS. 10, 00,000/-. AS PER THE LATEST CBDT CIRCULAR NO. 21 OF 2015, DATED 10 TH DECEMBER, 2015, NEW GUIDELINES OF MONETARY LIMIT FOR FILING OF APPEALS BY THE DEPARTM ENT HAS BEEN ISSUED, WHEREBY THE TAX EFFECT FOR FILING OF APPEAL BEFORE THE ITAT HAS BEEN PRESCRIBED AS AMOUNT EXCEEDING RS. 10 LAKHS. IN THE SAID CIRCU LAR, IT HAS BEEN SPECIFICALLY 3 ITA NO. 4740/MUM/2011 & CO NO. 160/M/2012 ASSESSMENT YEAR: 2003-04 CLARIFIED THAT THE SAID INSTRUCTION WILL APPLY RETR OSPECTIVELY TO ALL THE PENDING APPEALS. THE LD. DR. DID NOT RAISE ANY OBJECTION. IN VIEW OF THE SAID CIRCULAR, THE APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE . WE, THEREFORE, DISMISS THE SAME IN LIMINE . CO 160/MUM/2012. THE ASSESSEE HAS FILED THE PRESENT CROSS OBJECTION ON THE FOLLOWING GROUNDS:- 1. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HAT THE REOPENING IS BAD IN LAW AS THE SANCTION OF COMMISSIONER OF CH IEF COMMISSIONER IS NOT OBTAINED U/S 151 OF THE INCOME TAX, 1961 AS THE REOPENING IS BEYOND 4 YEARS AND THE ORIGINAL AS SESSMENT IS MADE U/S 143(3). 2. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING T HAT THE REOPENING IS BAD IN LAW AS THERE IS A CHANGE OF OPINION AS TH E ORIGINAL ASSESSMENT WAS MADE U/S. 143(3) AND ASSESSEE HAS SU BMITTED ALL DETAILS RELATING TO M/S. PRATIK SALES CORPORATION A ND NO ADDITION WAS MADE THEREON. 3. THE LEARNED CIT(A) ERRED IN NOT APPRECIATING TH AT THE REOPENING IS BAD IN LAW AS THERE ARE NO RECORDED REASONS AND THE REASONS FOR REOPENING SUPPLIED TO THE ASSESSEE WERE ONLY SUMMAR Y OF PURPORTED RECORDED REASONS. MERITS 4. THE LEARNED CIT(A) RIGHTLY DELETED THE ADDITION AS THE ENTIRE BUILDING MATERIAL SUPPLIED BY M/S. PRATIK SALES COR PORATION WAS 4 ITA NO. 4740/MUM/2011 & CO NO. 160/M/2012 ASSESSMENT YEAR: 2003-04 CONSUMED DURING THE YEAR AND THE GROSS PROFIT RATI O AND NET PROFIT RATIO OF THE RELEVANT YEAR IS CONSISTENT WITH EARLI ER AND LATER YEARS. 2. SINCE WE HAVE ALREADY DISMISSED THE APPEAL FILE D BY THE REVENUE, THE PRESENT CROSS OBJECTION OF THE ASSESSEE HAS BECOME INFRUCTUOUS AND THE SAME IS THEREFORE DISMISSED. IN THE RESULT, THE APPEAL FILED BY THE DEP ARTMENT AND CROSS OBJECTION FILED BY THE ASSESSEE FOR THE A.Y. 2003-04 ARE DISM ISSED. ORDER PRONOUNCED IN THE OPEN COU RT ON 2 ND JUNE, 2016 SD/- SD/- ( R.C.SHARMA ) (RAM LAL NEGI) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED: 02/06/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA