DCIT, New Delhi V. M/s. D.S. Alloyd Pvt. Ltd., New Delhi

ITA 5851/DEL/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3204 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 28-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 133(6); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDEN T & SHRI K. NARSIMHA CHARY, JUDICIAL MEMBER ITA NO.-5851/DEL/2015 ( ASSESSMENT YEAR: 2010-11) DCIT CIRCLE 7(1), NEW DELHI. VS D.S. ALLOYD PVT. LTD. (FORMERLY D.S. ALLOYS PVT. LTD.) AN-2, SHALIMAR BAGH, NEW DELHI. AABCD5152G ASSESSEE BY SH. SANJAY KUMAR, CA REVENUE BY SH. AMIT JAIN, SR. DR ORDER PER SHRI K.N. CHARY, J.M. AGGRIEVED BY THE ORDER DATED 20.08.2015 IN APPEAL NO. 92/2014-15 RELEVANT TO THE ASSESSMENT YEAR 2010-11 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-3, NEW DELHI (HEREINAFTER FOR SHORT REFERRED TO AS THE LD. CIT( A)), REVENUE IS IN THIS APPEAL ON THE FOLLOWING GROUNDS: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, LD.CIT (A) HAS ERRED IN DELETING THE DISALLOWA NCE OF RS. 37,75,281/- MADE BY THE AO. DATE OF HEARING 13.11.2017 DATE OF PRONOUNCEMENT 14.11.2017 2 ITA NO. 5851/DEL/2015 2. THE APPELLANT CRAVES TO LEAVE, TO ADD, ALTER OR AME ND ANY GROUND OF APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADIN G OF FERRO ALLOYS & FERROUS AND NON-FERROUS METAL. FOR THE AY 2010-11 THEY HAVE FILED THEIR RETURN OF INCOME ON 22.09.201 0 DECLARING A TOTAL INCOME OF RS. 49,53,560/-. ON THE INFORMATIO N RECEIVED FROM THE DIRECTOR OF INCOME TAX INVESTIGATION-1 DELHI MA HARASHTRA VAT DEPARTMENT FOUND THAT THE TRANSACTIONS WORTH RS. 37 ,75,281/- OF THE ASSESSEE WERE BOGUS. ON THAT AO RECORDED REASO NS TO BELIEVE THAT THE INCOME ESCAPED ASSESSMENT AND OPENED ASSES SMENT U/S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT CALLED A S THE ACT). AO SOUGHT INFORMATION U/S 133(6) FROM M/S SAINESH TRAD ERS AND RECEIVED REPLY ON 13.03.2014. HOWEVER, STATING THA T THE SAID M/S SAINESH TRADERS DID NOT PROVIDE AUDITED BALANCE SHE ET, PROFIT AND LOSS ACCOUNT AND BANK ACCOUNT, AO TREATED THE TRANS ACTION AS BOGUS ONE AND ADDED A SUM OF RS. 37,75,281/-. 3. DURING THE APPEAL, LD. CIT (A) FOUND THAT WHEN T HE AO SOUGHT THE INFORMATION U/S 133(6) OF THE ACT FROM M /S SAINESH 3 ITA NO. 5851/DEL/2015 TRADERS, MUMBAI, VIDE LETTER DATED 13.03.2014 THE S AID TRADERS SENT THE REQUISITE INFORMATION CONTAINING THE DATE- WISE DETAILS OF THE SALE OF MANGANESE DIOXIDE ORE WITH THE QUANTITA TIVE DETAILS OF 98.947 MT AND THE LEDGER ACCOUNT OF THE ASSESSEE FO R THE PERIOD BETWEEN 01.04.2009 AND 31.03.2010 SHOW THE DEBIT BA LANCE OF RS. 12,25,281/- WHICH WAS RECEIVED BY M/S SAINESH TRADE RS THROUGH RTGS ON 10.05.2010. FURTHER, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FILED THE COPY OF THE CLO SING STOCK BOOK MAINTAINED ON DAY-TO-DAY BASIS AND THE QUANTITY OF MANGANESE DIOXIDE ORE PURCHASED THROUGH M/S SAINESH TRADERS, MUMBAI IS ENTERED IN THE BOOKS OF ACCOUNTS WITH CLOSING STOCK OF 839200 KGS AS ON 31.03.2010 MATCHING WITH THE FIGURES SHOWN IN THE AUDITED ACCOUNTS. ON VERIFICATION OF THESE FACTS FROM THE RECORD, LD. CIT (A) OBSERVED THAT THE AO HAS NOT ELABORATED ANY REA SON FOR MAKING THE ADDITION OF RS. 37,75,281/-, AS SUCH, LD. CIT ( A) DELETED THE SAME. REVENUE, IS THEREFORE, BEFORE US IN THIS APP EAL. 4. LD. DR VEHEMENTLY RELYING UPON THE ORDERS OF THE AO SUBMITTED THAT INASMUCH AS M/S SAINESH TRADERS DID NOT PROVIDE AUDITED BALANCE SHEET, PROFIT AND LOSS ACCOUNT FOR THE F.Y. 2009- 4 ITA NO. 5851/DEL/2015 10 AND THE COPY OF THE BANK ACCOUNT THERE IS NO PRO PER EVIDENCE ESTABLISHING THE GENUINENESS OF THE TRANSACTIONS, A S SUCH, THE ADDITION MADE BY THE AO WAS PROPER. PER CONTRA, LD . AR SUBMITTED THAT THE PURCHASES MADE FROM M/S SAINESH TRADERS WERE SUPPORTED BY VOUCHERS AND BILLS, CONTAINING AL L THE DETAILS AND ARE ENTERED INTO THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE AND AT NO POINT OF TIME ANY DEFECT WAS FOUND IN THE FINANCIALS AND STOCK RECORDS PRODUCED, AND THE BANK CERTIFICATE SH OWING THE PAYMENTS MADE BY RTGS WERE ALSO PRODUCED, AS SUCH, THE FACTUAL FINDINGS RECORDED BY THE LD. CIT (A) CANNOT BE DIST URBED. 5. WE HAVE CAREFULLY GONE THROUGH THE RECORD. AO D OES NOT DISPUTE THE CORRECTNESS OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE NOR DOES HE RECORD ANY FINDING AS TO ANY DEFECT IN THE FINANCIALS AND STOCK RECORDS PRODUCED BEFORE HIM EVIDENCING TH E PURCHASES MADE FROM M/S SAINESH TRADERS. THERE IS NOTHING CO NTRARY ON RECORD TO REBUT THE STATEMENT OF THE ASSESSEE THAT ALL THE PURCHASES ARE SUPPORTED BY BILLS AND VOUCHERS CONTA INING ALL THE NECESSARY DETAILS LIKE NAME, ADDRESS, VAT/SALES TAX NO. ETC. THERE IS ALSO NO DISPUTE THAT THE PAYMENTS WERE MAD E TO M/S 5 ITA NO. 5851/DEL/2015 SAINESH TRADERS BY RTGS DIRECTLY TO THEIR BANK ACCO UNT. IN THE CIRCUMSTANCES, AS A MATTER OF FACT, LD. CIT (A) FOU ND THAT THE PURCHASES AND THE CLOSING STOCK AS ON 31.03.2010 WE RE MATCHING WITH THE FIGURES SHOWN IN THE AUDITED ACCOUNTS. WE , THEREFORE, CONCUR WITH THE FINDING OF THE LD. CIT (A) THAT WIT HOUT ASSIGNING ANY ELABORATE REASONS AS TO WHY AO HAS NOT ACCEPTED THE EVIDENCE IN THE SHAPE OF BOOKS OF ACCOUNTS AND OTHER MATERIA L PRODUCED BEFORE HIM, THE AO CANNOT MAKE AN ADDITION ARBITRAR ILY MERELY BECAUSE M/S SAINESH TRADERS DID NOT PRODUCE THEIR B ALANCE SHEET, PROFIT AND LOSS ACCOUNT AND BANK ACCOUNTS. WE, THE REFORE, UPHOLD THE FINDING OF THE LD. CIT (A) AND DISMISSED THE GR OUNDS OF APPEAL. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 14.11.2017 SD/- SD/- (G.D. AGRAWAL) (K. NARSIMHA C HARY) PRESIDENT JUDICIAL ME MBER DATED: 14.11.2017 *KAVITA ARORA 6 ITA NO. 5851/DEL/2015 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI