M/s. Angad Exports, New Delhi V. ACIT, New Delhi

ITA 5048/DEL/2014

• Counselvise Citation: 504820114 RSA 2014
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 2
• Next Hearing Date: 06-08-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 12-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUDHIRANJAN SENAPATI
• Assessee Lawyers: AMIT GOEL
• Keywords: Bogus purchase; Search and seizure
• Section: 143(3); 142(1); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 2 , NEW DELHI BEFORE SHRI H.S.SIDHU , JUDICIAL MEMBER ITA NO. 5048 /DEL/201 4 AY: 200 9 - 10 ANGAD EXPORTS VS. ACIT, CENTRAL CIRCLE 10 A 14, WESTEND NEW DELHI NEW DELHI 110 021 PAN: AAEFA 8954 D (APPELLANT) (RESPONDENT) A PPELLANT BY : SH. AMIT GOEL, C.A. RESPONDENT BY : SH. SUDHIRANJAN SENAPATI, SR.D.R ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DT. 18.06.2014 OF LD.CIT(A) - XX XI I, NEW DELHI FOR THE ASSESSMENT YEAR 200 9 - 10 , ON THE FOLLOWING GROUNDS. 1 . ON THE FACTS AND CIRCUMSTANCES OF CASE A ND IN LAW, THE ADDITION OF RS.5,00,000 / - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED ACCOMMODATION ENTRY / BOGUS PURCHASE IS BEYOND THE JURISDICTION OF PROVISIONS OF SECTION 153A OF INCOME TAX ACT, 1961 AND COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN NOT HOLDING SO. 2. ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN CONFIRMING THE ADDITION OF RS.5,00,000 / - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ALLEGED ACCOMMODATION ENTRY / BOGUS PURCHASES. THE APPELLANT CRAVES LEAVE TO ADD ONE OR MORE GROUND OF APPEAL OR TO ALTER/ MODIFY THE EXISTING GROUND BEFORE OR AT THE TIME OF HEARING OF APPEAL. THE AFORESAID GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE, A PARTNERSHIP FIRM, IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND EXPORT OF ARTIFICIAL JEWELLERY. A SEARCH AND SEIZURE OPERATION U/S 132 OF THE IT ACT, 1961 WAS CONDUCTED BY THE INVESTIGATION WING OF THE DEPARTMENT IN TECH GROUP OF CASES ON ITA NO. 5048/DEL/2014 A.Y. 2009 - 10 ANGAD EXPORTS, NEW DELHI 2 26. 04.2010 AND SIMULTANEOUSLY THE ASSESSEE S PREMISES AT 49, UDYOG VIHAR, PHASE - IV, GURGAON, HARYANA WAS ALSO SEARCHED U/S 132(1) OF THE IT ACT, 1961 (THE ACT) . THE CASE OF THE A SSESSEE WAS CENTRALIZED U/S 127 OF THE IT ACT, 1961 VIDE ORDER F.NO. C IT - IX/ I TO(H Q )/127/2010 - 11/809 DATED 13 . 08 . 2010 AND THE JURISDICTION OVER THE A SSESSEE 'S CASE WAS ASSIGNED TO THE PRESENT ASSESSING OFFICER, CENTRAL CIRCLE - 1 0, NEW DELHI. THEREAFTER, A STATUTORY NOTICE U/S 153A OF THE IT ACT, 1961 DATED 13.04.2011 WAS ISSUED AND SERVED UPON THE A SSESSEE , IN RESPONSE TO WHICH, THE A SSESSEE FILED ITS RETURN ON 02.05.2011 DECLARING A LOSS OF RS.3,281/ - . SUBSEQUENTLY, NOTICES U/S 143(2) AND 142(1) ALONG WITH A QUESTIONNAIRE WERE ISSUED AND SERVED UPON THE A SSESSEE . IN RESPONSE TO THE SAME, THE ARS OF THE A SSESSEE ATTENDED THE ASSESSMENT PROCEEDINGS FROM TIME TO TIME AND FILED THE NECESSARY DETAILS, INFORMATION AND DOCUMENTS WHICH WERE EXAMINED BY THE ASSESSING OFFICER AND THE CASE WAS DISCUSSED. THEREUPON, THE ASSESSMENT WAS COMPLETED IN TERMS OF AN ORDER U/S 153A READ WITH SECTION 143(3) DATED 22.03.2013 AT A TOTAL INCOME OF RS . 4,96,719/ - AS AGAINST THE RETURNED LOSS OF RS.3,281/ - WHEREIN THE ASSESSING OFFICER MADE AN ADDITION OF RS.5,00,000/ - ON ACCOUNT BOGUS PURCHASES . 3. AGGRIEV ED BY THE ASSESSMENT ORDER DT. 22 ND MARCH, 2003 PASSED U/S 143(3) OF THE ACT, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY WHO VIDE THE IMPUGNED ORDER DT. 18.6.2014 PARTLY ALLOWED THE APPEAL AND SUSTAINED THE ADDITION IN DISPUTE. 3.1. AGGRIEVED FURTHER BY THE IMPUGNED ORDER, THE ASSESSEE FILED THE PRESENT APPEAL . 4. AT THE TIME OF HEARING , SHRI AMIT GEOL, THE LD.COUNSEL FOR THE ASSESSEE STATED THAT THE REVENUE AUTHORITIES HAVE WRONGLY MADE THE ADDITION OF RS.5 LAKHS FOR THE PURCHASES MADE OF RS.19,65,500/ - FOR THE F .Y. 200 6 - 07 OUT OF WHICH THE ASSESSEE HAS MADE THE PAYMENT OF RS.5 LAKHS WHICH IS IN DISPUTE IN THE PRESENT APPEAL. THE ASSESSEE HAS PAID THE AMOUNT IN DISPUTE BY C HEQUE ON ACCOUNT OF PURCHASES MADE DURING THE F .Y. ITA NO. 5048/DEL/2014 A.Y. 2009 - 10 ANGAD EXPORTS, NEW DELHI 3 200 6 - 07 FOR WHICH THE REVENUE AUTHORITIES HAS ALSO MADE THE ADDITIONS AGAINST WHICH THE APPEAL IS PENDING BEFORE THE ITAT. HE FURTHER STATED THAT THE ASSESSING OFFICER HAS WRONGLY MADE THE ADDITION OF RS.5 LAKHS WHICH IS BEYOND THE SCOPE OF S.153A OF THE INCOME TAX ACT, 1961 (THE ACT) BECAUSE NO INCRIMINATING MATERIAL OR EVIDENCE HAS BEEN FOUND DURING THE COURSE OF SEARCH AS ON THE DATE OF SEARCH NO ASSESSMENT PROCEEDINGS WERE PENDING FOR THE A.Y. 2009 - 10 A ND THE A.O. WAS NOT JUSTIFIED IN DISPOSING THE CONCLUDED ASSESSMENT WITHOUT THERE BEING ANY INCRIMINATING MATERIAL IS FOUND UNDER THE SEARCH. IN SUPPORT OF HIS CONTENTION HE CITED THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (137 ITD 287) . HE ALSO DREW OUR ATTENTION TOWARDS SMALL PAPER BOOK FILED BY HIM CONTAINING PAGES 1 TO 20 IN WHICH HE HAS ATTACHED A SMALL WRITTEN SUBMISSIONS ON THE ISSUE IN DISPUTE AS WELL AS THE LEDGER ACCOUNT OF ASSESSEE SHOWING THE PAYMENT OF RS.5 LAKHS BY CHEQUE TO RAMJI TRADERS FOR THE PERIOD FROM 1.4.2005 TO 31 ST MARCH, 2010. HE HAS ALSO DREW OUR ATTENTIONS TOWARDS THE PURCHASES AMOUNTING TO RS.19,65,500/ - AGAINST WHICH THE ASSESSEE HAS MADE THE PAYMENT BY CHEQUES DT. 18.4.2008, 19 TH MAY, 2008 AND 30 TH MAY,2008. TO SUPPORT HIS CONTENTION THE LD.COUNSEL FOR THE A SSESSEE HAS ALSO DREW OUR ATTENTION TOWARDS PAPER BOOK AS WELL AS THE ARGUMENTS ADVANCED BY HIM IN THE WRITTEN SUBMISSIONS BEFORE THE LD.CIT(A) AND STATED THAT THE REVENUE AUTHORITIES H AS WRONGLY MADE THE ADDITION OF RS.5 LAKHS ON ACCOUNT OF ALLEGED ACCOM MODATION ENTRY/BOGUS PURCHASES. THE AO HAS NOT BROUGHT ON RECORD ANY BOOKS OF ACCOUNTS/DOCUMENTS OR MATERIAL WHICH WAS FOUND DURING THE COURSE OF SEARCH BUT WERE NOT PRODUCED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. HE RELIED ON THE WRITTEN SUBMISSIONS FILED BY HIM AS WELL AS THE OTHER DOCUMENTARY EVIDENCE IN THE SHAPE OF PAPER BOOK FILED BY THE ASSESSEE BEFORE THE REVENUE AUTHORITIES AS WELL AS BEFORE US. 5. THE LD. SR. D.R. RELIED ON THE ORDER PASSED BY THE LD. FIRST APPELLATE AUTHORITY AND STATED THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE SUPPORTING HIS CLAIM BEFORE THE REVENUE AUTHORITIES, THEREFORE, THE ADDITION ITA NO. 5048/DEL/2014 A.Y. 2009 - 10 ANGAD EXPORTS, NEW DELHI 4 IN DISPUTE HAS RIGHTLY BEEN MADE BY THEM. THEREFORE THE APPEAL FILED BY THE ASSESSEE MAY BE DISMISSED. 6. I HAVE HEARD BO TH THE PARTIES, PERUSED THE RELEVANT RECORD AVAILABLE WITH HIM. SPECIALLY THE SMALL PAPER BOOK FILED BY THE ASSESSEE S COUNSEL CONTAINING 20 PAGES IN WHICH HE HAS ATTACHED A WRITTEN SUBMISSION ALONG WITH DOCUMENTARY EVIDENCE SUPPORTING THE CLAIM OF THE ASSESSEE. I AM OF THE CONSIDERED OPINION THAT THE ONLY SUBSTANTIVE ISSUE IN THE PRESENT APPEAL IS WITH REGARD TO THE ADDITION OF RS.5 LAKHS MADE BY THE A.O. THE A.O. HAS GROSSLY ERRED IN MAKING THE ADDITION OF RS.5 LAKHS IN RESPECT OF CHEQUE PAYMENT MADE TO M/S RAMJI TRADERS. THE FACTS OF THE MATTER IS THAT DURING THE F.Y. 2006 - 07 , THE ASSESSEE HAS MADE PURCHASES OF RS.90,65,500/ - THE PAYMENT AGAINST THESE PURCHASES WERE MADE DURING THE YEAR UNDER APPEAL FOR THE A.Y. 2009 - 10. THE PAYMENT MADE INCLUDE TH E IMPUGNED CHEQUE PAYMENT OF RS.5 LAKHS. THE PAYMENT HAS BEEN MADE FROM THE REGULAR BANK ACCOUNT OF THE ASSESSEE AND THERE IS NO DISPUTE BY THE A.O. WITH REGARD TO THIS FACT. THE ASSESSEE HAS NOT MADE ANY PURCHASES D URING THE YEAR UNDER CONSIDERATION, AN D HAS ACCORDINGLY NOT CLAIMED ANY DEDUCTION ON THE SAID AMOUNT OF RS.5 LAKHS. THEREFORE, THERE IS NO BASIS FOR MAKING THE ADDITION OF THIS AMOUNT OF RS.5 LAKHS. IT IS ALSO PERTINENT TO POINT OUT THAT THE AFORESAID ENTIRE PURCHASES OF RS.90,65,500/ - HAS BEEN ADDED BY THE A.O. IN THE F .Y. 200 6 - 07 FOR WHICH SEPARATE APPEAL IS PENDING BEFORE THE ITAT AS STATED BY THE LD.COUNSEL FOR THE ASSESSEE. UNDER ANY CIRCUMSTANCES THE ADDITION OF RS.5 LAKHS MADE BY THE A.O. AND CONFIRMED BY THE LD.CIT(APPEALS) IS NOT S USTAINABLE. AFTER PERUSING THE DOCUMENTARY EVIDENCE FILED BY THE ASSESSEE, I AM OF THE CONSIDERED VIEW THAT THE ADDITION IN DISPUTE IS WRONGLY MADE BY THE A.O. AND CONFIRMED BY THE LD. FIRST APPELLATE AUTHORITY. THIS IS NOT SUSTAINABLE IN THE EYES OF LAW . I DELETE THE SAME BY ACCEPTING THE APPEAL FILED BY THE ASSESSEE. ITA NO. 5048/DEL/2014 A.Y. 2009 - 10 ANGAD EXPORTS, NEW DELHI 5 7. IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2015 . SD/ - ( H.S.SIDHU ) JUDICIAL MEMBER DATED: THE 19 TH AUGUST, 2015 *MANGA COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT(A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR