DCIT, CIRCLE- 1(2), NEW DELHI V. ADVENTURE RESORTS AND CRUISES PVT. LTD., NEW DELHI

ITA 5877/DEL/2017

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3207 (ITAT-DELHI)
• Duration Of Justice: 6 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2024
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 04-02-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 13-09-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus purchase; Set aside
• Section: 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A : NEW DELHI BEFORE SHRI G.S. PANNU, HON’BLE VICE PRESIDENT AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.5877/Del/2017 Assessment Year: 2014-15 DCIT, Circle-1(2), New Delhi. Vs Adventure Resorts and Cruises Pvt. Ltd., 611, Surya Kiran Building, KG Marg, Connaught Place, New Delhi – 110 001. PAN: AAACF6111G CO No.198/Del/2022 (ITA No.5877/Del/2017) Assessment Year: 2014-15 Adventure Resorts and Cruises Pvt. Ltd., 611, Surya Kiran Building, KG Marg, Connaught Place, New Delhi – 110 001. PAN: AAACF6111G Vs. DCIT, Circle-1(2), New Delhi. (Appellant) (Respondent) Assessee by : None Revenue by : Shri Kanav Bali, Sr. DR Date of Hearing : 05.02.2024 Date of Pronouncement : 29.02.2024 ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the Revenue against the order dated 12.07.2017 of the Commissioner of Income Tax (Appeals)-I, New Delhi ITA No.5877/Del/2017 CO No.198/Del/2022 2 (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in appeal No.442/16-17 arising out of the appeal before it against the order dated 13.12.2016 passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as ‘the Act’) by the DCIT, Circle 1(2), New Delhi (hereinafter referred to as the Ld. AO). The assessee has also filed cross objection. 2. Heard and perused the record. At the time of hearing, none appeared for the assessee. The record shows that on the last date of hearing, the matter was adjourned for today at the request of the ld. AR. No notice is justified. 3. The Revenue is in appeal challenging the deletion of the addition of Rs.3,82,66,575/- made by the ld. AO on account of disallowance of purchases of textiles treating the same as bogus purchases. 4. During the hearing, the ld. DR, has supported the order of the ld. AO and submitted that the ld.CIT(A) has not taken into consideration the fact of local inquiry conducted by the ld. AO with regard to the existence and genuineness of the firms from which allegedly the purchases were made. 5. On appreciating the matter on record, it comes up that the assessee is shown to be running business of owning cruise ship and is engaged in the business of running the same and earns income from tourism from the cruise conducted in the Brahmaputra river. The AO had questioned the break-up of ITA No.5877/Del/2017 CO No.198/Del/2022 3 trade payable and found that the alleged purchases made from two parties were doubtful. The notices u/s 133(6) of the Act were received back with the report ‘no such person in existence at the given address.’ The ld. AO also found certain ambiguities and discrepancies in the invoices and, thus, concluded that it was a case of fake purchases. The ld.CIT(A), however, has taken into consideration the fact of payment being made by account payee cheque during the relevant financial year and further in financial year 2014-15. The ld.CIT(A) has also considered the fact that the purchases are disallowed and corresponding sales has not been considered to be bogus. 6. We are of the considered view that when the genuineness of a transaction was examined by the ld. AO on the basis of the factual inquiry about the non- existence of the firms for which the assessee was given an opportunity to establish the genuineness of the transaction and no evidences were filed to establish the genuineness of the transaction. Thus by merely drawing presumption on the basis of mode of payment or irregularity in accepting the sales while rejecting the purchases, the ld.CIT(A) has fallen in error to set aside the addition. The assessee was specifically asked to produce supporting evidences like proof of transportation/freight charges paid for transporting the garments purchased, name and addresses of the godown where traded commodities were stored, proof of rent of the godown used and other related details as mentioned in para 4.8 of the assessment order, but, the assessee has ITA No.5877/Del/2017 CO No.198/Del/2022 4 not provided any such evidences. The circumstances as discussed by the ld. AO were not duly explained to ld.CIT(A) even with any substantive piece of evidence. Thus, the order of the ld.CIT(A) cannot be sustained. The ground raised is allowed. The appeal of the Revenue is allowed and the impugned order of the ld. CIT(A) is quashed and that of the ld. AO is restored. 7. Further in the absence any material facts to support the grounds in Cross Objections the same are also dismissed. Order pronounced in the open court on 29.02.2024. Sd/- Sd/- (G.S. PANNU) (ANUBHAV SHARMA) VICE PRESIDENT JUDICIAL MEMBER Dated:29 th February, 2024. dk Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi