Smt. Mamta Luniya, JODHPUR V. ITO, JODHPUR

ITA 477/JODH/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5230 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-03-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 16-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S L MOURYA
• Assessee Lawyers: R R SI NGHVI
• Keywords: Bogus purchase
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 477 / JODH /201 5 (ASST. YEAR : 200 7 - 0 8 ) SMT. MAMTA LUNIYA, PROP. M/S. MAHARAJA EMPORIUM , B - 32, SHASTRI NAGAR, JODHPUR . VS. ITO, WARD - 1(3), JODHPUR PAN NO. ABJPL 2686 F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI R.R. SINGHVI ADV. DEPARTMENT BY : S HRI S.L. MOURYA - DR DATE OF HEARING : 1 0 / 0 3 /201 6 . DATE OF PRONOUNCEMENT : 1 0 / 03 /201 6 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 1 , JODHPUR , DATED 2 0 /0 7 /201 5 . 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT THE AUTHORITIES BELOW HAVE GROSSLY ERRED IN HOLDING THAT THE ALLEGED PURCHASES MADE FROM THE SAID M/S. RAJAT GEMS , JAIPUR IS BOGUS AND THEREBY ALSO ERRED IN MAKING AN ADDITION OF RS. 1,97,980/ - TO THE TURNED INCOME OF RS. 1,10,385/ - . THE ADDITION BEING ILLEGAL AND BAD IN THE LAW DESERVES TO BE DELETED. 2. THAT THE ACTION UNDER SEC. 147 OF THE IT ACT HAS WRONGLY BEEN INITIATED IN THE PRESENT CASE AND THE NOTICE ISSUED UNDER SEC. 148 IS ILLEGAL, BAD IN LAW AND IS AG A IN S T THE FACT AND CIRC U MSTA N CES OF THE CASE. 3. THAT THE APPELLANT CRAVES LEAVE TO AMEND ALTER OR TO ADD ANY OF GROUNDS OF APPEAL HEREIN ABOVE, AT THE TIME OF HEARING OF THIS 2 ITA NO. 477/JODH/2015 APPEAL OR BEFORE SUCH HEARING AS THE CIRCUMSTANCES MAY REQUIRE TO DO SO. 3 . IN GROUND NO.2 OF THE APPEAL, THE ASSESSEE HAS CHALLENGED THE REOPENING OF THE ASSESSMENT BY ISSUANCE OF NOTICE UNDER SEC. 148 OF THE ACT. 4 . BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF HANDICRAFT ITEMS . SHE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007 - 08 WHICH WAS PROCESSED UNDER SEC. 143(1). SUBSEQUENTLY , THE CASE WAS REOPENED BY ISSUE OF NOTICE UNDER SEC. 148 ON 08/07/2010 ON THE GROUND T H A T INFORMATION , REGARDING BOGUS PURCHASES , RECEIVED FROM DIRECTORATE OF INCOME - TAX (INV . ), JAIPUR VIDE HIS LET T ER NO. 1176 DATED 26/11/2008 FORWARDED TO HIM VIDE CIT - 1, JODHPURS LETTER NO. 285 DATED 31/05/2010 . 5. THE ASSESSEE CHALLENGED THE REOPENING OF THE ASSESSMENT BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) AND COMMISSIONER OF INCOME TAX (APPEALS) DISMISSED THE GROUND OF APPEAL OF THE ASSESSEE BY OBSERVING THAT THE ASSESSING OFFICER ISSUED NOTICE UNDER SEC. 148 OF THE ACT ON THE BASIS OF INFORMATION RECEIVED FROM THE ADI WING, JAIPUR . THE ASSESSEE HAS CONTENDED, RELYING ON THE CASE OF CIT VS. KAMDHENU STEEL & ALLOYS L TD. & ORS . (2012) 248 CTR 33 THAT NOTICE ISSUED MERELY ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING IS INVALID . HE FOUND NO MERITS IN THIS CONTENTION OF THE ASSESSEE AND HELD THAT THE ASSESSING OFFICER HAS ISSUED A VALID NOTICE UNDER SEC. 148 OF THE ACT ON THE B A SIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING, JAIPUR. 6 . BEING AGGRIEVED BY THIS ORDER, THE ASSESSEE IS IN APPEAL BEFORE UNDER SEC. AUTHORIZED REPRESENTATIVE OF T HE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) . 3 ITA NO. 477/JODH/2015 7 . DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 8. WE FIND THAT THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF ADANI EXPORTS VS. DCIT (240 ITR 224) HAS HELD T H A T THE POWER TO REOPEN THE ASSESSMENT IS CONFINED ONLY TO THE ASSESSING OFFICER UNDER THE ACT, SO , HE IS THE SUPREME AUTHORITY FOR DECIDING A FIRM BELIEF AS TO ESCAPEMENT OF INCOME. WHI LE F I RMING SUCH BELIEF, THE ASSESSING OFFICER HAS NO AUTHORITY TO SURRENDER OR ABDICATE HIS FUNCTION TO HIS SUPERIORS NOR THE SUPERIORS CAN ARROGATE TO THEMSELVES SUCH AUTHORITY . THEREFORE, IF IN THE INDEPENDENT OPINION OF THE ASSESSING OFFICER THAT THERE IS NO ESCA PEMENT OF INCOME , BUT NOTICE UNDER SEC. 148 ISSUED BY HIM AS INSTRUCTED BY HIS SUPERIOR AUTHORITY, THEN THE IMPUGNED NOTICE HAS TO BE QUASHED. FURTHER , THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. SFIL STOCK BROKING LTD. [2010] 325 ITR 285 (DELHI) HAS HELD THAT THE ASSESSING OFFICER CAN N OT REOPEN THE ASSESSMENT MERELY ON THE BASIS OF INFORMATION RECEIVED WITHOUT APPLYING HIS MIND TO THE INFORMATION AND F O RMING A OPINION THE REASONS MUST SHOW DUE APPLICATION OF MIND TO THE INFORMATION . HE ALSO CANNOT REOPEN MERELY BECAUSE HE HAS BEEN DIRECTED TO DO SO BY A SUPERIOR OFFICER . IN THE INSTANT CASE, THE ASSESSING OFFICER HAS RECORDED THE FOLLOWING REASONS FOR REOPENING OF THE ASSESSMENT : - IN THIS CASE RETURN OF INCOME WAS FILED ON 31.10.2007 VIDE ACKNOWLEDGEMENT, NO. 10025771 AND PROCESSED U/S. 143(1) ON 15.12.2007. THE ASSESSEE IS PROPRIETOR OF MAHARAJA EMPORIUM*. IN THIS CASE INFORMATION REGARDING BOGUS PURCHASES HAS BEEN R ECEIVED FROM D IRECTOR INCOME TAX (INV. ) , JAIPUR VIDE HIS LETTER NO. 1176 DATED 26.11,2008, FORWARDED TO THIS OFFICE VIDE CIT - 1. JODHPURS LETTER NO. 285 DATED 31.05.2010. ACCORDING TO THE ABOVE REFERRED LETTER OF DIT (INV.), JAIPUR, SURVEY U/S 133 A OF THE INCOME TAX AC T WERE CARRIED OUT IN THE MONTH OF MARCH 2008, AT VARIOUS PREMISES OF THE CONCERNS WHICH 4 ITA NO. 477/JODH/2015 PROVIDE BOGUS PURCHASE BILLS TO INTERESTED PARTIES. IN COURSE OF THESE SURVEY OPERATIONS MOST OF THE PERSONS RUNNING THESE CONCERNS ADMITTED IN THEIR SWORN STATEMENTS THAT THEY WERE NOT DOING ANY ACTUAL BUSINESS & WERE ONLY ISSUING BOGUS BILLS OF GEMS, GOLD/SILV ER JEWELLERY, FABRICS, ETC, TO TH E INTERESTED PARTIES ON PAYMENT OF COMMISSION RANGING BETWEEN 0.20% TO 1% OF THE AMOUNT OF BOGUS SALE BILLS ISSUED BY THEM. THE KEY PERSONS OF THE ABOVE MENTIONED GROUPS WHO RUN THE WHOLE BUSINESS OF PROVIDING BOGUS BILLS CATEGORICALLY STATED IN THEIR STATEMENT RECORDED THAT ACTUALLY NO PHYSICAL DELIVERY OF THE GOODS WAS BEING GIVEN AGAINST THESE BI LLS AND AFTER RECEIVING THE CHEQU E OF EQUAL AMOUNT FROM INTERESTED PARTIES, CASH WAS BEING REMITTED TO THEM AFTER MAKING CASH WITHDRAWALS FROM THE BANKS ACCOUNTS, WHERE THESE CHEQUES WERE DEPOSITED. AS PER THE LIST OF BENEFICIARIES ENCLOSED WITH THE ABOVE REFERRED LETTER, DETAILS OF ENTRY AT SR. NO . 