SHRI GIRISH AGRAWAL, Indore V. THE ITO1(2), Indore

ITA 486/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5835 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2002-2003
• Appeal Filed On: 10-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: S S DESHPANDE
• Keywords: Bogus purchase; Unexplained expenditure

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER SHRI GIRISH AGARWAL 37 MURAI MOHALLA CHAWANI, INDORE PAN:AHAPG2634H VS. ITO WARD 1(2), INDORE APPELLANT RESPONDENT APPELLANTS BY SHRI S. S. DESHPANDE, CA RESPONDENT BY SHRI MOHD. JAVED, SR. DR DATE OF HEARING 17.08.2016 DATE OF PRONOUNCEMENT 17.08.2016 O R D E R PER O.P. MEENA ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-22, NEW DELHI HOLDING CONCURRENT JURISDICTION OVER CIT (A)-2 INDORE [HERE INAFTER REFERRED TO AS THE CIT (A)] DATED 16.02.2016. THE APPEAL PERTAI NS TO ASSESSMENT YEAR 2002-03. THIS APPEAL ARISES OUT OF DECISION IN ASSESSMENT ORDER U/S. 147/144 OF INCOME TAX ACT,1961( HEREIN AFTER R EFERRED TO AS 'THE I.T.A. NO. 486/IN/2016 ASSESSMENT YEAR: 2002-03 ITA NO.486/IND/2016AY: 02-03/GIRISH AGARWAL PAGE 2 OF 5 ACT) DATED 24.12.2007 OF ITO WARD 1(2) INDORE [HERE INAFTER REFERRED TO AS THE AO]. 2. THERE IS ONLY SINGLE GROUND, WHICH RELATES TO CONFI RMING OF ADDITION OF RS. 5, 37,996/- ON ACCOUNT OF BOGUS PUR CHASE MADE FROM SHREE GANESH TRADERS. 3. SUCCINCTLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE, AN INDIVIDUAL IS ENGAGED IN THE BUSINESS OF WHOLESALE OF FOOD GRAINS. AN INFORMATION WAS RECEIVED BY THE AO, THAT SHRI SUSHI L BANSAL, PROPRIETOR OF M/S. SHREE GANESH TRADERS, USED TO PR OVIDE BOGUS SALE BILLS AGAINST PAYMENT OF CHEQUES. THE ASSESSEE HAD MADE BOGUS PURCHASE BY PAYING CHEQUES OF RS. 2, 37,996/- DTD. 2.11.2001 AND RS. 3, 00,000/- DTD. 12.11.2001, AGGREGATING TO RS.5, 3 7,996/-. THESE WERE DEBITED AS PURCHASES IN TRADING ACCOUNT. THEREFORE , ASSESSMENT WAS REOPENED. IT WAS CLAIMED THAT ASSESSEE MADE LEG AL PURCHASE OF SOYABEAN FROM SHREE GANESH TRADERS BY PAYING ACCO UNT PAYEE CHEQUE AND IT IS REFLECTED IN BANK ACCOUNT OF BOTH PARTIES. THE AO OBSERVED THAT THE MODUS OPERANDI, THAT THE PAYMENT IS MADE BY THE BUYER PARTY THROUGH ACCOUNT PAYEE CHEQUE, IMMED IATELY THEREAFTER, I.E. ON THE SAME DAY OF CREDITING IN BA NK OR ON THE NEXT DAY CASH IS WITHDRAWN ON THE BASIS A SELF CHEQUE; A LREADY SIGNED BY SHRI SUSHIL BANSAL BY THE PARTY ISSUING THE ACCOUNT PAYEE CHEQUE OR BY A PERSON (MOSTLY EMPLOYEES) OF THE SAID ACCOUNT PAYEE CHEQUE ISSUING PARTY. IN THIS CASE, THE ASSESSEE ISSUED AC COUNT PAYEE CHEQUE ON 30.10.2001, WHICH WAS CREDITED IN THE ACC OUNT OF SHRI SUSHIL BANSAL ON 02.11.2001 AND WAS WITHDRAWN IN CA SH ON SAME DAY. AS THE COPY OF CHEQUE BEARS THE SIGNATURES OF THE P ERSON CASHING THE SELF-CHEQUE. IT IS CERTAIN THAT THE ACCOUNT HOL DER SHRI SUSHIL ITA NO.486/IND/2016AY: 02-03/GIRISH AGARWAL PAGE 3 OF 5 BANSAL HAD NOT DRAWN THE SAID AMOUNT OF RS. 5, 37,9 96/-. THE AO OBSERVED THAT THE ASSESSEE WAS CONFRONTED WHEREIN H E COULD NOT RECOGNIZE THE SIGNATURES OF PERSON ENCASHING THE SE LF-CHEQUE WHO WERE SUMIT GARG AND VISHNU OR VIJAY. THE ASSESSEE AL SO NOT TURN UP FOR FINAL HEARING NOR ANY EVIDENCE OR DOCUMENTS WER E PRODUCED IN SUPPORT OF CLAIM. HENCE, THE AMOUNT WAS TREATED AS UNEXPLAINED EXPENSES. 4. IN APPEAL, THE ASSESSEE HAS CLAIMED THAT THE PURCHA SES WERE MADE FROM SHREE GANESH TRADERS 86, RNT MARG BIY ABANI INDORE AND NOT FROM SHREE GANESH TRADERS 76/2 BIYABA NI, INDORE. THE PAYMENT WERE ALSO MADE BY CHEQUE AND THE FACT T HAT THE PAYEE HAS WITHDRAWN THE AMOUNT CANNOT BE HELD AGAIN ST THE APPELLANT. THE LD. CIT (A), HOWEVER, THE HAD ALSO C ONCURRED THE VIEW OF THE AO, BY OBSERVING THAT THE ASSESSEE FAILED T O PRODUCE BOOKS OF ACCOUNTS AND VOUCHERS AS CALLED FOR BY THE AO . THUS, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THIS TRIBUNAL . 5. THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESS EE SUBMITTED THAT THE ASSESSEE HAD MADE PAYMENTS BY A CCOUNT PAYEE CHEQUE, WHICH ARE REFLECTED IN BOOKS OF ACCOU NTS AND BANK ACCOUNT. THE DETAILS OF PURCHASES WERE ALSO SUBMIT TED TO THE OFFICE KRISHI UPAJ MANDI SAMITI LAXMIBAI, NAGAR, INDORE, T O PROVE THE GENUINENESS OF PURCHASES. THE PURCHASES WERE RECORD ED IN THE NAME OF SHREE GANESH TRADERS 86 RNT MARG INDORE IN THE REGULAR BOOKS OF ACCOUNTS. THE BOOKS OF ACCOUNTS ARE AUDITE D. THEREFORE, NO ADDITION IS CALLED FOR. IN THE ALTERNATIVE, THE LEARNED AUTHORIZED REPRESENTATIVE URGED THAT THE ASSESSEE HAS AFFECTED SALES ALSO, THEREFORE EVEN IF ANY ADDITION IS SUSTAINED THAT MA Y BE MADE BY ITA NO.486/IND/2016AY: 02-03/GIRISH AGARWAL PAGE 4 OF 5 APPLYING NET PROFIT RATE ON CORRESPONDING SALE TO U NACCOUNTED PURCHASES. 6. THE LD. SR. D.R. RELIED UP ON THE ORDERS OF LOWER AUTHORITIES AND SUBMITTED THAT IT IS CASE OF BOGUS ACCOMMODATI ON ENTRIES AND THEREFORE PURCHASES ARE NOT GENUINE, HENCE ADDITION NEEDS TO BE SUSTAINED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THR OUGH THE APPEAL ORDER AND ASSESSMENT ORDER. WE FIND THAT THE ASSESSEE HAD ISSUED CHEQUE NO. 732106 DTD. 02.11.2001 OF RS. 2, 37,996/- DRAWN ON VYAPARIK AUDHYOGIK SAHKARI BANK LIMITED, WHICH WAS CREDITED IN THE BANK ACCOUNT OF M/S. SHREE GANESH TRADERS ON 02.11.2 001, AND ON SAME DAY SAME AMOUNT WAS WITHDRAWN BY SELF-CHEQUE I SSUED BY SHRI SUSHIL BANSAL, THE SO-CALLED SUPPLIER, BY A PE RSON NAMED SUMIT GARG. SIMILARLY, CHEQUE NO. 732109 DTD. 08.11.2001 O F RS. 3, 00,000/- DRAWN ON VYAPARIK AUDHYOGIK SAHKARI BANK LIMITED WA S ISSUED BY THE ASSESSEE, WHICH WAS CREDITED IN THE BANK ACCOUN T OF M/S. SHREE GANESH TRADERS ON 12.11.2001, AND SAME WAS WITHDRAWN IN CASH ON SAME DAY THROUGH SELF CHEQUE PURPORTED TO HAVE BEEN ISSUED BY SHRI SUSHIL BANSAL BY THE PERSON NAMED VISHNU OR VI JAY (MAY BE AN EMPLOYEE OF THE ASSESSEE). THIS MODUS OPERANDI WAS ALSO CONCLUSIVE ESTABLISHED IN THE CASE OF SHRI RADHEY SHYAM AGARWA L, WHO HAS ALSO DEALT WITH SHRI SUSHIL BANSAL. THE LEARNED AUTHORIZ ED REPRESENTATIVE HAS FILED COPIES OF BILLS OF PURCHASE AS PART OF PA PER BOOK. THE BILL ISSUED BY M/S. SHREE GANESH TRADERS WHICH ARE PLACED AT PAPER BOOK PAGE NO. 18 TO 20 SHOWS THAT THESE BILL DO N OT BEAR PHONE NO., FOOD GRAIN LICENSE AND VEHICLE NO. ETC. EVEN THOUGH THESE BILLS ITA NO.486/IND/2016AY: 02-03/GIRISH AGARWAL PAGE 5 OF 5 CONTAINS COLUMNS RELATING TO PHONE, VEHICLE NO. AND GRAIN LICENSE, THUS IT IS MANIFEST THAT THESE ARE NOT GENUINE. IT WILL ALSO BE RELEVANT TO MENTION THAT THERE IS SOME ERASING OF ENTRY, WHI CH APPEARS TO BE OF CHEQUE HAVING RECEIVED BACK. THUS, IT IS PALPABL E THAT THE ASSESSEE HAVING DEBITED THE AMOUNT OF RS. 5,37,996/ - IN THE PURCHASE ACCOUNT AND ALSO HAVING DRAWN BACK THE SAI D AMOUNT FROM THE BANK ON THE STRENGTH OF SELF CHEQUE OF SHR I SUSHIL BANSAL, BY A PERSON ON HIS BEHALF, HAS CLAIMED UNREAL EXPENSE S AND DECLARED PROFIT LESS BY RS. 5,37,996/- . THE SECONDARY EVIDE NCE OF ENTRIES IN BOOKS OF ACCOUNTS OF THE ASSESSEE AND KRISHI UPAJ M ANDI SAMITI ARE CONCOCTED EVIDENCE TO GIVE COLOR TO BOGUS PURCHASE IN TO REAL PURCHASE. THEREFORE, WE ARE OF THE CONSIDERED OPINI ON THAT THE LD. CIT (A) HAS JUSTIFIED IN SUSTAINING THE ADDITION BE ING IN THE NATURE OF UNEXPLAINED EXPENDITURE. THIS GROUND OF APPEAL IS, THEREFORE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS, THERE FORE DISMISSED. THE ORDER PRONOUNCED IN OPEN COURT ON 17.08.2016. SD/- (D.T.GARASIA) JUDICIAL MEMBER SD/- (O.P.MEENA) ACCOUNTANT MEMBER DATED: AUGUST 2016. OPM*