CASSETTE WORLD INDIA PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICER-5(1)(3), MUMBAI

ITA 5203/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7057 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARIDR
• Assessee Lawyers: PRADEEP SHARMA
• Keywords: Bogus purchase; Opportunity of being heard
• Section: 69C; 142(1); 133(6); 148

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.5203/MUM/2017 ASSESSMENT YEAR: 2009-10 M/S. CASSETTE WORLD INDIA PRIVATE LIMITED, 343, RAAJESH BUILDING, OPP. LAMINGTON ROAD POLICE STATION, LAMINGTON ROAD, MUMBAI-400007 / VS. INCOME TAX OFFICER-5(1)(3) AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-40020 / ASSESSEE / REVENUE P.A. NO. AABCC5731L $ % & / ASSESSEE BY SHRI PRADEEP SHARMA $ % & / REVENUE BY SHRI RAM TIWARI-DR / DATE OF HEARING 08/06/2018 & / DATE OF ORDER: 08/06/2018 ITA NO5203/MUM/2017 M/S. CASSETTE WORLD INDIA PVT. LTD. 2 & / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 28/06/2016 OF THE FIRST APPELLATE AUTHORITY, MUMBAI , SUSTAINING THE ADDITION OF RS.4,37,010/- @ 12.5% OF THE ALLEGED BOGUS PURCHASES OF RS.34,96,076/-. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESS EE, SHRI PRADEEP SHARMA, CONTENDED THAT NECESSARY DETAI LS FOR PURCHASES MADE FROM THREE PARTIES WERE FILED BY THE ASSESSEE FOR WHICH OUR ATTENTION WAS INVITED TO THE ASSESSME NT ORDER. MY ATTENTION WAS INVITED TO PARA 4.1 OF THE ASSESSM ENT ORDER, WHEREIN IT HAS BEEN CATEGORICALLY MENTIONED THAT TH E ASSESSEE SUBMITTED THE ADDRESSES OF THE PARTIES, COPIES OF P URCHASE BILLS, COPIES OF LEDGER ACCOUNT OF THE PARTIES. MY ATTENTION WAS FURTHER INVITED TO PAGE-35 OF THE PAPER BOOK, WHERE IN, REGISTRATION OF M/S ANKITA IMPEX WAS CANCELED BY TH E SALES TAX DEPARTMENT WITH EFFECT FROM 14/08/2006 WHICH WA S CHALLENGED BEFORE THE HON'BLE BOMBAY HIGH COURT, WH EREIN, THE MATTER WAS SET-ASIDE TO THE FILE OF THE MAHARAS HTRA SALES TAX TRIBUNAL. THE CRUX OF THE ARGUMENT IS THAT EVEN M/S ANKITA IMPEX WAS A GENUINE PARTY. IT AS EMPATHETIC ALLY CLAIMED THAT THE PURCHASES MADE FROM THESE PARTIES ARE ITA NO5203/MUM/2017 M/S. CASSETTE WORLD INDIA PVT. LTD. 3 GENUINE, THEREFORE, THE ADDITION MAY BE DELETED. ON THE OTHER HAND, SHRI RAM TIWARI, LD. DR STRONGLY DEFENDED THE ADDITION BY CONTENDING THAT EVEN IF IT IS PRESUMED THAT THE PURCHASES ARE GENUINE THE ASSESSEE MAY DIRECTED TO PRODUCE TH ESE PARTIES BEFORE THE LD. ASSESSING OFFICER AND ALSO T O FILE CONFIRMATION FROM THESE PARTIES. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE IS ENGAGED AS A DEALER IN COM PUTERS, TELEPHONES AND ACCESSORIES, FILED ORIGINAL RETURN D ECLARING INCOME OF RS.22,53,650/- WAS FILED BY THE ASSESSEE ON 07/07/2019, WHICH WAS PROCESSED ON 16/12/2010 ACCEP TING THE RETURN INCOME. SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED WITH THE ISSUANCE OF NOTICE UNDER SECTION 148 OF THE ACT. THE ASSESSEE FILED THE RETURN ON 04/02/2014. N OTICE UNDER SECTION 143(2) AND 142(1) OF THE ACT WERE SER VED UPON THE ASSESSEE TO WHICH THE ASSESSEE ATTENDED THE PRO CEEDINGS. AS PER THE REVENUE, AN INTIMATION WAS RECEIVED FROM THE OFFICE OF THE COMMISSIONER THAT THE ASSESSEE HAS MA DE BOGUS PURCHASES AMOUNTING TO RS.34,97,726/- FROM M/S SAND ESH SALES PVT. LTD., M/S KALPATARU TRADING COMPANY, M/S UMIYA ITA NO5203/MUM/2017 M/S. CASSETTE WORLD INDIA PVT. LTD. 4 SALES AGENCY PVT. LTD. & M/S ANKITA IMPEX. THE ASSE SSEE WAS ASKED TO SUBMIT THE NECESSARY DETAILS OF SUCH PURCH ASES, PROOF OF PAYMENT MADE TO THE PARTIES, DELIVERY DETA ILS OF PURCHASE, VEHICLES NUMBERS, TRANSPORTATIONS BILLS, PROOF OF TRANSPORTATION CHARGES, ETC WITH RESPECT TO THE PUR CHASES CLAIM TO HAVE MADE FROM THESE PARTIES ALONG WITH TH E STOCK REGISTER. THE ASSESSEE SUBMITTED THE ADDRESSES OF T HE PARTIES, PURCHASE BILLS, COPY OF THE LEDGER ACCOUNT OF THE P ARTIES EXCEPT M/S KALPATARU TRADING COMPANY. DUE TO NON-FI LING OF CONFIRMATION FROM THE PARTIES AND RETURN OF NOTICES ISSUED UNDER SECTION 133(6) AS UNSERVED FROM M/S SANDESH S ALES PVT. LTD. & M/S UMIYA SALES AGENCY PVT. LTD., THE P URCHASES WERE TREATED AS NON-GENUINE AND CONSEQUENTLY, THE A DDITION WAS MADE UNDER SECTION 69C OF THE ACT. THERE IS NO DISPUTE TO THE FACT THAT PART DETAILS WERE FILED BY THE ASS ESSEE ALONG WITH THE ADDRESSES. THE REGISTRATION OF M/S ANKITA SALES WAS CANCELLED BY THE SALES TAX DEPARTMENT WHICH WAS DIR ECTED TO BE EXAMINED BY THE MAHARASHTRA SALES TAX TRIBUNAL A S DIRECTED BY THE HON'BLE HIGH COURT. THE HON'BLE JUR ISDICTIONAL HIGH COURT IN CIT VS NIKUNJ EXIM ENTERPRISES PVT. L TD. (2015) 372 ITR 619 (BOM.) HELD/OBSERVED AS UNDER:- ITA NO5203/MUM/2017 M/S. CASSETTE WORLD INDIA PVT. LTD. 5 7. WE HAVE CONSIDERED THE SUBMISSION ON BEHALF OF THE REVENUE. HOWEVER, FROM THE ORDER OF THE TRIBUNA L DATED APRIL 30, 2010, WE FIND THAT THE TRIBUNAL HAS DELETED THE ADDITIONS ON ACCOUNT OF BOGUS PURCHASES NOT ONLY ON THE BASIS OF STOCK STATEMENT, I.E., RECONCILIATION STATEMENT BUT ALSO IN VIEW OF THE OT HER FACTS. THE TRIBUNAL RECORDS THAT THE BOOKS OF ACCOU NT OF THE RESPONDENT-ASSESSEE HAVE NOT BEEN REJECTED. SIMILARLY, THE SALES HAVE NOT BEEN DOUBTED AND IT I S AN ADMITTED POSITION THAT SUBSTANTIAL AMOUNT OF SAL ES HAVE BEEN MADE TO THE GOVERNMENT DEPARTMENT, I.E., DEFENCE RESEARCH AND DEVELOPMENT LABORATORY, HYDERABAD. FURTHER, THERE WERE CONFIRMATION LETTERS FILED BY THE SUPPLIERS, COPIES OF INVOICES FOR PURC HASES AS WELL AS COPIES OF BANK STATEMENT ALL OF WHICH WOULD INDICATE THAT THE PURCHASES WERE IN FACT MADE . IN OUR VIEW, MERELY BECAUSE THE SUPPLIERS HAVE NOT APPEARED BEFORE THE ASSESSING OFFICER OR THE COMMISSIONER OF INCOME-TAX (APPEALS), ONE CANNOT CONCLUDE THAT THE PURCHASES WERE NOT MADE BY THE RESPONDENT-ASSESSEE. THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER OF INCOME-TAX (APPEALS) HAVE DISALLOWED THE DEDUCTION OF RS. 1.33 CRORES ON ACCOUNT OF PURCHASES MERELY ON THE BASIS OF SUSPICI ON BECAUSE THE SELLERS AND THE CANVASSING AGENTS HAVE NOT BEEN PRODUCED BEFORE THEM. WE FIND THAT THE ORDER OF THE TRIBUNAL IS WELL A REASONED ORDER TAKI NG INTO ACCOUNT ALL THE FACTS BEFORE CONCLUDING THAT T HE PURCHASES OF RS. 1.33 CRORES WAS NOT BOGUS. NO FAUL T CAN BE FOUND WITH THE ORDER DATED APRIL 30, 2010, O F THE TRIBUNAL. CONSIDERING THE TOTALITY OF FACT AND THE RATIO LAID DOWN BY HON'BLE JURISDICTIONAL HIGH COURT IN THE AFORESA ID CASE, WE DIRECT THE ASSESSEE TO PRODUCE THE PARTIES BEFORE T HE LD. ASSESSING OFFICER SO THAT THE GENUINENESS OF THE PU RCHASES CAN BE EXAMINED BY HIM. EVEN AS PER MANDATE OF ARTI CLE-265 ITA NO5203/MUM/2017 M/S. CASSETTE WORLD INDIA PVT. LTD. 6 OF CONSTITUTION OF INDIA, ONLY DUE TAXES HAS TO BE LEVIED AND COLLECTED. THE ASSESSEE IS ALSO DIRECTED TO FURNIS H THE NECESSARY DETAILS IN SUPPORT OF ITS CLAIM. THE ASSE SSEE BE GIVEN OPPORTUNITY OF BEING HEARD. THUS, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESEN CE OF LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLU SION OF THE HEARING ON 08/06/2018. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 08/06/2018 F{X~{T? P.S / ! & $ )!*+ ,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * / THE CIT, MUMBAI. 4. ) ) * / CIT- , MUMBAI 5. +,- ' , ) '#$ ' / , / DR, ITAT, MUMBAI 6. -0 1$ / GUARD FILE. ITA NO5203/MUM/2017 M/S. CASSETTE WORLD INDIA PVT. LTD. 7 & / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI