M/s. Rolex Tin Works, Prop.of Shri Husainbhai M.Karwaniya, Baroda V. The Income tax Officer,Ward-5(4), Baroda

ITA 652/AHD/2009

• Counselvise Citation: 65220514 RSA 2009
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 30-04-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 27-02-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Keywords: Bogus purchase

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER I.T.A. NO.652, 653 / AHD/2009 (ASSESSMENT YEAR 2003-04, 2004-05) M/S. ROLEX TIN WORKS, PROP. OF SHRI HUSAINBHAI MOHMADBHAI KARWANIYA, NEAR P G TEXTILE MILL, YAKUTPURA, BAARODA VS. ITO, WARD 5(4), VADODARA PAN/GIR NO. : ADSPK 2695L (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI ANIL SHAH, AR RESPONDENT BY: SHRI B L YADAV, SR. DR DATE OF HEARING: 30.04.2012 DATE OF PRONOUNCEMENT: 30.04.2012 O R D E R PER SHRI A. K. GARODIA, AM:- BOTH THESE APPEALS ARE FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A) V, BARODA BOTH DATED 08.12.2008 FOR THE ASSESSMENT YEARS 2003-04 AND 200 4-05. FOR THE SAKE OF CONVENIENCE, BOTH THESE APPEALS WERE HEARD TOGET HER AND ARE BEING DISPOSED OFF BY WAY OF THIS COMMON ORDER. 2. IN BOTH THESE YEARS, TWO ISSUES ARE RAISED BY TH E ASSESSEE. ONE IS REGARDING REOPENING AS PER GROUNDS NO.1-4 AND THE O THER IS REGARDING MERIT OF THE ADDITION MADE BY THE A.O. AND PARTLY C ONFIRMED BY LD. CIT(A) AS PER GROUND NO.5 IN BOTH THE YEARS. LD. A .R. DID NOT PRESS THE I.T.A.NO. 652,653 /AHD/2009 2 FIRST ISSUE I.E. REGARDING VALIDITY OF REOPENING AS PER GROUNDS NO.1-4 IN BOTH THESE YEARS AND HENCE, THESE GROUNDS ARE REJEC TED AS NOT PRESSED IN BOTH THESE YEARS. 3. AS PER GROUND NO.5 ON MERIT, LD. CIT(A) HAS CONF IRMED THE ADDITION OF RS.1 LACS OUT OF TOTAL ADDITION MADE BY THE A.O. OF RS.4 LACS IN ASSESSMENT YEAR 2003-04 AND IN ASSESSMENT YEAR 2 004-05, CIT(A) HAS CONFIRMED ADDITION OF RS.1,12,768/- AS AGAINST THE TOTAL ADDITION MADE BY THE A.O. OF RS.4,51,070/-. IN BOTH THESE YEARS, LD . CIT(A) HAS CONFIRMED THE ADDITION TO THE EXTENT OF 25% OF THE TOTAL ALLE GED BOGUS PURCHASES BY THE ASSESSEE. NOW, THE ASSESSEE IS IN FURTHER APPE AL BEFORE US. 4. IT WAS SUBMITTED BY THE LD. A.R. THAT IN THE CAS E OF ITO VS SHRI SATYANARAYAN P RATHI IN I.T.A.NO. 3407/AHD/2009 AN D 46&47/AHD/2010 DATED 10.02.2012, THE TRIBUNAL HAS HELD THAT THE AD DITION/DISALLOWANCE TO THE EXTENT OF 12.5% ON ACCOUNT OF BOGUS PURCHASES W ILL MEET THE ENDS OF JUSTICE. HE FURTHER SUBMITTED THAT COPY OF THIS TR IBUNAL ORDER IS AVAILABLE ON PAGES 11-17 OF THE SUPPLEMENTARY PAPER BOOK. HE ALSO SUBMITTED THAT IN THAT CASE ALSO, THE NAMES OF PARTIES FROM WHOM T HE MATERIAL WAS PURCHASED BY THAT ASSESSEE WERE THE SAME I.E. M/S. GIRNAR SALES CORPORATION AND M/S. SHIV METAL CORPORATION. HE FU RTHER SUBMITTED THAT IN THAT CASE ALSO, THE TRIBUNAL HAS CONSIDERED THIS TRIBUNAL DECISION ALSO WHICH IS FOLLOWED BY LD. CIT(A) IN THE PRESENT CASE I.E. THE TRIBUNAL DECISION RENDERED IN THE CASE OF VIJAY PROTEINS LTD . AS REPORTED IN 58 ITD 528 AND EVEN AFTER CONSIDERING THIS TRIBUNAL DECISI ON, AS AGAINST 25% ADDITION, THE TRIBUNAL UPHELD THE ADDITION @ 12.5% ONLY BECAUSE IN THAT CASE, IT IS NOTED BY THE TRIBUNAL THAT BOOKS OF ACC OUNT WERE MAINTAINED BY THE ASSESSEE AND WERE SUBJECTED TO AUDIT U/S 44AB. HE FURTHER SUBMITTED THAT IN THE PRESENT CASE ALSO, IT IS NOTED BY LD. C IT(A) THAT THE ASSESSEE I.T.A.NO. 652,653 /AHD/2009 3 HAS PRODUCED QUANTITATIVE TALLY OF THE MATERIAL PUR CHASED AND MATERIAL SOLD AND THE PAYMENTS HAVE BEEN MADE THROUGH CHEQUE S FROM EXPLAINED FUNDS OF THE ASSESSEE. 5. AS AGAINST THIS, LD. D.R. SUPPORTED THE ORDER OF LD. CIT(A). HE FURTHER SUBMITTED THAT IN THE TRIBUNAL ORDER CITED BY LD. A.R., IT IS OBSERVED BY THE TRIBUNAL THAT IF THE IMPUGNED ADDIT ION MADE BY THE A.O. IS UPHELD, THE GP WILL BE MORE THAN THE SALES ITSEL F AND HENCE, THIS TRIBUNAL DECISION IS NOT APPLICABLE IN THE PRESENT CASE. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE TRIBUNAL DECISION CITED BY THE LD. A.R. WE FIND TH AT IN THAT CASE, THE TRIBUNAL HAS DULY CONSIDERED THE TRIBUNAL DECISION RENDERED IN THE CASE OF VIJAY PROTEINS LTD., (SUPRA), WHICH HAS BEEN FOLLOW ED BY LD. CIT(A) AND IN THAT CASE, ADDITION OF 25% WAS UPHELD BY THE TRI BUNAL. REGARDING THIS ARGUMENT OF LD. D.R. THAT IF THE ADDITION MADE BY T HE A.O. IS UPHELD THE GP WILL BE MORE THAN THE SALES, WE FIND THAT THIS O BSERVATION IS AS PER PARA 3 OF THE TRIBUNAL ORDER RENDERED IN THE CASE OF ANU BHAI SHIVLAL WHICH WAS REPRODUCED BY THE TRIBUNAL IN THE ORDER RENDERED IN THE CASE OF SHRI SATYANARAYAN P RATHI (SUPRA). IN THAT ORDER, THE T RIBUNAL HAS CONSIDERED ANOTHER TRIBUNAL DECISION RENDERED IN THE CASE OF S ANKIT STEEL TRADERS IN I.T.A.NO. 2801 & 2937/AHD/2008 DATED 20.05.2011. I N THAT CASE ALSO, THE ALLEGATION OF BOGUS PURCHASE WAS FROM THE SAME TWO PARTIES I.E. GIRNAR SALES CORPORATION AND SHIV SALES CORPORATION AS IN THE PRESENT CASE, AND IN THAT CASE ALSO, THE TRIBUNAL UPHELD TH E ADDITION @ 12.5% ONLY ON THE ALLEGED BOGUS PURCHASE. CONSIDERING ALL THE SE FACTS, AND CONSIDERING THE FINDING OF LD. CIT(A) WHICH COULD N OT BE CONTROVERTED BY THE LD. D.R. THAT ASSESSEE HAS FURNISHED QUANTITATI VE DETAILS OF MATERIAL I.T.A.NO. 652,653 /AHD/2009 4 PURCHASED AND MATERIAL SOLD, WE FEEL THAT ADDITION OF 12.5% OF THE ALLEGED BOGUS PURCHASE WILL MEET THE ENDS OF JUSTICE IN THE PRESENT CASE AND HENCE, WE HOLD SO BY RESPECTFULLY FOLLOWING THE PRE CEDENCE CITED BY LD. A.R. THE A.O. IS DIRECTED ACCORDINGLY IN BOTH THE YEARS. 7. IN THE RESULT, BOTH THESE PEALS OF THE ASSESSEE ARE PARTLY ALLOWED. 8. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE M ENTIONED HEREINABOVE. SD./- SD./- (KUL BHARAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 30/4. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 30/4.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 30/4 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.30/4 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 30/ 4/12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .