DY CIT CIRCLE- 12(1)(1), MUMBAI V. M/S ASPEE AGRO EQUIPMENT PVT LTD, MUMBAI

ITA 589/MUM/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4505 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-10-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 24-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BRAJENDRA KUMAR LD
• Assessee Lawyers: B P PUROHIT LD
• Keywords: Bogus purchase; Rejection of books of accounts; Principle of natural justice; Tax effect; Set aside
• Section: 143(3); 133(6); 13

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI , , BEFORE HONBLE SHRI C.N. PRASAD , JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) 1. ./ I.T.A. NO. 589 /MUM/2020 ( / ASSESSMENT YEAR: 2011 - 12 ) DCIT CIRCLE - 12(1 ) (1) R. NO. 128C, 1 ST FLOOR AAYKAR BHAVAN, CHURCHGATE MUMBAI - 400 020 / VS. M /S ASPEE AGRO EQUIPMENT PVT. LTD. ASPEE HOUSE, B. J. PATEL ROAD, MALAD(W), MUMBAI - 400 064 ./ ./ PAN/GIR NO. AA ACA - 8980 - G ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI BRAJENDRA KUMAR - LD. SR. DR / RESPONDENT BY : SHRI B. P. PUROHIT - LD. AR / DATE OF HEARING : 23 /09/2021 / DATE OF PRONOUNCEMENT : 01/10/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSM ENT YEAR (AY) 20 11 - 12 ARISES OUT OF THE ORDER OF LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 20 , MUMBAI [CIT(A)], DATED 10/10 / 20 19 IN THE MATTER OF ASSESSMENT FRAMED BY LD. ASSESSING OFFICER (AO) U/S 143(3) ON 13/03/2014 . THE GROUND RAISED BY THE REVENUE READ AS UNDER : - I) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES AND LAW, THE LD.CIT(A) ERRED IN DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASES OF RS.1,52,19,619/ - MADE BY THE AO WITHOUT APPRECIATING THE FACT THAT ASSESSEE FAILED TO ESTABLISH THE GENUINENE SS OF THE PURCHASES. 2 I I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE HON'BLE ITAT IS REQUESTED TO ENTERTAIN THIS APPEAL THOUGH THE TAX EFFECT IS BELOW THE MONETARY LIMIT PRESCRIBED IN THE CBDT IN STRUCTION NO. 17 OF 2019 DATED 08.0 8.2019 AND EARLIER INST RUCTION NO. 3/2018 DATED 11.0 7.201 8 AS AMENDED ON 20.0 8.2018 AND INSTRUCTION NO. 23/2019 DATED 0 6.09.2019 AS THE CASE FALLS IN THE EXCEPTION PROVIDED IN PARA 10(E) OF THE SAID INSTRUCTION IN AS MUCH AS THE ADDITION IS BASED ON INFORMA TION RECEIVED FROM EXT ERNAL SOU RCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES, NAMELY , SALES TAX AUTHORITIES . II I) THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. AS EVIDENT THE REVENUE IS AG GRIEVED BY RELIEF PROVIDED BY LD. CIT(A) ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 2 . HAVING HEARD RIVAL SUBMISSIONS AND AFTER CAREFUL CONSIDERATION OF MATERIAL ON RECORD, OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAG RAPHS. A SSESSMENT PROCEEDINGS 3 . THE M ATERIAL FACTS ARE THA T ASSESSEE BEING RESIDENT CORPORATE ASSESSEE IS STATED TO BE ENGAGED AS MANUFACTURER AND SELLER OF EQUIPMENTS. DURING SCRUTINY P ROCEEDINGS, PURSUANT TO RECEIPT OF CERTAIN INFORMATION FROM SALES TAX DEPARTMENT , MAHARASHTRA, IT TRANSPIRED THAT THE ASSESSEE MADE SUSPICIOUS PURCHASES OF RS.152.19 LACS FROM A TAINTED SUPPLIER NAMELY M/S A TLAS ENTERPRISES. IN RESPONSE TO SHOW - CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT THE PURCHASES WERE GENUINE AND SUPPORT ED BY PURCHASE BILLS, DELIVERY RECEIPTS ETC. THE PURCHASED GOODS WITH R ECORDED IN STOCK REGISTER AND THE PAYMENT TO THE SUPPLIER WAS THROUGH BANKING CHANNEL. HOWEVER, NOTICE ISSUED U/S 133(6) WAS RETURNED BACK UN - SERVED AND ACCORDINGLY, THE PURCHASES WERE DISALLOWED. 4. UPON FURTHER APPEAL, LD. CIT(A) OBSERVED THAT THERE WAS A CLEAR AUDIT TRAIL OF PURCHASED GOODS WHICH INCLUDE PLACING OF THE ORDER, RECEIPT 3 OF GOODS AND RAISING OF INVOICES ETC. THE PAYMENTS WERE THROUGH BANKING CHANNELS. FURTHER AS PER THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN CHIRANJI LAL STEEL ROLLING MILLS V/S CIT (84 ITR 222), ENTRIES OF SALES TAX DEPARTMENT W OULD NOT BE ADMISSIBLE EVIDENCE. THE INFORMATION RECEIVED DID NOT PERTAIN TO THE ASSESSEE SPECIFICALLY AND MERE INFO RMATION ABOUT THE ISSUE OF ACCOMMODATION BILLS COULD NOT CONSTITUTE ADMISSIBLE EVIDENCE. FURTHER, THE INFORMATION RECEIVED FROM SALES TAX DEPARTMENT WAS NOT MADE AVAILABLE TO THE ASSESSEE. THE LD. AO COULD NOT POINT OUT ANY OMISSION ON THE PART OF THE ASSE SSEE BARRING THE ALLEGED OMISSION TO PRODUCE THE PARTY. LASTLY, SIMILAR ADDITION MADE IN AY 2012 - 13 ON IDENTICAL FACTS WERE DELETED BY PREDECESSOR CIT(A) AND THAT ORDER WAS CONFIRMED BY THE TRIBUNAL IN ITA NO.4065/MUM/2014 ORDER DATED 01/01/2016. THEREFORE , THE IMPUGNED ADDITIONS WERE DELETED. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 5. UPON CAREFUL CONSIDERATION OF FACTUAL MATRIX, WE FIND THAT SIMILAR ADDITION MADE IN AY 2012 - 13 WERE DELETED ON SAME REASONING BY LD. CIT(A) AND THAT ORDER WAS CHALLENGED BY THE REVENUE BEFORE THIS TRIBUNAL VIDE ITA NO.4065/MUM/2014 ORDER DATED 01/01/2016 WHEREIN THE BENCH DISMISSED THE APPEAL BY OBSERVING AS UNDER: - 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US. WE FIND THAT THE AO RECEIVED CERTAIN PIECES OF INFORMATION FROM THE STD, THAT AS PER THE INFORMATION JE WAS SUPPLYING BOGUS BILLS, THAT THE AO DID NOT SUPPLY THE COPY OF THE STATEMENT OF JE TO THE ASSESSEE AND NEITHER MADE HIM AVAILABLE FOR CROSS EXAMINATION, THAT THE ASSESSE E HAD FILED ALL THE DETAILS FROM PLACING OF ORDER TO THE RECEIPT OF FINAL BILLS BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS, THAT THE ASSESSEE HAD DISCHARGED THE ONUS CAST UPON IT, THAT AFTER THAT THE AO DID NOT MAKE ANY INQUIRIES, THAT THE ASSESSEE HA D NOT REJECTED THE BOOKS OF ACCOUNTS OF THE ASSESSEE ,THAT HE HAD ACCEPTED THE SALE MADE BY THE ASSESSEE. IN OUR OPINION THE AO HAD VIOLATED THE BASIC PRINCIPLES OF NATURAL JUSTICE AND THE FAA HAD RIGHTLY HELD THAT ADDITION MADE BY THE AO WOULD FALL IN THE CATEGORY OF ADDITION MADE BEHIND THE BACK OF THE ASSESSEE. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF NIKUNJ EXIMP ENTERPRISES LTD.(372 ITR 619) HAS HELD THAT IF THE AO ACCEPTS THE SALES AS GENUINE, 4 THERE CANNOT BE ANY JUSTIFICATION IN REJECTING THE PUR CHASES. INFORMATION RECEIVED FROM STD WAS A GOOD STARTING POINT FOR FURTHER INVESTIGATION. BUT, THE AO STOPPED AT THAT POINT ITSELF AND DID NOT BRING ON RECORD ANYTHING THAT COULD REBUT THE DOCUMENTARY EVIDENCE PRODUCED BY THE ASSESSEE. IN OUR OPINION, ADD ITION MADE BY THE AO WAS JUSTIFIABLY DELETED BY THE FAA. THEREFORE, CONFIRMING HIS ORDER, WE DECIDE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. FACTS BEING PARI - MATERIA THE SAME, TAKING THE SAME VIEW, WE DISMISS THE APPEAL OF THE REVENUE. 6. THE APPEAL STA NDS DISMISSED. ORDER PRONOUNCED ON 1 ST OCTOBER, 2021. SD/ - SD/ - ( C. N. PRASAD ) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 01/10/2021 SR.PS, DHANANJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE 5 / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.