ACIT, Chandigarh V. M/s Samrat Plywood Ltd., Chandigarh

ITA 595/CHANDI/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9207 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 05-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Unexplained expenditure
• Section: 69C; 147

Judgement Text

ITA NO. 595-C-17 M/S SAMRAT PLYWOOD LTD., CHANDIGARH 2 2. THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITIO N OF RS. 2,23,77,935/- ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69C OF THE INCOME TAX ACT,1961. 3. IT IS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE CANCELLED AND THAT OF THE ASSESSING OFFICER MAY BE RESTORED. 3. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT THE ASSE SSEES CASE WAS REOPENED U/S 147 ON THE BASIS OF INFORMATION RE CEIVED FROM DDIT (INVESTIGATION), CHANDIGARH REGARDING THE ASSESSEE HAVING MADE BOGUS PURCHASE OF RS. 2,23,70,935/- FROM M/S DURALLOY CU TTERS LTD, WHOSE CREDENTIALS WERE NOT ESTABLISHED AND, THEREFORE, T HE ENTIRE PURCHASE WAS CONSIDERED AS BOGUS BY THE ASSESSING OFFICER. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE A REFERENCE U/S 131(L)(D) OF THE ACT TO ACIT-LTU-2, MUMBAI TO MAKE FURTHER ENQUIRIES INTO THE CASE. THE OFFICER AT MUMBAI SUMMONED DIREC TOR OF DURALLOY CUTTERS LTD. AND RECORDED HIS STATEMENT. AT THE TIM E OF RECORDING OF THE STATEMENT, THE DIRECTOR STATED THAT NO STOCK REGIST ER WAS BEING MAINTAINED BY THE COMPANY AND THAT THEY WERE NOT EV EN LENDING THE GOODS AT THEIR PREMISES, RATHER, THE GOODS WERE DI RECTLY BEING TRANSPORTED FROM THE GODOWN OF THE SELLER TO THE PR EMISES OF THE ASSESSEE. FURTHER, IT WAS MENTIONED IN THE ORDER TH AT M/S DURALLOY CUTTERS LTD WAS PLACED IN THE LIST OF HAWALA PARTIE S BY THE MAHARASHTRA SALES DEPARTMENT. THE ACIT-LTU-2, MUMBAI ALSO CONDU CTED ENQUIRIES FROM THE PREMISES OF M/S DURALLOY CUTTERS LTD AND F OUND THAT NO BOOKS OF ACCOUNTS WERE MAINTAINED AT THE PREMISES. NO BO OKS OF ACCOUNTS ITA NO. 595-C-17 M/S SAMRAT PLYWOOD LTD., CHANDIGARH 4 THIS IS NOT POSSIBLE AS THERE CANNOT BE A SALE WITH OUT PURCHASE. THEREFORE, THE ARGUMENTS OF THE ASSESSING OFFICER ARE NOT ACCEPTABLE. A CLEAR CUT CASE OF BOG US PURCHASE IS NOT MADE OUT IN THE INVESTIGATION. THE ASSESSING OFFICER CANNOT ACCEPT THE SALE OF GOODS A ND DELETE THE ENTIRE PURCHASES. THEREFORE, THE ADDITIO N IS DELETED AND GROUNDS OF APPEALS NOS. 5 TO 10 ARE ALLOWED. 6. NOW, THE REVENUE HAS COME IN APPEAL CONTESTING T HE ACTION OF THE CIT(A) IN DELETING THE ADDITIONS MADE BY THE ASSESS ING OFFICER ON ACCOUNT OF ALLEGED BOGUS PURCHASES. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS. THE L D. COUNSEL FOR THE ASSESSEE WHILE RELYING UPON THE IMPUGNED ORDER OF T HE CIT(A) HAS SUBMITTED THAT ALL THE PAYMENT WERE MADE THROUGH BA NKING CHANNELS. THOUGH, THE ASSESSING OFFICER HAS MADE THE ADDITION S ON ACCOUNT OF BOGUS PURCHASES, HOWEVER, THE CORRESPONDING SALES H AVE BEEN ADMITTED BY THE ASSESSING OFFICER. THE LD. COUNSEL FOR THE A SSESSEE HAS ALSO RELIED UPON A CHART TO SHOW THAT THE DETAIL OF THE GOODS PURCHASED TALLIED WITH THE GOODS SOLD. EVEN THE BANK ACCOUNT OF THE A SSESSEE THROUGH WHICH THE PAYMENTS WERE MADE TALLIED WITH THE NAME OF THE CONCERNED PARTIES. THE ORIGINAL BILLS WERE ALSO SUBMITTED BEF ORE THE LOWER AUTHORITIES. THE BOOKS OF ACCOUNT HAVE NOT BEEN REJ ECTED. THE ALLEGED STATEMENT OF THE DIRECTOR OF M/S DURALLOY CUTTERS L TD WAS RECORDED AT MUMBAI AND THE ASSESSEE HAS NOT BEEN GIVEN ANY OPPO RTUNITY TO CROSS EXAMINE HIM. THE LD. CIT(A) AFTER CONSIDERING THE OVERALL FACTS AND CIRCUMSTANCES HAS HELD THAT IN THIS CASE THE ASSESS ING OFFICER HAS FAILED