ITO 8(2)(2), MUMBAI V. SNEHA ALLOYS PVT. LTD., MUMBAI

ITA 4989/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8576 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 04-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: AMIT JHAVERI
• Keywords: Bogus purchase; Tax effect; Onus to prove
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 4989/MUM/2016 ASSESSMENT YEAR: 2006-07 ITO 8(2)(2) VS. M/S. SNEHA ALLOYS PVT. LTD. 4 TH FLOOR, R. NO. 477B 193/3, STATION ROAD, AAYAKAR BHAVAN, M.K. ROAD WADALA, MUMBAI 400020 MUMBAI - 400031 PAN NO. AAFCS8231F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI PURUSHOTTAM KUMAR, DR ASSESSEE BY: SHRI AMIT JHAVERI, AR DATE OF HEARING : 08/02 /2017 DATE OF PRONOUNCEMENT: 08/02/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2006-07. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER (APPEALS) 14, MUMBAI AND ARISES OUT OF THE ORDER U/S 144 OF THE INCOME TAX ACT, 1961 (THE ACT). 2. THE GROUNDS OF APPEAL FILED BY THE REVENUE READ AS UNDER: I. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN RE STRICTING THE ADDITION TO 12.5% ON ACCOUNT OF BOGUS PURCHASES INDICA TED BY THE SALES TAX DEPARTMENT ONLY INSTEAD OF THE ENTIRE PURCHASES (EX CEPT CASE OF M/S. ISPAT ENERGY LTD.) AS CONFIRMED BY THE ASSESSEE. II. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT DURING THE COURSE OF SURVEY PROCEEDINGS SHRI SHIVRAT AN LUHARUKA, THE DIRECTOR AND THE SHAREHOLDER OF THE COMPANY, HAS STATED THAT T HE ACTUAL DELIVERY OF THE ALL ITA NO. 4989/MUM/2016 2 GOODS PURCHASES HAD NEVER TAKEN PLACE EXCEPT IN THE C ASE OF M/S. ISPAT ENERGY LTD. III. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THIS BEING A CASE OF UTTER DISREGARD AND SUBVERSION OF LAW, THE BURDEN OF PROOF CAST ON THE ASSESSEE WAS OF A VERY HIGH DEGREE AND AS SESSEE FAILED TO DISCHARGE THIS BURDEN. IV. THE LEARNED CIT(A) HAS ERRED ON FACTS AND IN LAW, IN NOT GIVING EFFECT TO SECTION 114(G) OF THE INDIAN EVIDENCE ACT WHICH CLEA RLY LAYS DOWN THAT IF A FACT IN KNOWLEDGE OF A PARTY IS NOT EXPLAINED, ADVERSE INFEREN CE CAN BE DRAWN AGAINST THE PARTY POSSESSING THE KNOWLEDGE OF FACTS / INFORM ATION. V. THE LD. CIT(A)S ORDER IS CONTRARY TO LAW AND FACT S AND DESERVES TO BE SET ASIDE. 3 . WE FIND THAT THE ASSESSING OFFICER (AO) HAS MADE AN ADDITION OF RS. 21,88,881/- TO THE TOTAL LOSS OF RS. 68,570/- S HOWN BY THE ASSESSEE IN ITS RETURN OF INCOME FOR THE A.Y. 2006-07. THE A SSESSEE PREFERRED AN APPEAL AGAINST THE ORDER OF THE AO BEFORE THE LE ARNED CIT(A). WE FIND THAT THE LEARNED CIT(A) RESTRICTED THE ADDITIO N MADE BY THE AO TO 12.5% OF RS. 21,88,881/-. THE TAX EFFECT THUS FALLS BELOW THE MONETARY LIMIT OF RS. 10,00,000/- FOR FILLING APPEAL BEFORE THE ITAT AS PER CBDT CIRCULAR NO. 21 OF 2015 DATED 10.12.2015. BOTH THE LEARNED COUNSELS AGREE TO THE FACT THAT THE TAX EFFECT IN THE INSTAN T APPEAL IS BELOW THE MONETARY LIMIT. 4. THE MONETARY LIMITS HAVE BEEN MADE APPLICABLE RE TROSPECTIVELY IN THE SAID CIRCULAR AS WOULD BE EVIDENT FROM THE F OLLOWING: THIS INSTRUCTION WILL APPLY RETROSPECTIVELY TO PE NDING APPEALS AND APPEALS TO BE FILED HENCEFORTH IN HIGH COURTS / TRIBUNALS. PENDI NG APPEALS BELOW THE SPECIFIED TAX LIMITS IN PARA 3 ABOVE MAY BE WITHDRAWN / NOT PRESSED. 5. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE RE VENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08/02/2017 SD/- SD/- (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED: 08/02/2017 BISWAJIT, SR. P.S. ITA NO. 4989/MUM/2016 3 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