Meena Jewellers Private Limited Part IX , Hyderabad V. Asst. Commissioner of Income Tax, Circle-16(2), Hyderabad

ITA 520/Hyd/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2051 (ITAT-HYDERABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 12-03-2020
• Assessment Year: 2008-2009
• Appeal Filed On: 16-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M NARMADA
• Assessee Lawyers: P MURALI MOHAN RAO
• Keywords: Bogus purchase; Additional evidence; Accommodation entries; Set aside
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC - B , HYDERABAD BEFORE S MT P. MADHAVI DEVI , JUDICIAL MEMBER ITA NO. 520/HYD/2018 ASSESSMENT YEAR: 20 0 8 - 09 MEENA JEWELLERS PVT. LTD. PART IX, HYDERABAD. PAN AAFCM1756R VS. ASST. COMMISSIONER OF INCOME - TAX, CIRCLE 16(2), HYDERABAD. ( A PPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI P. MURALI MOHAN RAO REVENUE BY : S MT. M. NARMADA DATE OF HEARING 12 - 0 3 - 20 20 DATE OF PRONOUNCEMENT 30 - 04 - 2020 O R D E R T H IS IS AN APPEAL OF THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX - 4 , HYDERABAD , DATED 18/12/2017 FOR AY 2008 - 09 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF TRADING IN BULLION, GOLD ORNAMENTS, DIAMONDS AND DIAMOND ETC., FILED ITS RETURN OF INCOME FOR THE AY 2008 - 09 FOR 30/09/2008 ADMITTING TOTAL INCOME OF RS. 32,06,360/ - . THE ASSESSMENT WAS INITIALLY COMPLETED BY MAKING DISALLOWANCES OF BELATED PAYMENT OF EMPLOYEES CONTRIBUTION OF PF & ESI AMOUNTING TO RS. 1,39,472/ - AND DISALLOWANCE OF FBT AMOUNTING TO RS. 37,907/ - . THEREAFTER, THE CASE WAS REOPENED U/S 147 OF THE ACT ON THE GROUND THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES WAS TAKEN 2 ITA NO. 520/HYD/2018 MEENA JEWELLERS PVT. LTD. PART IX, HYD. ACCOMMODATION ENTRIES IN THE NATURE OF BOGUS UNSECURED AND BOGUS PURCHASES DURING FY 2007 - 08 RELEVANT TO AY 2008 - 09 AND THE TOTAL V ALUE OF TRANSACTION IS RS. 10,08,993/ - FROM SHRI RAJENDRA JAIN GROUP, SANJEEV CHOUDHARY GROUP AND DHARMI CHAND GROUP, WHO ARE IN NATURE OF BOGUS SALES AND UNSECURED LOAN OPERATION ACROSS INDIA. 2.1 THE ASSESSEE VIDE ITS LETTER DATED 25/08/2015 SUBMITTED THAT IT HAS NO BUSINESS CONNECTION WHATSOEVER WITH THESE GROUPS DURING THE RELEVANT PERIOD. THE AO, HOWEVER, OBSERVED THAT THE ASSESSEE HAS MADE PURCHASES OF DIAMONDS FROM M/S MOULI MANI IMPEX PVT. LTD., WHICH IS BELONGING TO SHRI RAJENDRA JAIN GROUP, SANJEEV CHOUDHARY GROUP AND DHARMICHAND GROUP. HE OBSERVED THAT ACCORDING TO THE INFORMATION RECEIVED FROM THE DCIT (INV.), THESE PERSONS ARE SOME O F THE ENTRY PROVIDERS OPERATING IN MUMBAI AND SURAT, INDULGING IN PROVIDING ACCOMMODATION ENTRIES IN NATURE OF BOGUS SALES. THE ASSESSEE WAS THEREFORE ASKED TO PRODUCE PURCHASE REGISTERS, SALES REGISTERS AND BANK ACCOUNT STATEMENT IN ORDER TO VERIFY THE BO GUS PURCHASES FROM THESE GROUPS. THE ASSESSEE DID NOT APPEAR AND NOT SUBMITTED ANY INFORMATION. THE AO, THEREFORE, TREATED THE ENTIRE SUM OF RS. 10,08,993/ - AS BOGUS PURCHASES AND BROUGHT IT TO TAX. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CI T(A) CHALLENGING THE VALIDITY OF THE REOPENING AND AGAINST THE MERITS OF THE ADDITION. 3 ITA NO. 520/HYD/2018 MEENA JEWELLERS PVT. LTD. PART IX, HYD. 3. BEFORE THE CIT(A) THE ASSESSEE CONTENDED THE VALIDITY OF THE REOPENING AND SUBMITTED THAT ALL THE PURCHASES HAD BEEN MADE THROUGH CHEQUES ONLY AND, THEREFORE, CANN OT BE TREATED AS BOGUS PURCHASES, PARTICULARLY, WHEN THE AO HAS NOT DOUBTED THE GENUINENESS OF THE SALES. 3.1 THE CIT(A), HOWEVER, OBSERVED THAT DURING THE COURSE OF APPEAL PROCEEDINGS, THE ASSESSEE HAS NOT PROVIDED ANY ADDITIONAL EVIDENCE TO COUNTER THE REASONS POINTED OUT BY THE AO WHILE MAKING THE ADDITION. SHE, THEREFORE, CONFIRMED THE ADDITION. 4. THE LD. CO UNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH THE ASSESSEE HAS MADE DETAILED SUBMISSIONS BEFORE THE CIT(A) ON MERITS, THE CIT(A) HAS SUMMARILY CONFIRMED THE ADDITION. HE, THEREFORE, SOUGHT THAT THE ISSUE SHOULD BE SET ASIDE TO THE FILE OF THE AO FOR RECONSI DERATION OF THE ISSUE ON MERITS. 5. THE LD. DR, HOWEVER, SUPPORTED THE ORDERS OF THE REVENUE AUTHORITIES. 6. HAVING REGARD TO THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD, I FIND THAT BEFORE THE AO ASSESSEE DID NOT APPEAR AND SUBMIT ANY DE TAILS, BUT, BEFORE THE CIT(A), THE ASSESSEE HAD MADE DETAILED SUBMISSIONS. THE CIT(A) SUMMARILY CONFIRMED THE ASSESSMENT ORDER. THEREFORE, IN THE INTEREST OF JUSTICE, I DEEM IT FIT AND PROPER TO REMAND THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION 4 ITA NO. 520/HYD/2018 MEENA JEWELLERS PVT. LTD. PART IX, HYD. TO R ECONSIDER THE ISSUE IN ACCORDANCE WITH LAW AFTER GIVING THE ASSESSEE A FAIR OPPORTUNITY OF HEARING. THE ASSESSEE IS DIRECTED TO FILE ALL THE RELEVANT MATERIAL/EVIDENCE TO SUBSTANTIATE ITS CLAIM. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLO WED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2020. SD/ - ( P. MADHAVI DEVI ) JUDICIAL MEMBER HYDERABAD, DATED: 30TH APRIL, 2020 KV COPY TO: - 1) M/S MEENA JEWELLERS PVT. LTD. PART IX, C/O P. MURALI & CO., CAS., 6 - 3 - 655/2/3, 1 ST FLOOR, SOMAJIGUDA, HYDERABAD - 82 2) AC IT, CIRCLE 16(2), HYDERABAD. 3) CIT (A) 4, HYDERABAD 4 ) PR. CIT - 4, HYDERABAD 5 ) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDERABAD. 6) GUARD FILE S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER