ITO 25(2)(3), MUMBAI V. SANJAY V DHRUV, MUMBAI

ITA 6592/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8932 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-01-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 31-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEENA SANTOSH
• Assessee Lawyers: KETAN MEHTA
• Keywords: Bogus purchase; Unexplained expenditure; Rule of consistency
• Section: 69C; 143(3); 133(6)

Judgement Text

, B BB B INCOME TAX APPELLATE TRIBUNAL,MUMBAI - E BENCH , IOU IOUIOU IOU , BEFORE S/SH. RAJENDRA, ACCOUNTANT MEMBER & P AWAN SINGH, JUDICIAL MEMBER /.ITA NO.6592/MUM/2014, /ASSESSMENT YEAR-2011-12 ITO-25(2)(3), ROOM NO. 105, 1 ST FLOOR, BUILDING NO. C-11, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400051. VS. SHRI SANJAY V. DHRUV, 703, MEHUL APARTMENT, TPS-III, RAM NAGAR, SHIMPOLI, BORIVALI (W), MUMBAI-400092. PAN: AAHPD5769L ( / APPELLANT) ( / RESPONDENT) / REVENUE BY : MS. BEENA SANTOSH (DR) ! ! / ASSESSEE BY : SHRI KETAN MEHTA (AR) ' ! / DATE OF HEARING : 12 -01-2017 ! '( / DATE OF PRONOUNCEMENT : 12 -01-2017 , 1961 ' 254(1) #!$! ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER PAWAN SINGH, J.M. IOU IOUIOU IOU : 1. THIS APPEAL BY REVENUE U/S. 253 OF THE INCOME-TAX A CT IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-35, MUMBAI DATED 21.08.2014 FOR AY 2011-12. IN THE APPEAL THE ASSESSEE HAS RAISED AS MANY AS EIGHT GROUNDS OF APPEAL. HOWEVER, AS PE R OUR CONSIDERED OPINION THERE IS ONLY ONE SUBSTANTIAL GROUND OF APPEAL IS THAT WHETHER T HE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 45,20,339/- U/S 69C OF THE ACT. RE ST OF THE GROUNDS OF APPEAL IS ARGUMENTATIVE IN NATURE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A PROPRIETOR OF M/S. DEAL WELL ENTERPRISES ENGAGED IN THE TRADING OF CHEMICALS, FILED ITS RETU RN OF INCOME FOR RELEVANT AY ON 28.09.2011 DECLARING TOTAL INCOME AT RS. 2,21.972/- . THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED ON 26.03.2014. THE ASSESSING OFFICER (AO) WHILE MAKING THE ASSESSMENT MADE THE ADDITION OF RS. 45,20,339/- AS UNEXPLAINED EXPENDITURE U/S 69C ON ACCOUNT OF BOGUS PURCHASES. ON APPEAL BEFORE THE LD. CIT(A), T HE ENTIRE ADDITION WAS DELETED. AGGRIEVED BY THE ORDER OF LD. CIT(A), THE REVENUE H AS FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE REPRESENTATIVES OF THE PARTIES AN D GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD. DR FOR THE REVENUE SUPP ORTED THE ORDER OF AO. ON THE OTHER HAND, LD. AR OF THE ASSESSEE ARGUED THAT THE GROUND S OF APPEAL RAISED BY THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF ASSESSEES OWN CASE FOR AY 2010-11 IN ITA NO. 5089/MUM/2014. THE LD. AR OF THE ASSESSEE FILED THE COPY OF DECISION 2 ITA NO. 6592/M/2014 SHRI SANJAY V. DHRUV OF THE TRIBUNAL DATED 29.02.2016. THE LD. DR FOR TH E REVENUE NOT DISPUTED THE DECISION OF TRIBUNAL. ON SPECIFIC QUERY FROM LD. DR FOR THE REV ENUE, IF ANY APPEAL IS FILED AGAINST THE DECISION OF TRIBUNAL FOR AY 2010-11. THE LD. DR FOR THE REVENUE SHOWN HER IGNORANCE, IF THE APPEAL IS FILED BEFORE THE HONBLE HIGH COURT. 4. WE HAVE CONSIDERED THE CONTENTIONS OF THE PARTIES A ND GONE THROUGH THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR EARLIER YEARS. THE CO-OR DINATE BENCH OF THIS TRIBUNAL IN REVENUES APPEAL FOR AY 2010-11 IN ITA NO. 5089/MUM /2014 DATED 29.02.2016 PASSED THE FOLLOWING ORDER: 7. WE HAVE CONSIDERED THE SUBMISSIONS OF THE PARTIE S AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT ON THE BASIS OF INFORMATION OBTAINED FROM THE SALES TAX DEPARTMENT, ASSESSING O FFICER ISSUED NOTICES UNDER SECTION 133(6) TO THREE PARTIES OUT OF WHICH TWO NOTICES WE RE RETURNED UN-SERVED BY THE POSTAL AUTHORITIES AND IN CASE OF ONE OF THE PARTIES THROU GH NOTICE WAS SERVED, THERE WAS NO RESPONSE. THEREFORE, HE CALLED UPON THE ASSESSEE TO PRODUCE THE CONCERNED PARTIES. AS THE ASSESSEE FAILED TO PRODUCE THE CONCERNED PARTIES, T HE ASSESSING OFFICER, THEREFORE, PRIMARILY RELYING UPON THE INFORMATION OBTAINED FRO M THE SALES TAX DEPARTMENT, SHRI SANJAY V. DHRUV HELD THE PURCHASES TO BE BOGUS AND MADE ADDITION UNDER SECTION 69C OF THE ACT. THOUGH, IT MAY BE A FACT THAT ASSESSEE WAS NOT ABLE TO PRODUCE THE CONCERNED PARTIES BEFORE THE ASSESSING OFFICER, FOR WHATEVER MAY BE THE REASON, FACT REMAINS DURING ASSESSMENT PROCEEDINGS ITSELF THE ASSESSEE HAD PROD UCED CONFIRMED LEDGER COPIES OF CONCERNED PARTIES, BANK ACCOUNT STATEMENT, PURCHASE BILLS, DELIVERY CHALLANS, ETC., TO PROVE THE GENUINENESS OF THE PURCHASES. IT IS ALSO A FACT ON RECORD THAT THE ASSESSING OFFICER HAS NOT DOUBTED THE SALES EFFECTED BY THE ASSESSEE. THU S, IT IS LOGICAL TO CONCLUDE THAT WITHOUT CORRESPONDING PURCHASES BEING EFFECTED THE ASSESSEE COULD NOT HAVE MADE THE SALES. MOREOVER, THE ASSESSING OFFICER HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONCLUSIVELY ESTABLISH THE FACT THAT PURCHASES ARE BOGUS. MERELY RELYING UPON THE INFORMATION FROM THE SALES TAX DEPARTMENT OR THE FACT THAT PARTIES WERE NOT PRODUCED THE ASSESSING OFFICER COULD NOT HAVE TREATED THE PURCHASES AS BOGUS AND M ADE ADDITION. IF THE ASSESSING OFFICER HAD ANY DOUBT WITH REGARD TO PURCHASES MADE, IT WAS INCUMBENT UPON HIM TO MAKE FURTHER INVESTIGATION TO ASCERTAIN THE GENUINENESS OF THE T RANSACTIONS. WITHOUT MAKING ANY ENQUIRY OR INVESTIGATION THE ASSESSING OFFICER CANN OT SIT BACK AND MAKE THE ADDITION BY SIMPLY RELYING UPON THE INFORMATION OBTAINED FROM T HE SALES TAX DEPARTMENT AND ISSUING NOTICES UNDER SECTION 133(6) OF THE ACT. AS THE ASS ESSING OFFICER HAS FAILED TO MAKE SHRI SANJAY V. DHRUV ANY ENQUIRY OR INVESTIGATION TO PRO VE THE FACT THAT THE PURCHASE TRANSACTIONS ARE NOT GENUINE WHEREAS THE ASSESSEE H AS BROUGHT DOCUMENTARY EVIDENCES ON RECORD TO PROVE GENUINENESS OF SUCH TRANSACTIONS WH ICH ARE NOT FOUND TO BE FABRICATED OR NON-GENUINE, THE ACTION OF THE ASSESSING OFFICER IN IGNORING THEM CANNOT BE ACCEPTED. MOREOVER, AS RIGHTLY OBSERVED BY THE LEARNED COMMIS SIONER (APPEALS), WHEN THE PAYMENT TO THE CONCERNED PARTIES ARE THROUGH PROPER BANKING CHANNEL AND THERE IS NO EVIDENCE BEFORE THE ASSESSING OFFICER THAT THE PAYMENTS MADE WERE AGAIN ROUTED BACK TO THE ASSESSEE, THE ADDITION MADE UNDER SECTION 69C CANNOT BE SUSTAINED. MOREOVER, THE DECISIONS RELIED UPON BY THE LEARNED A.R. ON CAREFU L ANALYSIS WERE FOUND TO BE SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT APPEAL. THER EFORE, FINDING NO INFIRMITY IN THE ORDER 3 ITA NO. 6592/M/2014 SHRI SANJAY V. DHRUV OF THE FIRST APPELLATE AUTHORITY, WE UPHOLD THE SAM E BY DISMISSING THE GROUNDS RAISED BY THE DEPARTMENT. 5. THUS, KEEPING IN VIEW THE ORDER OF THE COORDINATE B ENCH AND THE PRINCIPLE OF CONSISTENCY, THE GROUND OF APPEAL RAISED BY REVENUE IS COVERED I N FAVOUR OF ASSESSEE. HENCE, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL IN THE PRES ENT APPEAL AS RAISED BY REVENUE. IN THE RESULT, APPEAL OF T HE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH JANUARY 2017. + ! , - 12 TH ( 201 7 ! 12 3 SD/- SD/- ( / RAJENDRA ( IOU IOUIOU IOU / PAWAN SINGH)) ' / ACCOUNTANT MEMBER # ' / JUDICIAL MEMBER 2 /MUMBAI, - /DATE: 16.01.2017 SK ' (!)* +*! / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ 45 ( 6' , 4. THE CONCERNED CIT / 45 6' 5. DR E BENCH, ITAT, MUMBAI / 781 '95 B BB B , . . . 2 6. GUARD FILE/ 1 2 7' /TRUE COPY// + / BY ORDER, / DY./ASST. REGISTRAR ( 95 , 2 /ITAT, MUMBAI