DCIT-CIR 3(3), MUMBAI V. M/s. SURAJ DIAMONDS DEALERS LTD, MUMBAI

ITA 5518/MUM/2008

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7276 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 02-08-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 01-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REENA JHA TRIPATHI
• Assessee Lawyers: DI LIP J THAKKAR
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI V.DURGA RAO, JM ITA NO.5518/MUM/2008 : ASST.YEAR 2002-2003 THE DY.COMMISSIONER OF INCOME-TAX CIRCLE 3(3) MUMBAI. VS. M/S.SU-RAJ DIAMOND DEALERS LIMITED 73-C SURAJ HOUSE, CROSS ROAD MIDC, MAROL, ANDHERI (EAST) MUMBAI 400 093. PAN : AAACS7142N. (APPELLANT) (RESPONDENT) APPELLANT BY : MS.REENA JHA TRIPATHI RESPONDENT BY : S/SHRI DILI P J.THAKKAR & RAJESH P.SHAH DATE OF HEARING : 02.08.2011 DATE OF PRONOUNCEMENT : 05.08.2011 O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE IS DIRE CTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 30.04.2008 IN RELATION TO THE ASSESSMENT YEAR 2002-2003. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE DELE TION OF ADDITION OF RS.16.41 CRORES MADE BY THE ASSESSING OFFI CER ON ACCOUNT OF BOGUS CLAIM MADE BY THE ASSESSEE UNDER SUNDRY CREDITORS. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S.143(3). THEREAFTER IT WAS REOPENED BY WAY OF NOTICE U/S.148. THE AS SESSEE HAD SHOWN BALANCE OF RS.15.38 CRORES PAYABLE TO M/S.SURAJ DIAMONDS I NDUSTRIES LIMITED AND RS.1.03 CRORES AS PAYABLE TO M/S.HIRA EXPORTS PRIVATE LIMI TED. THE ASSESSING OF FICER OPINED THAT NO PURCHASES WERE MADE FROM THESE TWO PARTIE S. THE ASSESSEE WAS CALLED UPON TO EXPLAIN AS TO WHY THE SAID AMOUNTS BE NOT DISALLOWED A ND ADDED BACK TO THE TOTAL INCOME. IN RESPONSE TO THE NOTICE ISSUED BY THE A.O., THE ASSESSEE ST ATED THAT NO PURCHASES WERE MADE FROM SURAJ DIAMONDS INDUSTRIES LIMITED AND HIRA EXPORTS PRIVATE LIMITED BUT THE CREDITS IN THEIR AC COUNTS REPRESENTED ADVANCE RECEIVED FROM ITA NO.5518/MUM/2008 M/S.SU-RAJ DIAMOND DEALERS LIMITED. 2 THEM AGAINST SALES. IT WAS SHOWN THAT TWO CHEQUES WERE RECEIVED FROM SURAJ DIAMONDS INDUSTRIES LIMITED AMOUNTING TO RS.48 LAKHS AND RS.14.90 CRORES TOTALING TO RS.15.38 CRORES AND ONE CHEQUE WAS RECEIVED FROM HIRA EXPORTS PRIVATE LIMITED FOR RS.1.03 CRORES. THE ASSESSEE CLAIME D THAT THE AMOUNTS WERE RECEIVED AS ADVANCE AGAINST THE SALES AND SINCE THE SAL ES WERE NOT MADE, THESE WERE SHOWN AS LIABILITY. THE ASSESSING OF FICER WAS NOT CONVINCED . HE OBSERVED FROM THE ASSESSEES BANK ACC OUNT IN RESPECT OF TRANSACTION WITH SURAJ DIAMONDS INDUSTRIES LIMITED THAT ON THE DATES OF RECEIPT OF TH ESE AMOUNTS, THE ASSESSEE ISSUED CHEQUES TO OTHER PARTIES. AS REGARDS THE TRANSACTION WITH HIRA E XPORTS PRIVATE LIMITED, THE A.O. OBSERVED THAT THERE WAS A CREDIT ENTRY ON 30.03.2002 OF RS.1.03 CRORES WHEREAS THE BANK STATEMENT INDICATED TH E DATE OF CREDIT ON 24.04.2002. HE, THEREFORE, MADE ADDITION OF RS.16.41 CRORES , WHICH CAME TO BE DELETED IN THE FIRST APPEAL. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERUSING THE RELE VANT MATERIAL ON RECORD WE ARE UNABLE TO FIND ANY SUPPORT IN THE VIEW POINT OF THE ASSESSING OFFICER FOR THE REASON THAT IN RESPECT OF TRANSACTI ON WITH SURAJ DIAMONDS INDUSTRIES PRIVATE LIMITED, THE ASSESSEE RECE IVED THE AMOUNTS THROUGH CHEQUES WHICH WERE CREDITED IN THE ACCOUNT OF THIS PARTY. HOW THIS AMOUNT WAS UTILIZED CANNOT BE A REASON FOR DISALLOWANCE MORE SPECIFICALLY WHEN THE CRED ITOR ALSO AFFIRMED THE FACT OF HAVING ADVANCED LOAN TO THE ASSESS EE AGAINST THE SALES TO BE MADE. SIMILARLY AS REGARDS HIRA EXPORTS PRIVATE LIMITED THE A SSESSEE RECEIVED CHE QUE ON 31.3.2002 AND SHOWED IT TO THE CREDIT OF TH E SAID PARTY. IT WAS ONLY IN THE NEXT MONTH THAT THE CHEQUE WAS CLEARED AND THE BANK CREDITE D THE ACCOUNT OF THE ASSESSEE WITH THE SAID AMOUNT. THERE IS ABSOLUTELY NOTHING ON RECO RD TO INDICATE, EVEN REMOTELY, THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM SU RAJ DIAMONDS INDUSTRIES PRIVATE LIMITED AND HIRA EXPORTS PRIVATE LIMITED WERE BOGUS IN ANY MANNER. WE, THEREFORE, APPROVE THE VIEW TAKEN BY THE LEARNED CIT(A) ON THIS ISSUE. ITA NO.5518/MUM/2008 M/S.SU-RAJ DIAMOND DEALERS LIMITED. 3 4. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN TH E OPEN COURT ON THIS 05 TH DAY OF AUGUST, 2011. SD/- SD/- (V.DURGA RAO) (R.S.SYAL) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 05 TH AUGUST, 2011. DEVDAS*` COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXXII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.