ITO, WD-2(3), KOLKATA, Kolkata V. M/s Globsyn Technologies Ltd., Kolkata

ITA 614/KOL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5289 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 06-04-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C J SINGH
• Assessee Lawyers: MANISH TIWARI
• Keywords: Bogus purchase; Assessment record
• Section: 131; 68

Judgement Text

I.T.A NO.614/KOL/2016 M/S. GLOBSYN TECHNOLOGIES LTD. PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOLKATA BEFORE: SHRI P. M. JAGTAP, VICE PRESIDENT AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A NO.614/KOL/2016 (ASSESSMENT YEAR: 2002-03) ITO, WARD-2(3), KOLKATA APPELLANT VS M/S. GLOBSYN TECHNOLOGIES LTD. RESPONDENT [PAN:AAACG3401C] FOR THE APPELLANT : SHRI C.J. SINGH, JCIT, SR. DR FOR THE RESPONDENT : SHRI MANISH TIWARI, FCA, AR DATE OF HEARING : 18.03.2019 DATE OF PRONOUNCEMENT : 29.05.2019 ORDER SHRI S.S. VISWANETHRA RAVI, JM: THIS APPEAL BY THE REVENUE AGAINST THE ORDER DATED 12.01.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-23, KOLKATA [CIT(A)] FOR ASSESSMENT YEAR 2002-03. 2. GROUND NO.1 RAISED BY THE REVENUE IS RELATING TO DELETION OF ADDITION MADE ON ACCOUNT OF BOGUS ENTRY IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. HEARD BOTH PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM ASSESSMENT RECORD THAT THERE WAS A SURVEY OPERATION BY THE INVESTIGATION WING AT THE BUSINESS PREMISES OF SHRI I.T.A NO.614/KOL/2016 M/S. GLOBSYN TECHNOLOGIES LTD. PAGE | 2 SANJAY RASTOGI, IN DELHI. THE SAID PERSON ADMITTED THAT HE GAVE BOGUS ENTRIES TO SOME OF THE COMPANIES THROUGH NUMBER OF COMPANIES INCLUDING THE ASSESSEE REGISTERED AT HIS ADDRESS BY HIS STATEMENT U/S 131 OF THE ACT. THE CONTENTION OF THE ASSESSING OFFICER BASING ON THIS STATEMENT, THE ASSESSEE RECEIVED BOGUS ENTRIES OF RS.14,70,000/- VIDE INSTRUMENT NO.0053416 DATED 25.01.02 FROM M/S ADHUNIK SYSTEMS PVT. LTD. CONSIDERING THE TRANSACTIONS OF M/S ADHUNIK SYSTEMS PVT. LTD., THE ASSESSING OFFICER ADDED THE SAID AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE. 4. BEFORE THE CIT(A), THE CONTENTION WAS RAISED BY THE ASSESSEE WAS THAT MAKING AN ADDITION WITHOUT HAVING PLACED ON RECORD, THE RELEVANT EVIDENCE SHOWING THAT THE ASSESSEE RECEIVED THE SAID ENTRY, IS BAD IN LAW. IT IS NOTED THAT THE ASSESSEE SUBMITTED ITS WRITTEN SUBMISSIONS BEFORE THE CIT(A) SUPPORTING THE CONTENTION RAISED BEFORE HIM. THE CIT(A) CONSIDERING THE SAID SUBMISSIONS ALONG WITH THE RECORDS DELETED THE IMPUGNED ADDITION MADE BY THE ASSESSING OFFICER FOR THE REASONS STATED HEREUNDER: 4. IN SUMMARY, THE ARGUMENTS OF THE LD A.R ARE THAT FIRSTLY, AS THE APPELLANT HAS DENIED ANY TRANSACTIONS WITH THE SAID PARTY THE ADDITION IS NOT SUSTAINABLE IN LAW IN THE ABSENCE OF ANY DISCUSSION ON THIS POINT. IT HAS ALSO BEEN ARGUED, SECONDLY THAT THE HAS NOT ESTABLISHED THE RECEIPT OF INSTRUMENT NO.0053416 DATED 25.01.2002 BY THE APPELLANT WITH ANY RELEVANT FACTS AND FIGURES. IT HAS ALSO BEEN ARGUED BY THE LD. A.R THAT THIRDLY, THE AO CONDUCTED NO INQUIRIES TO ESTABLISH THE RECEIPT OF THE IMPUGNED INSTRUMENT DATED 25.02.2002 FROM ANALYSIS OF BANK A/C OF THE APPELLANT. 5. I HAVE EXAMINED THE ISSUE AND FIND THAT THE AO HAS RECORDED THE FINDINGS BEFORE HIS COLLEAGUE ASSESSING OFFICER IN CONSIDERABLE DETAIL. HOWEVER NOTHING HAS BEEN SAID BY THE AO ABOUT ANY CREDIT OF RS.14,70,000/- APPEARING IN THE BOOKS OF ACCOUNT OF THE ACCOUNT OF THE ASSESSEE-APPELLANT. I FIND THAT THE A.O HAS MADE THE ADDITION BASED SOLELY ON THE STATEMENT OF CONFESSION BY A THIRD PARTY BEFORE ANOTHER AO. THEREFORE I FIND MERIT IN THE CONTENTIONS OF THE LD A.R THAT ANY ADDITION MERELY BY REFERRING TO CONFESSIONAL STATEMENT OF A THIRD PARTY, WITHOUT ESTABLISHING ACTUAL RECEIPT IN THE HANDS OF THE ASSESSEE EITHER FROM ITS BOOKS OF ACCOUNT OR BANK ACCOUNT IS NOT VALID IN LAW. SECTION 68 OF INCOME TAX ACT, 1961 WHICH CONTAINS MAINLY A DEEMING PROVISION CANNOT HAVE ANY APPLICATION UNLESS IT IS ESTABLISHED THAT THERE WAS IN FACT A CREDIT OF RS.14,70,000/- IN ASSESSEE BOOKS OF I.T.A NO.614/KOL/2016 M/S. GLOBSYN TECHNOLOGIES LTD. PAGE | 3 ACCOUNT. IN VIEW OF THE FINDINGS ABOVE, AND THE LEGAL REQUIREMENTS, I FIND THAT THE ACTION OF THE AO ARE UNSUSTAINABLE IN LAW, AND DIRECT THAT THE SAME BE DELETED. 5. ON PERUSAL OF THE AFORESAID REASONS, WE FIND NO SUCH EVIDENCE BROUGHT ON RECORD BY THE REVENUE BEFORE US SHOWING THAT THE ASSESSEE RECEIVED SUCH ENTRY VIDE INSTRUMENT AS DISCUSSED ABOVE. IT IS ALSO NOTED THAT THE SAID ADDITION WAS MADE BY THE ASSESSING OFFICER ONLY ON THE STATEMENT OF SHRI SANJAY RASTOGI AND WITHOUT ESTABLISHING THE RECEIPT IN THE HANDS OF THE ASSESSEE EITHER FROM THE BOOKS OF ACCOUNT OR BANK ACCOUNT, THEREFORE, IN OUR OPINION THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT MAINTAINABLE UNLESS IT IS ESTABLISHED BY PLACING RELEVANT EVIDENCE ON RECORD. THUS WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) AND GROUND NO.1 RAISED BY THE REVENUE FAILS AND IT IS DISMISSED. 6. GROUND NO.2 IS RELATING TO DELETION OF ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUNT OF BOGUS PURCHASES IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. HEARD BOTH PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE CONTENTION OF THE LD. AR IS THAT NO EXPENDITURE WAS CLAIMED IN RESPECT OF ALLEGED BOGUS PURCHASES, NO EFFECT ON THE PROFIT AND LOSS A/C. FURTHER THE ASSESSEE IS READY TO COOPERATE WITH THE ASSESSING OFFICER BY PRODUCING ALL THE RECORDS SUPPORTING HIS CONTENTIONS. FOR THIS THE TRIBUNAL REMANDS THE MATTER TO THE FILE OF ASSESSING OFFICER FOR HIS FRESH CONSIDERATION FOR VERIFICATION WHETHER ANY SUCH EXPENDITURE RELATING TO ALLEGED BOGUS PURCHASES DEBITED OR NOT. THE LD. DR AGREED FOR THE SAME. TAKING INTO CONSIDERATION THE FACTS AND CIRCUMSTANCES AND SUBMISSIONS OF LD. AR & DR, WE DEEM IT PROPER TO REMAND THE MATTER TO THE FILE OF ASSESSING OFFICER FOR HIS I.T.A NO.614/KOL/2016 M/S. GLOBSYN TECHNOLOGIES LTD. PAGE | 4 FRESH VERIFICATION AS INDICATED ABOVE. THUS GROUND NO.2 RAISED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 29.05.2019. SD/- SD/- [P. M. JAGTAP] [S.S. VISWANETHRA RAVI] VICE PRESIDENT JUDICIAL MEMBER DATED : 29.05.2019 PLACE : KOLKATA RS, SR.PS COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT ITO, WARD-2(3), KOLKATA 2 RESPONDENT M/S. GLOBSYN TECHNOLOGIES LTD., XI-11 &12, BLOCK-EP, SECTOR-EP, SECTOR-V, SALT LAKE CITY, KOLKATA 700091. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA //TRUE COPY// BY ORDER, ASSISTANT REGISTRAR, ITAT, KOLKATA