SURESH S.C. PROP M.S, GRAND PROFFING SERVICES, MUMBAI V. ITO 23(2)(2),

ITA 4920/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2917 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: E
• Next Hearing Date: 09-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 30-07-2012
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY R PARIKH
• Keywords: Opportunity of being heard
• Section: 143(3); 133(6)

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S HRI R.C. SHARMA , ACCOUNTANT MEMBER & SHRI SANDEEP GOSAIN , J UDICIAL MEMBER ./ I.T.A. NO. 4920 /MUM/20 1 2 ( / ASS ESSMENT YEAR : 20 0 7 - 2 008 MR. SURESH S.C., (PROP. M/S GRAND PROOFING SERVICES), 24, NAHUR YDYOG PREMISES, PANDIT M. MALAVIA ROAD, MULUND (W), MUMBAI 400 080. / VS. THE INCOME TAX OFFICER 23(2)(2), PIRAMAL CHAMBERS, LALBAUG, MUMBAI. ./ PAN : AAACA 3437E ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI SANJAY R. PARIKH R E SPONDENT BY : SHRI JAVED AKHTAR / DATE OF HEARING : 1 4 - 10 - 201 5 / DATE OF PRONOUNCEMENT : 21 - 10 - 2015 [ / O R D E R PER R.C. SHARMA , A .M . : THIS IS AN APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) - 11 , MUMBAI DATED 21 - 05 - 2012 FOR THE A.Y. 200 7 - 08 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE INVOLVED IN THIS APPEAL RELATES TO DISALLOWANCE OF PURCHASE OF RAW MATERIALS AMOUNTING TO RS. 24 , 98 , 636 / - . 3. RIVAL CONTENTIONS HAVE BEEN HEARD A ND RECORD PERUSED. THE FACTS IN BRIEF ARE THAT THE ASSSSEE IS A TRADER IN PVC, ALUMINUM SHEETS AND CHANNELS. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE A.O. FOUND THAT THE ASSESSEE HAS MADE PURCHASES OF RS. 11,26,542/ - FROM M/S NORTH EAST DISTRIBUTORS ITA 4920 / M/ 1 2 2 A ND ALSO RS. 12,89,752/ - FROM M/S GURIND SYSTEMS. THE A.O. ISSUED NOTICE U/S 133(6) OF THE ACT TO THE ABOVE SUPPLIERS WHICH WERE DULY SERVED BUT NEITHER OF THEM COMPLIED WITH THE SAID NOTICES. HOWEVER, TO CONFIRM THE TRANSACTION OF PURCHASES, THE ASSESSEE HAS FILED COPIES OF LEDGER ACCOUNT AND CONTENDED THAT THE PAYMENT FOR THE PURCHASES W AS MADE BY A/C PAYEE CHEQUES. NOT SATISFIED WITH ASSESSEES REPLY , THE A.O. ADDED THE PURCHASES FROM THESE TWO PARTIES IN THE INCOME OF THE ASSESSEE. BY THE IMPUGNED ORD ER, THE LD. CIT(A) CONFIRMED THE ACTION OF THE A.O. AGAINST THE ORDER OF THE LD. CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. IT WAS CONTENDED BY THE LD. A.R. THAT THE ASSESSEE HAD MADE PURCHASES FROM M/S NORTH EAST DISTRIBUTORS AND THEIR PAY MENT IS NOT MADE DURING THE YEAR UNDER CONSIDERATION AS THERE WAS DISPUTE WITH REGARD TO THE QUALITY OF MATERIAL SUPPLIED. M/S NORTH EAST DISTRIBUTORS EVEN THOUGH DID NOT APPEAR IN PERSON BEFORE THE A.O. IN RESPONSE TO THE NOTICES U/S 133(6) OF THE ACT , H OWEVER, M / S NORTH EAST DISTRIBUTORS HAS FILED THEIR CONFIRMATION BEFORE THE A.O. VIDE LETTER DATED 7 TH SEPTEMBER, 2009 ALONG WITH STATEMENT OF ACCOUNTS OF PURCHASES SO MADE. WITH REGARD TO THE PURCHASES MADE FROM M/S GURIND SYSTEMS PVT. LTD., HE CONTENDED THAT THE ENTIRE PURCHASES WERE GENUINE AND PAYMENT WAS MADE BY A/C PAYEE CHEQUES . HE ALSO DRAWN OUR ATTENTION TO THE GROSS PROFIT SHOWN BY THE ASSESE DURING THE YEAR UNDER CONSIDERATION AND CONTENDED THAT ASSESSEE HAD SHOWN HIGHER GROSS PROFIT RATE DURIN G THE YEAR, THEREFORE, NO ADVERSE INFERENCE CAN BE DRAWN WITH REGARD TO THE GENUINENESS OF PURCHASE. ACCORDINGLY, HE CONTENDED THAT THE ADDITIONS SO MADE BY THE A.O. ARE UNWANTED. 5. ON THE OTHER HAND, THE LD. D.R. RELIED ON THE ORDERS OF AUTHORITIES BEL OW AND CONTENDED THAT THE ASSESSEE COULD NOT PRODUCE THESE TWO SUPPLIERS BEFORE THE A.O., TO SUBSTANTIATE THE CLAIM OF PURCHASES . ACCORDINGLY, A.O. WAS JUSTIFIED IN MAKING THE ADDITION. ITA 4920 / M/ 1 2 3 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, CAREFULLY GONE THROUGH THE ORDERS OF AUTHORITIES BELOW AND FIND FROM RECORD THAT THE A.O. HAS DIRECTLY ASKED CERTAIN INFORMATION FROM THE SUPPLIER M/S NORTH EAST DISTRIBUTORS VIDE LETTER DATED 16 TH OCTOBER, 2009 . M/S NORTH EAST DISTRIBUTORS REPLIED THE SAME VIDE THEIR LETTER DAT ED 7 TH SEPTEMBER, 2009 WHEREIN FULL ADDRESS, NATURE OF ACTIVITY, PAN DETAILS OF GOODS SUPPLIED, NET SALES AMOUNT, BALANCE OUTSTANDING AT THE END OF THE YEAR WAS FURNISHED. THE NORTH EAST DISTRIBUTORS PVT. LTD. HAD EVEN FILED THE COPY OF P&L ACCOUNT, BALANC E SHEET FOR THE YEAR ENDED 31 - 03 - 2007 TO SUBSTANTIATE THE GOODS SUPPLIED TO THE ASSESSEE. THE STATEMENT OF ACCOUNTS CLEARLY INDICAT ED THE GOODS SOLD TO THE ASSESSEE ON VARIOUS DATES ALONG WITH BILL NO. AND DATE OF BILL WAS ALSO FURNISHED. IN RESPECT OF GO ODS SUPPLIED BY M/S GURIND SYSTEMS PVT. LTD., WE FIND THAT THE ASSESSEE HAS FILED COPY OF LEDGER ACCOUNT, DETAILS OF BILL, COPY OF BANK STATEMENT SHOWING PAYMENT TO M/S GURIND SYSTEMS PVT. LTD. IT APPEARS THAT ALL THESE DOCUMENTARY EVIDENCES GO TO THE ROOT OF THE MATTER SO AS TO JUSTI FY THE GENUINENESS OF PURCHASES, HOWEVER, LOWER AUTHORITIES HAVE NOT PROPERLY APPRECIATED THE SAME. THE FACT THAT THE ASSESSEE HAS EARNED BETTER GP RATE DURING THE YEAR ALSO SUPPORTS THE CONTENTION OF THE ASSESSEE THAT PURCHASE S WERE GENUINELY MADE AND SOLD AT HIGHER PRICE WHICH RESULTED INTO BETTER GP RATE. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS APPEAL TO THE FILE OF THE A.O. TO RE - EXAMINE THE ABOVE DOCUMENTS AND DECIDE THE ISSUE AFRESH AS PER LAW AFTER PROV IDING SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 7 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE S . O RDER PRONOUNCED IN THE OPEN COURT ON 21 ST OCTOBER , 2015. SD/ - SD/ - ( SAN DEEP GOSAIN ) ( R.C. SHARMA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 21/10/2015 . . ./ RK , SR. PS ITA 4920 / M/ 1 2 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) 11 , MUMBAI 4. / CIT 23, MUMBAI 5. , , / DR, ITAT, MUMBA I E BENCH 6. / GUARD FILE . / BY ORDER, //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI