TATA RICE MILLS, ZIRA V. INCOME TAX OFFICER WARD, ZIRA

ITA 61/ASR/2021

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7132 (ITAT-AMRITSAR)
• Duration Of Justice: 3 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 25-08-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Depreciation
• Section: 147; 148; 139; 133A; 250; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI MANISH BOARAD, ACCOUNTANT MEMBER) ITA. No: 61/Asr/2021 (Assessment Year: 2012-13) Tata Rice Mills, ,Talwandi Road Zira, Ferozpur 142047, Punjab PAN No. AACFT5433G V/S Income Tax Officer Ward, Zira (Appellant) (Respondent) Appellant by : Shri Y. K. Sud, C.A. Respondent by : Shri S. M. Surendranath, D. R. (आदेश आदेशआदेश आदेश)/ORDER Date of hearing : 01-12-2021 Date of Pronouncement : 02-12-2021 PER MAHAVIR PRASAD, J.M. 1. This appeal is filed by the assessee feeling aggrieved by the order of Ld. CI”T(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2012-13 order dated 30.06.2021 arising out of assessment order dated 25.12.2019 u/s. 250 of the Income Tax Act, 1961 (hereinafter referred as the ‘the Act’). 2. Assessee has taken following grounds of appeal: ITA No. 61/Ahd/2021 . A.Y. 2012-13 2 1. That the A.O. was not justified in initiating a proceeding u/s 147/148 of the Income Tax Act, 1961. 2. That there was no failure on the part of the assessee to disclose any material. Hence, reopening of the assessment after the expiry of four years is bad and against the provisions of law. 3. That the CIT(A) was not justified in sustaining the addition of Rs. 8,72,150/- made by the AO on account alleged bogus purchases made by the assessee. 4. That both CIT(A) & AO failed to appreciate that the assessee provided the complete evidence of purchases which was brushed aside by both the authorities. 5. That CIT(A) has wrongly sustained the addition of Rs. 2,58,160/- made by the A.O. on account of 5% G.P. on alleged unrecorded sales of Rs. 51,63,196/-. 6. That the CIT(A) while sustaining the addition completely ignored the facts and submissions made by the assessee in respect of alleged sales of Rs. 51,63,196/- alleged to be made by the assessee. 7. That without prejudice to the ground no. 5 & 6 even otherwise if the sales have been made out of books of accounts, net profit rate could have been charged instead of G.P. rate applied by the A.O. 8. That the orders of CIT(A) and AO are against the law and facts of the case. 3. Brief facts of the case are that the assessee is in the business of rice selling. As per the information received from the Investigation Wing of the department that assessee firm has made bogus purchases of paddy worth of Rs. 8,72,150/- from M/s. Kamna Overseas/Enterprises, Narela, Delhi. The Ld. A.O. also noticed that during the course of survey u/s. 133A of the Act carried out at the business premises of M/s. J.P Industries, Jallalabad West on 20.02.2014 in which certain books of accounts and other documents were found and impounded, out of the impounded documents, there were cash book and a ledger relating to the concern M/s. Surinder Sat Agro Foods, Jalalabad for the period of financial year 2011-12 and perusal of these books of accounts revealed the assessee has sold paddy worth of Rs. 51,63,196/- for which the assessee firm has received cash payments in lieu of that sales and those sales were recorded in the said books of accounts. ITA No. 61/Ahd/2021 . A.Y. 2012-13 3 4. On the basis of above said information, Ld. A.O. issued notice u/s. 148 after recording the reasons u/s. 147 of the Income Tax Act that the income amounting to Rs. 60,35,346/- has escaped income for the assessment year 2012-13. The assessee has challenged the issuance of notice u/s. 148 and contended that the said notice has been issued beyond the period of 4 years as contemplated in Section 147 as follows: “Section 147- If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recomputed the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hdereafter in this section and in sections 148 to 153 referrred to as the relevant assessment years). Provided that where as assessment under sub-section(3) of section 143 or this section has been made for the relevant assessment year, no action shal be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year :” 5. The assessee has taken first time legal ground before us and argued that without any material facts notice has been issued to the assessee . In this case, an information has been received from the Investigation Wing of the department that certain income has been escaped which had not been disclosed by the assessee and Ld. A.O. after recording the satisfaction issued notice to the assessee. Therefore, we hold that the notice was issued by the Ld. A.O. with the conformity of legal provisions of the Act. Thus, this ground of appeal is dismissed. 6. Now we come to the merit of the case. ITA No. 61/Ahd/2021 . A.Y. 2012-13 4 7. As per the information, assessee firm had made bogus purchases worth Rs. 8,72,160/- from M/s. Kamna Overseas/Enterprises. In order to verify the genuineness of the same, assessee was issued notices. However no reply was filed. Further It was also noted that during the course of survey u/s. 133A of the Act carried out at the business premises of M/s J.P. Industries, Jallalabad West on 20.02.2014 and several documents were impounded. And also cash books and a ledger relating to the concern M/s. Surinder Sat Agro Foods, Jallalabad for the period of 2011-12 were also seized. From the perusal of the same, it was revealed that the assessee had sold paddy worth Rs. 51,63,196/- for which the assessee firm had made cash payment in lieu of that sales. And also notice was issued for escapement of income of Rs. 60,35,346/- and assessee was asked to file evidence in respect of bogus purchase of Rs. 8,72,160/- from M/s. Kamna Overseas/Enterprises and also to give evidence in respect of transaction made by the assessee with M/s. Kamna Overseas/Enterprises 8. In support of its contention, assessee filed certain details such as Bill No. 1510 dated 06.07.2011 of Kamna Overseas in respect of 290.75 quintal rice purchased and Consignment documents, G.R. No. 9294 dated 06.07.2011 issued by Libra Roadways and also filed the transportation details and being trader receipt when truck entered Punjab through Khnori Border on 07.07.2011and also filed VAT Certificate No.0928210 issued by the Excise and Taxation Department, Punjab delivered to the truck Driver and a permission/declaration for the entry in Punjab and the rice was delivered to the assessee. 9. Apart from that Bll No. 1511 dated 06.07.2011 along with above said annexures were filed before the lower authorities bank payments details were falso filed by the assessee. In our considered opinion that assessee has discharged its onus merely on the information received from the Investigation Wing, addition cannot be made as assessee has filed all the relevant details which proved case of the assessee beyond any ITA No. 61/Ahd/2021 . A.Y. 2012-13 5 reasonable doubt that assessee has purchased the paddy after completing the formality and making the payment through banking channel and all relevant details were filed before the lower authorities. However, no unaccounted purchase has been made by the assessee. 10. In the result, we allow this ground of the assessee. 11. Now we come to ground no. 2 relating addition of Rs. 2,58,160/- on the basis of trade GP @ of 5% in which it is alleged by the lower authorities that assessee has sold paddy worth Rs. 51,63,196/- to M/s. Surinder Sat Agro Foods, Jalalabad for which the assessee firm had received cash payment in lieu of that sales. 12. But On the other hand, assessee denied any transaction took place between the Surinder Sat Agro Foods and it is pertinent to mention here that M/s. Surinder Sat Agro Foods, Jalalabad also filed an affidavit with the lower authorities in which it was mentioned that it had not carried out any business transaction with the said firm. Ld. A.O. also mentioned in his order that assessee has made unaccounted sales to PUNSUP or any other Agency. 13. In support of its contention, Ld. A.R. filed an application under Rule 46A along with a certificate issued by the Punjab State Civil Supplies Corporation Ltd. dated 09.09.2021 wherein it is mentioned that as per record of this office rice mill named M/s. Tata Rice Mills, Zira was allotted to PUNSUP for custom milling during Crop year 2008-09 to 2020-21 and nothing is recoverable from said firm till date as per instruction/guidelines issued by Government and directions given by Honourable Courts. There is no dispute between PUNSUP and above said firm. The Ld. A.R. certified certificate true copy of the said letter, therefore we admit the same. Since no corroborated evidence has been cited against the assessee by the lower authorities and it was alleged by the Assessing Officer that unaccounted sales were made to PUNSUP Now certificate dated 09/09/2021has been issued by the District Manager ITA No. 61/Ahd/2021 . A.Y. 2012-13 6 PUNSUP, Ferozpur when both the parties are denying any transaction then how addition can be sustained. So in the absence of any concrete evidence against the assessee such addition cannot be sustained. Thus we allow this ground of appeal. 14. In the result, appeal filed by the Assessee is allowed on merit. Order pronounced in Open Court on 02- 12- 2021 Sd/- Sd/- (MANISH BORAD) (MAHAVIR PRASAD) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Dated 02/12/2021 Rajesh Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) – 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER Deputy/Asstt.Registrar ITAT,Amritsar