4 ARE AS UNDER : NAME OF TH E ACCOUNT HOLDER (DRAWER ) : MAHARAJA EMPORIUM ADDRESS OF THE ACCOUNT HOLDER : 1 & 2, MANJI KA HATTA, POATA, JODHPUR, RAJAS THAN . CITY : JODHPUR ACCOUNT NO. FROM WHICH CHEQUE HAS BEEN ISSUED : 057010200009195 BANK MICR CODE : 302211002 NAME OF BANK : AXIS BANK ADDRESS OF BANK BRANCH : C SCHEME, JAIPUR. DATE : 01/15/2007 CHEQUE NO. : 126916 AMOUNT : RS. 197980.00 ACCOUNT NO. IN WHICH THE CHEQUE HAS BEEN DEPOSITED : 106102000018939 (ACCOUNT OF ENTRY PROVIDER) NAME OF THE ACCOUNT HOLDER : RAJAT GEMS (ENTRY PROVIDER) FROM THE ABOVE DISCUSSION AND FACTS IT IS CLEAR THAT THE PURCHASES FOR THE A.Y. 2007 - 08 INCLUDES AN AMOUNT OF RS.1,97,980.00/ - WHICH IS A BOGUS PURCHASE. IT CLEARLY IMPLIES THAT TRADING ACCOUNT OF MAHARAJA EMPORIUM FOR THE F.Y. HAS BEEN WRONGLY DEBITED BY AN AMOUNT OF RS. 1,97,980.00/ - WHICH IS A BOGUS PURCHASE, CONSEQUENT ON THE ABOVE THE PROFIT HAS BEEN SUPPRESSED BY AT LEAST RS 1,97,980.00/ - . KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES AS DISCUSSED ABOVE AND DOCUMENTS PRESENT ON RECORD I HAVE REASONS TO BELIEVE THAT THE INCOME TO THE TUNE OF RS 1 , 97,980.00/ - CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE A.Y. 2007 - 08, FOR WHICH 5 ITA NO. 477/JODH/2015 PROCEEDINGS U/S 147 ARE BEING I N IT I ATED. ISSUE NOTICE U /S 148 OF THE INCOME TAX ACT , 1961, TODAY I.E. 8 TH JULY, 2010 . A READING OF THE ABOVE REASONS SHOWS THAT THE ASSESSING OFFICER HAS REOPENED THE ASSESSMENT ON THE BASIS OF INFORMATIO N RECEIVED FROM THE DIRECTORATE OF INCOME - TAX (INV.) , JAIPUR . HE HAS NOT FORMED HIS INDEPENDENT OPINION REGARDING THE ESCAPEMENT OF INCOME B Y THE ASSESSEE . THEREFORE, THE DECISION OF THE HON'BLE GUJARAT HIGH COURT AND THE DELHI HIGH COURT SQUARELY APPLIES TO THE CASE OF THE ASSESSEE. HENCE, FOLLOWING THE SAME, WE HOLD THE REOPENING OF THE ASSESSMENT BY THE ASSESSING OFFICER IS BAD IN LAW AND CONSEQUENTLY , QUASH THE ASSESSMENT ORDER PASSED UNDER SEC. 14 7 /143(3) OF THE ACT DATED 21/12/2011 AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE. 9. AS WE HAVE QUASHED THE ASSESSMENT ORDER WHILE DECIDING THE GROUND NO. 2 O F THE APPEAL OF THE ASSESSEE, THE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE ON MERITS HAVE BECOME INFRUCTUOUS AND ARE NOT BEING ADJUDICATED BY US. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON THURSDAY , THE 1 0 TH DAY OF MARCH , 201 6 AT JODHPUR . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER D ATED : 1 0 TH MARCH , 201 6 . VR/ - COPY TO: 1. THE ASSESS E E. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R . 6. GUARD FILE. BY ORDER