ACIT 25(3), MUMBAI V. BIPIN NANUBHAI PANCHAL, MUMBAI

ITA 5672/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2040 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 09-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIPH
• Assessee Lawyers: R C MODI; KETKI RAJESHIRKE
• Keywords: Unexplained investment
• Section: 69C

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI , , , BEFORE SHRI JOGINDER SINGH, J UDICIAL M EMBER , A ND SHRI RAM IT KOCHAR , A CCOUNTANT M EMBER ITA NO . 5672 /MUM/20 14 ASSESSMENT YEAR: 20 1 1 - 1 2 ACIT - 25(3), ROOM NO. 308, 3 RD FLOOR, BUILDING NO. C - 11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI - 51 / VS. SHRI BIPIN NANUBHAI PANCHAL, PLOT NO. 37, PUSHPA KUNJ BUNGALOW, ROAD NO.8, SECTOR - 2, CHARKOP, KANDIVALI (WEST) MUMBAI - 57 ( / REVENUE) ( /ASSESSEE) P.A. NO. AAJPP 1321 J / REVENUE BY SHRI NEIL PHILIPH - DR / ASSESSEE BY SHRI R.C. MODI CA & MS. KETKI RAJESHIRKE - CA / DATE OF HEARING : 0 1 /1 1 /201 6 / DATE OF ORDER : 02 / 1 1 /2016 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 28/07 /201 4 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI . BIPIN NANUBHAI PANCHAL ITA NO S . 5672 /MUM/2014 2 2. THE ONLY GROUND RAISED BY THE REVENUE PERTAINS TO DELETING THE ADDITION OF RS. 49,73,005/ - MADE UNDER SECTION 69C OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) . DURING HEARING THE LD DR, SHRI NEIL PHI LIPH DEFENDED THE ADDITION MADE BY THE ASSESSING OFFICER BY CONTENDING THAT WHILE GRANTING RELIEF TO THE ASSESSEE THE LD. COMMISSIONER OF INCOME TAX (APPEAL) DID NOT APPRECIATE THE FACTS PROPERLY AS THE ASSESSEE COULD NOT PRODUCE ANY EVIDENCE TO SUBSTANTIA TE THAT THE PURCHASED WERE GENUINE . 2.1. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSEE SHRI R.C. MODI ALONG WITH MS. KETKI RAJESHIRKE DEFENDED THE CONCLUSION DRAWN BY THE LD. FAA BY CONTENDING THAT NECESSARY EVIDENCE WAS DULY PRODUCED BY THE ASSESS EE AND WAS JUSTIFIABLY APPRECIATED BY THE LD. COMMISSIONER OF INCOME TAX (APPEAL) . 2.2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION , WE ARE REPRODUCING HEREUNDER , THE RELEVANT FINDI NG RECORDED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR READY REFERENCE AND ANALYSIS : - I HAVE GONE THROUGH THE FINDINGS OF THE AO A ND THE SUBMI SS I ONS OF THE APPELLANT WITH REGARD TO THE ABOVE. THE MAIN POINT BEING MADE BY THE AO AS BROUGHT OUT I N HER CONCLUSION ABOVE ' IS . THAT THE PURCHASES AS SUCH ARE NOT BOGUS . HOWEVER, WHAT SHE HAS DOUBTED IS THAT THESE DEALERS DID NOT SEEM TO BE GENUINE SINCE THEY APPEAR I N THE LI ST OF SALES TAX DEPARTMENT AS SUSPICIOUS DEALERS. INTERESTINGLY THE AO HAS A CCEPTED THE VERS I ON BIPIN NANUBHAI PANCHAL ITA NO S . 5672 /MUM/2014 3 THAT SOMEHOW THE GOODS HAVE ENTERED INTO THE REGULAR BUSINESS AND SHE CONCLUDES THAT 'THE AS SESSEE HAS INCURRED EXPENDITURE ON SUCH PURCHASES WHICH IS NOT EXPLAINED. THE PURCHASES ARE NOT BEING TREATED AS BOGUS OR SHAM, RATHER THE EX PENDITURE ON SUCH PURCHASES WHICH IS NOT EXPLAINED. IT IS NOT CLEAR AS TO WHAT DOES THE ASSESSING OFFICER MEAN WHEN SHE SAYS THAT THE EXPENDITURE ON PURCHASES IS UNEXPLAINED WHEN SHE IS NOT INVESTIGATING ABOUT THE SOURCE OF PAYMENT MADE BY THE APPELLANT T O THE SELLERS INCLUDING THE 7 SELLERS MENTIONED ABOVE? THE ASSESSING OFFICER HAS ALSO NOT PROVED HER OTHER CONTENTION THAT EVEN THOUGH THE APPELLANT MADE PAYMENTS BY ACCOUNT PAYEE CHEQUES THEN THE SAID AMOUNTS WERE WITHDRAWN IN CASH BY THE SELLER AND THEN HOW THE SAME IS REMITTED BA C K TO THE APPELLANT. IN THE ABSENCE OF SUCH FIND INGS AND ALSO IN LIGHT OF THE FACT THAT THE O IS HERSELF ACCEPTING THAT PURCHASES HAVE BEEN MADE, THE ISSUE OF UNEXPLAINED INVESTMENT DOES NOT APPEAL TO BE THE CASE OF THE APPELL ANT. F URTHERMORE, THE APPELLANT HAS SUBMITTED COPY OF PURCHASE BILLS, COPY OF DELIVERY CHALLANS, VOUCHERS FOR FREIGHT INSURED CHARGES AND ALSO EXTRACT OF GOODS INWARD REGISTER APART FROM THE EVIDENCE OF HAVING MADE THE PAYMENTS IN CHEQUE AND THE MVAT REGI STRATION DETAILS OF SUPPLIES. IN THE LIGHT OF THE ABOVE FACTS, I AM INCLINED TO AGREE WITH THE SUBMISSIONS OF THE APPELLANT THAT THE PURCHASES CANNOT BE TREATED AS BOGUS OR DOUBTFUL WHEN HE HAS DISCHARGED HIS ENTIRE ONUS TO SUBSTANTIATE THE PURCHASES MADE BY HIM. MERELY BECAUSE THE SELLERS APPEAR IN THE LIST OF SUSPICIOUS DEALERS WOULD NOT BE ENOUGH TO DOUBT THE GENUINENESS OF PURCHASES FROM THE ABOVE PARTIES IN LIGHT OF THE ABOVE FACTS. 7. IN THE RESULT, THE APPEAL IS ALLOWED. 2.3 IF THE OBSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXTAPOSITION AND ANALYZED, WE NOTE THAT WHILE DENY ING THE RELIEF TO THE ASSESSEE , THE LD ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE LIST OF PERSONS, FROM WHOM PURCHASES WERE CLAIM BIPIN NANUBHAI PANCHAL ITA NO S . 5672 /MUM/2014 4 TO BE MADE . HOWEVER, THE LD . ASSESSING OFFICER , ON THE BASIS OF THE LIST OF SUSPICIOUS DEALER BY THE SALES - TAX DEPAR TMENT MADE THE ADDITION . FACT REMAINS THAT THE PAYMENTS WERE MADE THROUGH CROSSED ACCOUNT PAYEE CHEQUES AND CREDITED TO THE RESPECTIVE ACCOUNT. THERE IS NO EVIDENCE ON RECORD THAT THE CASH WAS WITHDRAWN AND REMITTED TO THE PURCHASE OF. THE ASSESSEE FURN ISHED THE RELEVANT DETAILS OF THE PARTIES AS HAS BEEN MENTIONED AT PAGE NO. 7 OF THE IMPUG N ED ORDER . THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DULY CONSIDERED THE FACTUAL MATRIX AND FOUND THAT THE VAT REGISTRATION NUMBER OF ALL THE PARTIES WERE VALID A T THE TIME WHEN PURCHASES WERE MADE BY THE ASSESSEE. THE ASSESSEE DULY OFFERED THE EXPLANATION WITH RESPECT TO GENUINENESS OF THE PURCHASES AND THE DOCUMENTS RELIED UPON BY THE ASSESSEE WERE NOT FOUND TO BE FICTITIOUS . THE CONTENTION OF THE ASSESSING OFF ICER THAT CASH WAS WITHDRAWN AND RETURNED BACK TO THE PARTIES IS ALSO NOT PROVED, EVEN THERE IS NO SUCH FINDING IN THE ASSESSMENT ORDER. THE ASSESSEE DULY PRODUCED THE PURCHASE BILLS, COPIES OF THE DELIVERY CHALLANS, VOUCHERS OF FREIGHT INSURED CHARGES AN D ALSO THE EXTRACT OF GOODS INWARD REGISTER ALONG WITH THE EVIDENCE OF PAYMENT MADE THROUGH CHEQUE AND THE V A T REGISTRATION DETAILS OF THE SUPPLIERS. THE TOTALITY OF FACTS CLEARLY INDICATES THAT THE PRESUMPTION CA NNOT TAKE THE SHAPE OF EVIDENCE, HOWEVER, STRONG IT MAY BE UNLESS AND UNTIL IT IS CORROBORATED WITH MATERIAL EVIDENCE. THEREFORE, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COMMISSIONER OF INCOME TAX BIPIN NANUBHAI PANCHAL ITA NO S . 5672 /MUM/2014 5 (APPEALS) . IT IS AFFIRMED , RESULTING INTO DISMISSAL OF APPEAL OF THE REVENUE. FIN ALLY, THE APPEAL OF THE REVENUE IS DISMISSED. T HIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FRO M BOTH SIDES AT T H E CONCLUSION OF THE HEARING ON 0 1 /11 /2016 . S D/ - SD/ - ( RAMIT KOCHAR ) (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 02 / 1 1 /201 6 VR/ - . . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A) - , MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBA I,