Sh. Mohinder Kumar Khanna, New Delhi V. ACIT, New Delhi

ITA 6176/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6534 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 08-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 20-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Bogus purchase; Accommodation entries
• Section: 153A; 147

Judgement Text

1 ITA NO. 6176/DEL/2015 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: A SMC NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIA L MEMBER I.T.A .N O.-6176/DEL/2015 (ASSESSME NT YEAR-2006-07) MOHINDER KUMAR KHANNA PROP. M/S TOPCEE ENTERPRISES GALI NO. 7, ANAND PRABAT INDL. AREA, NEW DELHI AAIPK0795J (APPELLANT) VS ACIT CIRCLE 51(1), NEW DELHI (RESPONDENT) ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 21/4/2014 PASSED BY THE CIT (A)- 17, NEW DELHI. 2. THE GROUNDS OF APPEAL ARE FOLLOWS:- 1. THE LD. CIT (A) WAS NOT JUSTIFIED TO UPHOLD THE ADDITION OF RS.48, 847/- MADE TO THE INCOME OF THE APPELLANT ON ACCOUNT OF SO-CALLED BOGUS PURCHASES. THE ADDITION OF RS.48, 847/- IS UNFOUNDED AND UNCALLED FOR. APPELLANT BY SH. INDERJEET AHUJA, ADV RESPONDENT BY T. VASANTHAN, DR DATE OF HEARING 08.02.2016 DATE OF PRONOUNCEMENT 08.03.2016 2 ITA NO. 6176/DEL/2015 2. THE LD. CIT (A) ARBITRARILY RETAINED THE ADDITIO N TO THE EXTENT OF 20% OUT OF THE SO-CALLED BOGUS PURCHASES OF RS.2, 44,238/- TO THE INCOME OF THE APPELLANT. 3. THE LD. CIT (A) FAILED TO APPRECIATE THAT: (A) THE APPELLANT MADE PURCHASES OF ALUMINUM SCRAP FROM M/S VISHU TRADING CO. FOR A SUM OF RS.2,44,238 /-. THE PAYMENTS AGAINST THE SAID PURCHASES WERE MADE THROUGH A/C PAYEE CHEQUES. (B) THE CONFIRMATION LETTER FROM M/S VISHU TRADING CO. WAS FILED DURING THE ASSESSMENT PROCEEDINGS, WHEREI N THEY CONFIRMED THAT THE PURCHASES MADE BY THE APPEL LANT FROM THEM WERE GENUINE AND FOR WHICH SUFFICIENT EVI DENCE HAD BEEN ADDUCED. (C) THE SO-CALLED EVIDENCE ON THE BASIS OF WHICH T HE ADDITION WAS SUSTAINED BY THE LEARNED A.O WAS NOT SUFFICIENT TO JUSTIFY THE ADDITION. 4. THE VARIOUS REASONS GIVEN BY THE LD. CIT (A) TO RESTRICT THE ADDITION TO THE EXTENT OF 20% OF THE SO-CALLED BOGU S PURCHASES, ARE MISCONCEIVED AND INCORRECT. 5. THE APPELLATE ORDER IS CONTRARY TO THE FACTS AND LAW OF THE CASE. 3. THE ASSESSEE FILED RETURN DECLARING AN INCOME OF RS.2, 03,500/-. THE ASSESSMENT OF THE ASSESSEE FOR THE A SSESSMENT YEAR 2006-07 WAS RE-OPENED AS PER SECTION 147 OF INCOME- TAX ACT. AFTER PROPERLY RECORDING THE REASONS FOR FORMING THE BELI EF THAT THE INCOME WAS ESCAPED IN RESPECT OF EXAMING THE LIST O F ACCOMMODATION ENTRIES. IT IS NOTICED THAT THE FOLL OWING ACCOMMODATION ENTRIES HAVE BEEN TAKEN BY THE ASSESS EE NAMELY M/S TOPCEE ENTERPRISES:- 3 ITA NO. 6176/DEL/2015 ON EXAMINING THE LIST OF ACCOMMODATION ENTRIES PR OVIDED BY SHRI RAKESH GUPTA & SHRI VISHESH GUPTA AND SHRI NAV ENEET JAIN & SHRI VAIBHAV JAIN PERTAINING TO A.Y 2006-07, IT IS NOTICED THAT THE FOLLOWING ACCOMMODATION ENTRIES HAVE BEEN TAKEN BY THE NAMELY M/S TOPCEE ENTERPRISES: SL NO. ACCOMMODATION ENTRY PROVIDED BY NAME OF PARTY TO WHOM ACCOMMODATION ENTRY IS PROVIDED AMOUNT OF ACCOMMODATION ENTRY 1. VISHU TRADING CO. M/S TOPCEE ENTERPRISES. R S. 244238/- TOTAL AMOUNT OF ENTRIES RS. 244238/- 4. THE ASSESSING OFFICER HELD THAT PURCHASES OF RS. 2, 44,238/- SHOWN FROM M/S VISHU TRADING COMPANY IS BOGUS PURCH ASE OBTAINED BY THE ASSESSEE. THUS, ADDED THE SAID AMO UNT TO THE INCOME OF THE ASSESSEE BY THE ASSESSING OFFICER. 5. BEING AGGRIEVED BY THIS, THE ASSESSEE FILED APPE AL BEFORE THE CIT (A). THE CIT (A) HELD THAT 20% OF THE COST OF THE PURCHASES SHOWN FROM THE PARTIES WHO HAD GIVEN ACCOMMODATION ENTRIES HAD TO BE TREATED AS INFLATED/BOGUS PURCHASE. THEREFOR E, DIRECTED THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 20% O F THE BOGUS PURCHASES WHICH COMES TO AROUND 48,847/- AND THE BA LANCE AMOUNT WAS DELETED BY THE CIT (A). 6. THE LD. AR SUBMITTED THAT ALL THE PAYMENTS WERE MADE BY MODE OF CHEQUE. THE ENTRIES MADE IN THE M/S VISHU TRADING 4 ITA NO. 6176/DEL/2015 COMPANY CAN BE WRONG AND FOR THAT THE ASSESSEE SHOU LD NOT BE HELD RESPONSIBLE. THERE WAS NO MATERIAL ON RECORD THAT THE GOODS WERE NOT PURCHASED BY THE ASSESSEE THE CONFIRMATION WAS ALSO FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. 7. THE LD. DR SUBMITTED THAT THE CIT (A) HAS TAKEN INTO ACCOUNT THAT THE ASSESSEE HAS SHOWN PURCHASES OF RS.2,44,23 8/- FROM M/S VISHU TRADING COMPANY WHICH WAS THE PROPRIETOR CONC ERN OF SHRI RAKESH GUPTA, SHRI VISHESH GUPTA, SHRI NAVNEET JAIN AND SHRI VAIBHAV JAIN SINCE THE PERSONS CONCERNED WERE ENGAG ED IN GIVEN ACCOMMODATION ENTRIES. THEREFORE, THE PURCHASES SH OWN FROM THEM WERE NOT GENUINE. INFACT THESE VERY PEOPLE DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 153A OF INCOME-TAX ACT H AVE ADMITTED THAT THEY HAVE GIVEN ACCOMMODATION ENTRIES TO THE P ARTIES WHOSE LIST HAVE BEEN PROVIDED BY THEM TO THE ACIT. THUS, THE CIT (A) HAS RIGHTLY GIVEN THE EFFECT OF 20% OF THE COST OF THE PURCHASES SHOWN FROM THE PARTIES AND DIRECTED THE ASSESSING OFFICER ACCORDINGLY. 8. WE HAVE PERUSED ALL THE RECORDS AND HEARD BOTH T HE PARTIES. THE ACCOMMODATION ENTRIES WHICH WERE MADE WERE ADMI TTED BY THE ASSESSEE AND MERELY THE TRANSACTIONS CHEQUE DOES NO T AMOUNT TO THE PROPER MODE OF INCOME. INFACT THE CIT(A) HAS T AKEN THE COGNIZANCE OF THE SHORT-COMINGS OF THE ASSESSING OF FICER S ORDER AND RECTIFY IN HIS ORDER BY DIRECTING THE ASSESSING OFFICER TO RESTRICT THE ADDITION TO 20% OF THE BOGUS PURCHASES WHICH CO MES TO RS.48,847/-. THUS, THE CIT (A) HAS RIGHTLY GIVEN T HE FINDINGS. 5 ITA NO. 6176/DEL/2015 9. IN RESULT, THE APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 08TH OF MARCH, 2016. SD/- SD/- (S. V. MEHROTRA) (SUCHI TRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 08/03/2016 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 09.02.2016 PS 2. DRAFT PLACED BEFORE AUTHOR 10.02.2016 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .03.2016 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. .03.2016 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 08 .03.2016 PS/PS 6. KEPT FOR PRONOUNCEMENT ON .03.2016 PS 6 ITA NO. 6176/DEL/2015 7. FILE SENT TO THE BENCH CLERK 08. 03.2016 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.