ASST CIT 25(2), MUMBAI V. SHIVAM TEXTILE & PROOFING INDUSTRIES, MUMBAI

ITA 5248/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93036 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 01-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 29-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C W ANGOLKAR
• Assessee Lawyers: AJAY R SINGH
• Keywords: Unexplained expenditure
• Section: 69C

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , , BEFORE SHRI A.D. JAIN , JUDICIAL MEMBER AND SHRI N.K . BILLAIYA, A CCOUNTANT M EMBER / I .T.A. NO . 5248/MUM/2013 ( / ASSESSMENT YEAR : 2010 - 11 THE ACIT - 25(2), BLDG . NO. C - 11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400 051 / VS. M/S. SHIVAM TEXTILE & PROOFING INDUSTRIES, 101, 1 ST FLOOR, MOHAN PALACE, TPS III, 57 TH ROAD, BORIVALI (W), MUMBAI - 400 092 ./ ./ PAN/GIR NO. : AABFS 6463Q ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI C.W. ANGOLKAR / RESPONDENT BY : SHRI AJAY R. SINGH / DATE OF HEARING : 1 6 . 0 7 .2015 / DATE OF PRONOUNCEMENT : 1 6 .0 7 .2015 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE REVENUE IS PREFERRED AGAINST THE ORDER OF THE LD. CIT(A) - 35 , MUMBAI DT. 1 0 .0 5 .201 3 PERTAINING TO ASSESSMENT YEAR 2010 - 11 . THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN DELET ING THE ADDITION OF RS. 1,27,54,500/ - WHICH WAS MADE BY THE AO BY INVOKING THE PR OVISIONS OF SEC. 69C OF THE ACT. ITA. NO . 5248/M/2013 2 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A REGISTERED FIRM AND IS ENGAGED IN THE BUSINESS OF TRADING OF COTTON CANVAS AND TARPAULINS. DURING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE IN PROFIT & LOSS ACCOUNT HAS DEBITED PURCHASES OF RS. 10,94,02,664/ - . THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS OF PURCHASES, TIN AND NAME AND ADDRESSES OF PARTIES FROM WHOM PURCHASES WERE MADE. THE ASSESSEE FILED THE DETAILS ALONGWITH DOCUMENTARY EVIDENCES. 2.1. ON THE BASIS OF INFORMATION RECEIVED FROM THE SALES TAX DEPARTMENT, MUMBAI REGARDING SUSPICIOUS PARTIES WITH WHOM THE A SSESSEE HAS MADE PURCHASES. THE TIN NO. OF THE SAID PARTY IS 27940711314 AND THE AMOUNT OF PURCHASES IS RS. 1,27,54,500/ - . THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE ALLEGED PURCHASES FROM THIS PARTY SHOULD NOT BE TREATED AS UNEXPLAINED AND ADDED BACK TO THE TOTAL INCOME. THE ASSESSEE FILED A DETAILED REPLY ALONGWITH COPIES OF PURCHASE BILLS, BANK STATEMENT AND CONFIRMATION FROM M/S. KRIPA MULTI TRADE PVT. LTD. THE ASSESSEE STRONGLY CONTENDED THAT THE FACT THAT M/S. KRIPA MULTI TRADE PVT. LTD., IS A HAWA LA DEALER IS NEVERKNOWN TO IT. THE AO DISMISSED THE CLAIM OF THE ASSESSEE AND ADDED RS. 1,27,54,500/ - AS UNEXPLAINED EXPENDITURE U/S. 69C OF THE ACT. 3. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) AND REITERATED ITS CONTENTI ON. AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS, THE LD. CIT(A) HELD AS UNDER: I HAVE CONSIDERED THE STAND OF THE A.O. AS WELL AS FACTUAL AND LEGAL SUBMISSIONS OF THE APPELLANT. I HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER, THE RELEVANT DETA ILS AND REPORTS RECEIVED FROM THE SALES - TAX DEPARTMENT AND ALSO THE SUBMISSIONS AND THE CASE LAWS FILED, BY THE APPELLANT .IN THIS CASE IT IS SEEN THAT ALL THE PURCHASE MADE ARE RECORDED IN THE REGULAR BOOKS OF ITA. NO . 5248/M/2013 3 ACCOUNTS OF THE APPELLANT WHICH HAS BEEN TA X AUDITED. COPIES OF PURCHASE INVOICES, BANK STATEMENT AND LEDGER ACCOUNTS WERE SUBMITTED BEFORE THE AO BUT HE DID NOT GIVE ANY INDEPENDENT COMMENTS ON THE SAME. AO HAS NOT DISPUTED THAT ALL PAYMENTS ARE MADE BY CROSSED CHEQUES AND WHICH ARE DULY REFLECT ED IN THE BANK STATEMENTS WERE OUT OF REGULAR BANK ACCOUNTS AND WERE RECORDED: IN THE REGULAR BOOKS OF ACCOUNTS REFLECTING THE SOURCE OF, PAYMENTS. FURTHER, THE CORRESPONDING SALES HAVE BEEN ACCEPTED BY THE AO AND, NO DISCREPANCY WAS NOTICED BY THE A.O. NO OPPORTUNITY, WAS I GRANTED TO THE APPELLANT FOR CROSS EXAMINATION OF THE CREDITORS / THE SUPPLIERS, THE IN FORMATIONS ON THE WEBSITE OF THE SALES TAX DEPARTMENT ARE ONLY INDICATIVE AND NOT CONCLUSIVE AND IN NO WAY ESTABLISHES THAT THE PURCHASES OF THIS PARTICULAR APPELLANT ARE NOT GENUINE. I HAVE PERSONALLY LOGGED ON WWW.MAHAVAT.GOV.IN AND FOUND THAT THE WEBSITE ONLY GIVES THE NAMES OF 'SUSPICIOUS. DEALERS'. ANY CASE CAN NOT BE DECIDED ON THE BASIS OF SUSPICION ONLY RATHER IT HAS TO BE CORROBORATED WITH CLINCHING EVIDENCES. AGAINST THE APPELLANT AND THE AO HAS NOT MADE FULL FLEDGED INDEPENDENT INQUIRIES IN THIS DIRECTIONS. 4. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 5. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE FINDINGS OF THE AO. 6. PER CONTRA, THE LD. COUNSEL FOR THE ASSESSEE ADVANCED SIMILAR ARGUMENTS WHICH WERE MADE BEFORE THE FIRST APPELLATE AUTHORITY. 7. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE ALSO CONSIDERED THE JUDICIAL DECISIONS RELIED UPON BY THE LD. CIT(A) (SUPRA). IT IS AN UNDISPUTED FACT THAT NO ADVERSE FINDING HAS BEEN GIVEN IN SO FAR AS SALES ARE CONCERNED. IT IS A SETTLED PROPOSITION THAT WITHOUT PURCHASES , THERE CANNOT BE ANY SALES. IT IS ALSO AN UNDISPUTED FA CT THAT NO ADVERSE INFERENCES HAVE BEEN DRAWN IN SO FAR AS THE PURCHASE INVOICE OF M/S. KRIPA MULTI TRADE PVT. LTD IS CONCERNED. WE FIND THAT THE ASSESSEE HAS FILED COMPLETE DETAILS OF PURCHASES ABOVE RS. 2, 00,000/ - MADE DURING THE YEAR UNDER CONSIDERAT ION. THE DETAILS ARE EXHIBITED AT PAGES 22 & 23 OF THE PAPER BOOK. WE ALSO FIND THAT THE ITA. NO . 5248/M/2013 4 PAYMENTS MADE BY THE ASSESSEE TOWARDS PURCHASES ARE DULY REFLECTED IN THE BANK STATEMENTS OF THE ASSESSEE WHICH ARE EXHIBITED AT PAGES 71 TO 80 OF THE PAPER BOOK. C ONSIDERING ALL THESE FACTS IN THE LIGHT OF THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS M/S. NIKUNJ EXIMP ENTERPRISES PVT. LTD IN APPEAL NO. 5604 OF 2010 WHICH HAS BEEN CONSIDERED AND RELIED UPON BY THE LD. CIT(A), WE DO NO T FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. OR DER PRONOUNCED IN THE OPEN COURT ON 1 6 TH JU LY , 2015 SD/ - SD/ - ( A.D. JAIN ) (N.K. BILLAIYA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED : 1 6 TH JU LY , 2015 . . ./ RJ , SR. PS / 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