DY. C.I.T. CIR-.1, Nagpur V. SHRI HEMRAJ PUNEKAR,

ITA 515/NAG/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7659 (ITAT-NAGPUR)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 22-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A R NINAWE
• Keywords: Bogus purchase; Opportunity of being heard

Judgement Text

1 ITA NO. 515/ NAG/2016. IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. NO. 5 15 /NAG/2016 ASSESSMENT YEAR : 200 9 - 10. DY. COMMISSIONER OF INCOME - TAX, SHRI HEMRAJ PUNEKAR, CIRCLE - 1,NAGPUR. VS. NAGPUR. PAN AHYPP 2118H. APPELLANT. RESP ONDENT. APPELLANT BY : SHRI A.R. NINAWE. RESPONDENT BY : SHRI MAHAVIR ATAL. DATE OF HEARING : 20 - 12 - 2016 DATE OF PRONOUNCEMENT : 10 TH JANUARY, 2017 . O R D E R. T HIS APPEAL BY THE R EVENUE IS DIRECTED AGAINST ORDER OF L EARNED CIT(APPEALS) - I, NAGPUR DATED 14/07/2016 AND PERTAINS TO ASSESSMENT YEAR 2009 - 10 . T HE GROUND OF APPEAL READ S AS UNDER : ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION OF RS.35,48,955/ - ON ACCOUNT OF BOGUS PURCHASES FROM M/S P.M. TRADING CO. AND M/S RELIANCE METAL ALLOW. 2. I N THIS CASE THE ASSESSMENT WAS REOPENED ON INFORMATION RECEIVED FROM THE S ALES T AX DEPARTMENT THAT THE PURCHASES SHOWN BY THE ASSESSEE FROM TWO PARTIES NAMELY. M/S . P.M. TRADING CO. AMOUNTING TO RS.30,63,270 AND M/S RELIANCE METAL ALLOY AMOUNTING TO RS.4,85,685/ - DURING F.Y. 2008 - 09 IN H IS BOOKS WERE BOGUS. THESE PARTIES HAD DENIED MAKING ANY SALES T O THE ASSESSEE. IN THE COURSE OF ASSESSMENT A SSESSING O FFICER GAVE NOTICE TO THE ASSESSEE ASKING FOR THE NECESSARY DETAILS INCLUDING A COPY OF BILLS ETC. OF THESE PARTIES FOR 2 ITA NO. 515/ NAG/2016. TRANSPORTATION AND THE NECESSARY RECEIPT. HOWEVER DESPITE REPEATED REMINDERS TH ERE WAS NO RESPONSE FROM THE ASSESSEE. H ENCE A SSESSING O FFICER MADE THE IMPUGNED ADDITION CONCLU DING AS UNDER : THE ASSESSEE DID NOT SUBMIT HIS SAY ON THE QUERY, MORE OVER NO TRANSPORTATION DETAILS AND DETAILS OF OCTROI PAID HAVE BEEN FILED BY THE ASSESS EE. THE SUPPLIERS HAVE, BEFORE THE SALES TAX AUTHORITIES, CONFESSED THAT THEY HAVE NOT SOLD ANY MATERIAL TO THE ASSESSEE AND ONLY BILLS WERE ISSUED AND THERE WAS NO DELIVERY OF GOODS. IN VIEW OF THESE FACTS AND THE NON SUBMISSION OF REPLY BY THE ASSESSEE TO THE SHOW CAUSE NOTICE DATED 24.12.2014, IT IS HELD THAT THE ASSESSEE HAD NOT ACTUALLY PURCHASED THESE GOODS AND SAME WERE JUST THE BOOKS ENTRIES. THIS AMOUNT OF RS.35,48,955/ - IS DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE ASS ESSEE. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 ARE INITIATED SEPARATELY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 3. UPON ASSESSEE'S APPEAL L EARNED CIT(APPEALS) DELETED THE ADDITION BY HOLDING THAT COPIES OF DENIALS OF THE P ARTIES W ERE NOT GIVEN TO THE ASSESSEE AND THAT ASSESSEE HAS GIVEN ALL THE NECESSARY DETAILS AND THE A SSESSING O FFICER HAD NOT EXAMINE D THEM . HENCE LEARNED CIT(APPEALS) DELETED THE ADDITION. 4. AGAINST ABOVE ORDER R EVENUE IS IN APPEAL BEFORE THE ITAT 5. I HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. I FIND THAT ASSESSEE HAS NOT GIVEN ANY DETAILS WHATSOEVER REGARDING THE ENQUIRY DURING ASSESSMENT PROCEEDINGS DESPITE NOTICE FROM THE A SSESSING O FFICER. HOWEVER L EARNED CIT(APPEALS) HAS GIVEN A FINDING THAT ALL THE DETAILS WERE GIVEN BEFORE THE A SSESSING O FFICER, BUT THE A SSESSING O FFICER HAS NOT EXAMINE D THE SAME. I FIND THAT THIS IS A VERY CONTRADICTORY OBSERVATION . HOW AFTER BEING DETECTED BY THE SALES TAX DEPARTMENT FOR BOGUS PURCHASES, ASSESSEE CAN BE GRANTED RELIEF IF HE FAILS TO RESPOND TO AO. NOTICE IN THIS REGARD IS BEYOND COMPREHENSION. WHEN THE ASSESSEE HAD NOT PROVIDED THE NECESSARY DETAILS BEFORE THE A SSESSING O FFICER IT WAS INCUMBENT UPON THE L EARNED CIT(APPEALS) TO REMAND THE MATTER BEFORE THE A SSESSING O FFICER. 3 ITA NO. 515/ NAG/2016. 6. ACCORDINGLY IN THE INTEREST OF JUSTICE IN MY CONSIDERED OPINION THE MATTER NEEDS TO BE REMITTED TO THE FILE OF THE A SSESSING O FFICER. ASSESSING OFFICER IS DIRECTED TO EXAMINE THE VERACITY OF THE SUBMISSIO NS MADE BEFORE THE L EARNED CIT(APPEALS) . NEEDLESS TO ADD ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. 7. IN THE RESULT THIS APPEAL BY THE R EVENUE STANDS ALLOWED FOR STATISTICAL PURPOSES ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH DA Y OF JANUARY., 2017. SD/ - ( SHAMIM YAHYA) ACCOUNTANT MEMBER. NAGPUR, DATED: 10 TH JANUARY, 2017. COPY FORWARDED TO : 1. SHRI HEMRAJ PUNEKAR, PROP. OF M/S VAIDEHI - E - LINK, 302 SUBHAM APARTMENTS, LANDMARK COMPLEX, BARKUTE LAYOUT, NAGPUR - 440010. 2. D.C.I.T., CIRCLE - 1, NSGPUR. 3. C.I.T. - I, NAGPUR. 4. CIT(APPEALS), - I, NAGPUR. 5. D.R., ITAT, NAGPUR. 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NA GPUR. WAKODE.