BHARAV TUBE (INDIA), MUMBAI V. INCOME TAX OFFICER 19(1)(2), Mumbai

ITA 6782/MUM/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9867 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 29-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESH
• Keywords: Bogus purchase; Opportunity of being heard
• Section: 142(1)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SHAMIM YAHYA , A M ./ I.T.A. NO. 6782/MUM/2017 ( / ASSESSMENT YE AR: 2010 - 11 ) M/S. BHARAV TUBE (INDIA) C/O. M/S. NAKODA METAL INDUSTRIES, ROOM NO. 101, 1 ST FLOOR, LAKDAWALA SAPHIRE CENTRE, 4 TH KUMBHARWADA LANE, MUMBAI - 400 004 / VS. INCOME TAX OFFICER 19(1)(2) ROOM NO. 204, MATRU MANDIR, TARDEO, MUMBAI - 400 004 ./ ./ PAN/GIR NO. AAEFT 1198 E ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SHRI SAURABH DESHPANDE / DATE OF HEARING : 01.03. 2018 / DATE OF PRONOUNCEMENT : 07.03 .2018 / O R D E R PER S HAMIM YAHYA , A. M.: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 10.08.2017, PERTAINING TO ASSESSMENT YEAR 2 010 - 11, WHEREIN THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS DISMISSED THE APPEAL FOR NON - PROSECUTION. 2. THE ISSUE IN THIS CASE PERTAINS TO BOGUS PURCHASES. THE BRIEF FACTS ARE THAT THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEA R 2010 - 11 O N 2 ITA NO. 6782/MUM/20 17 M/S. BHARAV TUBE (INDIA) 24.09.2010 DECLARING TOTAL INCOME OF RS.1,33,380/ - . SUBSEQUENTLY, THE ASSESSING OFFICER RECEIVED INFORMATION FROM THE SALES TAX DEPARTMENT THROUGH THE DGIT(INV.), MUMBAI THAT THE ASSESSEE HAD PROCURED BOGUS PURCHASE BILLS TOTALING TO RS.2 ,38,50,302/ - FROM 31 PARTIES. THE ASSESSING OFFICER ISSUED NOTICE U/S.148 ON 21.10.2014. SUBSEQUENTLY, NOTICES U/S.143(2) AND 142(1) WERE ISSUED ALONG WITH QUESTIONNAIRE. IN RESPONSE TO THE NOTICES, DETAILS C ALLED FOR WERE SUBMITTED. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF TRADING IN FERROUS AND NON - FERROUS METAL. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE PARTIES FROM WHOM THE ASSESSEE HAD PURCHASED THE GOODS AND PROVE THE GENUINENESS OF THE PURCHASES. THE ASSESSING OFFICER HAS STATED IN THE ASSESSMENT ORDER THAT THE ASSESSEE FAILED TO PRODUCE THE PARTIES BEFORE HIM. THUS , THE PURCHASES AND GEN UINENESS REMAINED UNEXPLAINED. THE ASSESSING OFFICER HAS THEREFORE DISALLOWED RS.29,81,288/ - I.E . 12.5% OF THE BOGUS PURCHASES OF RS.2,38,50,302 / - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSING OFFICER HAS COMPLETED THE ASSESSMENT BY DETERMINING THE TOTAL INCOME OF THE ASSESSEE AT RS.31,14,670/ - AND LEVIED TAX OF RS.15,64,480/ - ON THE ASSESSEE . 3. UPON THE ASSESSE E 'S APPEAL , THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DISMISSED THE APPEAL FOR NON PROSECUTION HOLDING THAT ASSESSE E HAD TAKEN A LACKADAISICAL APPROACH WITH REGARD TO APPELLATE PROCEEDINGS. 3 ITA NO. 6782/MUM/20 17 M/S. BHARAV TUBE (INDIA) 4. AGAINST THIS ORDER , THE ASSESSEE IS IN APPEAL BEFORE THE ITAT. 5. I HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTICE. 6. UPON CAREFUL LY CONSIDERATION, I FIND THAT IT IS INCUMBENT UPON THE LD. COMMISSIONER OF INCOME TAX (APPEALS) TO PASS AN ORDER ON THE MER ITS OF THE CASE AND NOT DISMISS THE APPEAL FOR NON PROSECUTION. FOR THIS PROPOSITION , I PLACE RELIANCE UPON FOLLOWING CASE LAWS : 1. CIT VS PREMKUMAR ARJUNDAS LUTHRA (HUF) (2017) 154 DTR (BOM) 302 2. CIT VS S CHENNIAPPA MUDALIAR (1969)74 ITR 1 (SC) 7. ACCORDINGLY IN THE INTEREST OF JUSTICE , I REMIT THE ISSUE RAISED IN APPEAL TO THE FILE OF THE LD. COMMISSIONER OF INCOME TAX (APPEA LS). THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I S DIRECTED TO CONSIDER THE ISSUE AFRESH AND PASS AN ORDER ON THE MERITS OF THE CASE AFTER GIVING THE ASSESSEE PROPER OPPORTUNITY OF BEING HEARD. 8. IN THE RESULT , THIS APPEAL BY THE ASSESSEE STANDS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 07.03.2018 SD/ - (S HAMIM YAHYA ) / A CCOUNTANT MEMBER MUMBAI ; DATED : 07.03.2018 . . ./ ROSHANI , SR. PS 4 ITA NO. 6782/MUM/20 17 M/S. BHARAV TUBE (INDIA) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI