M/s. Bipin Metal Products, Dhule V. Assistant Commissioner of Income tax, Dhule

ITA 489/PUN/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4948 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHRI
• Keywords: Bogus purchase; Opportunity of being heard; Principle of natural justice; Accommodation entries; Reassessment proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI S. S. VISWANETHRA RAVI, JM . / ITA NOS.489 & 490/PUN/2017 / ASSESSMENT YEARS : 2010-11 & 2011-12 M/S. BIPIN METAL PRODUCTS, GAT NO.24/1B, BOMBAY AGRA ROAD, AWDHAN, DHULE-424311. PAN : AABFB4096L ....... / APPELLANT / V/S. ACIT, CIRCLE DHULE, DHULE. / RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI PANKAJ GARG / DATE OF HEARING : 05.11.2019 / DATE OF PRONOUNCEMENT : 06.11.2019 / ORDER PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION BY THE SAME ASSESSEE FOR THE DIFFERENT ASSESSMENT YEARS NAMELY A.YS. 2010-11 AND 2011-12. BOTH THE APPEALS ARE FILED AGAINST THE COMMON ORDER OF CIT(A)-1, NASHIK DATED 11.01.2017. 2. IN BOTH THE APPEALS, THE ISSUES ARE COMMON AND THE SAME RELATES TO THE BOGUS PURCHASES AND RELATED ADDITIONS. 3. BEFORE US, AT THE OUTSET, WITHOUT GOING TO THE OTHER ISSUES RAISED IN THE GROUNDS, WHICH ARE KEPT OPEN FOR FUTURE, IF ANY, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUES ON MERITS NEED TO BE REMANDED TO THE FILE OF THE 2 ITA NOS.489 & 490/PUN/2017 ASSESSING OFFICER. BRINGING OUR ATTENTION TO THE JURISDICTIONAL HIGH COURTS JUDGEMENT IN THE CASE OF PR.CIT VS. M/S. MOHOMMAD HAJI ADAM & CO. VIDE INCOME TAX APPEAL NO.1004 OF 2016 DATED 11.02.2019 AS WELL AS THE ORDER OF THE TRIBUNAL IN THE CASE OF DINESH RATHI VS. DCIT VIDE ITA NO.975/PUN/2018 FOR THE ASSESSMENT YEAR 2009-10 AND OTHERS DATED 26.09.2019, LD. COUNSEL SUBMITTED THAT THE MATTER CAN BE REMANDED TO THE FILE OF THE ASSESSING OFFICER WITH IDENTICAL DIRECTIONS GIVEN BY THE TRIBUNAL IN THE CASE OF DINESH RATHI (SUPRA). 4. ON HEARING BOTH THE SIDES, WE FIND RELEVANT TO EXTRACT THE CONCLUSION PARAGRAPHS FROM THE ORDER OF THE TRIBUNAL (SUPRA) AND THE SAME ARE EXTRACTED AS UNDER :- 10. REVERTING TO THE FACTS OF THE INSTANT CASES, IT IS SEEN THAT THE CONCERNED AOS RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT ABOUT THE DETAILS OF ACCOMMODATION ENTRY PROVIDERS AND THE ASSESSES HAD ALSO RECORDED PURCHASES FROM SUCH HAWALA ENTRY PROVIDERS. THERE WAS A CLOSE NEXUS BETWEEN THE REPORT OF THE SALES TAX DEPARTMENT AND THE FORMATION OF BELIEF BY THE ASSESSING OFFICER ABOUT THE ESCAPEMENT OF INCOME OF THE ASSESSEE FOR THE YEAR(S) UNDER CONSIDERATION. SUCH INFORMATION WAS SPECIFIC, NOT GENERAL OR VAGUE. THUS, IT IS ABUNDANTLY CLEAR THAT RECEIPT OF SUCH AN INFORMATION WAS SUFFICIENT ENOUGH FOR THE ASSESSING OFFICER TO INITIATE THE REASSESSMENT. IN OUR CONSIDERED OPINION, NO EXCEPTION CAN BE TAKEN TO THE VIEW CANVASSED BY THE ASSESSING OFFICER(S) IN INITIATING THE REASSESSMENT ON THIS SCORE. THE GROUND(S) TAKEN BY THE ASSESSEES IN CHALLENGING THE INITIATION OF REASSESSMENT PROCEEDINGS IN GENERAL WAY ARE THUS DISMISSED. 11. NOW WE TURN TO THE MERITS OF THE CASES. THE ASSAIL IS TO THE MAKING OF ADDITION(S) ON THE BASIS OF BOGUS PURCHASE BILLS RECEIVED BY THE ASSESSEE(S) AS ACCOMMODATION ENTRIES FROM HAWALA DEALERS. IT IS SEEN THAT THE ISSUE OF BOGUS PURCHASES HAS RECENTLY COME UP FOR CONSIDERATION BEFORE THE HONBLE BOMBAY HIGH COURT IN PR.CIT VS. MOHOMMAD HAJI ADAM & CO. VIDE ITS JUDGMENT DATED 11-02-2019 IN ITA NO.1004 OF 2016 AND OTHERS, THE HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT NO AD HOC ADDITION FOR BOGUS PURCHASES SHOULD BE MADE. IT LAID DOWN THAT THE ADDITION SHOULD BE MADE TO THE EXTENT OF DIFFERENCE BETWEEN THE GROSS PROFIT RATE ON GENUINE PURCHASES AND GROSS PROFIT RATE ON HAWALA PURCHASES. SUCH CASE SPECIFIC DETAILS ARE NOT READILY AVAILABLE WITH THE RESPECTIVE LD. ARS OR THE LD. DRS FOR FACILITATING THE CALCULATION OF GROSS PROFIT RATES OF GENUINE AND HAWALA PURCHASES. UNDER THESE CIRCUMSTANCES, WE SET- ASIDE THE IMPUGNED ORDERS AND REMIT THE MATTER TO THE FILE OF THE RESPECTIVE AOS FOR APPLYING THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE ABOVE NOTED CASE AND RECOMPUTE THE AMOUNT OF ADDITIONS, IF ANY, AFTER ALLOWING A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 12. IN THE RESULT, ALL THE APPEALS, EXCEPT SEPARATELY DISPOSED OFF INFRA, ARE FULLY/PARTLY ALLOWED FOR STATISTICAL PURPOSES. 3 ITA NOS.489 & 490/PUN/2017 5. CONSIDERING THE ABOVE, WE ARE OF THE OPINION, IN BOTH THE APPEALS, THE ISSUES RELATING TO THE BOGUS PURCHASES AND THE RELATED ADDITIONS SHOULD BE REMANDED BACK TO THE FILE OF THE ASSESSING OFFICER FOR COMPLIANCE OF THE DIRECTION OF THE TRIBUNAL (SUPRA). ACCORDINGLY, THE ASSESSING OFFICER IS DIRECTED TO PASS A SPEAKING ORDER STRICTLY IN ACCORDANCE WITH THE SAID ORDER OF THE TRIBUNAL (SUPRA) AS PLEADED BY LD. AR OF THE ASSESSEE. THE ASSESSING OFFICER SHALL GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER SET PRINCIPLES OF NATURAL JUSTICE. THUS, THE RELEVANT GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. 6. CONSIDERING THE RELIEF GRANTED TO THE ASSESSEE IN BOTH THE APPEALS ON THE LEGAL ISSUE, THE ADJUDICATION OF OTHER GROUNDS BECOMES AN ACADEMIC EXERCISE ONLY. THUS, THE OTHER GROUNDS RAISED BY THE ASSESSEE IN BOTH THE APPEALS ARE DISMISSED AS ACADEMIC. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 06 TH DAY OF NOVEMBER, 2019. SD/- SD/- (S. S. VISWANETHRA RAVI) (D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 06 TH NOVEMBER, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-1, NASHIK. 4. THE CCIT, NASHIK. 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.