MERIDIAN FOODS PVT. LTD., Mumbai V. I.T.O. - 5(3)(4), Mumbai

ITA 687/MUM/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4515 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SURESH ANCHALIYA
• Keywords: Search and seizure; Opportunity of being heard; Opportunity of cross examination; Third party statement; Accommodation entries
• Section: 147; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER ITA NO. 687 / MUM . /2018 ( ASSESSMENT YEAR : 20 10 1 1 ) MERIDIAN FOODS PVT. LTD. 903, REHEJA CENTRE FREE PRESS JOURNAL MARG NARIMAN POINT, MUMBAI 400 021 PAN AANCS0271M . APPELLANT V/S INCOME TAX OFFICER WARD 5 ( 3 )( 4 ), MUMBAI . RESPONDENT ASSESSEE BY : SHRI SURESH ANCHALIYA REVENUE BY : SHRI VIVEK ANAND OJHA DATE OF HEARING 0 6 . 0 3 .20 19 DATE OF ORDER 22.03.2019 O R D E R A FORESAID APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 21 ST SEPTEMBER 2017, PASSED BY THE LEARNED COMMISSIONER (APPEALS) 10 , MUMBAI , PERTAINING TO THE ASSESSMENT YEAR 20 10 11 . 2 . B RIEF FACTS ARE, THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN DIAMOND. IN A SEARCH AND SEIZURE OPERATION CONDUCTED UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ), ON BHANVARLAL JAIN GROUP ON 3 RD OCTOBER 2013 2 MERIDIAN FOODS PVT. LTD. CERTAIN INCRIMINATING MATERIALS WERE FOUND AND SEIZED . ON THE BASIS OF INFORMATION / INCRIMINATING MATERIAL, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE IS ONE OF THE BENEFICIARIES OF THE ACCOMMODATION ENTRIES PROVIDED BY BHANVARLAL JAIN GROUP. ACCORDINGLY, HE R E OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASES OF ` 1,87,56,587 FROM PUSHPAK GEMS, AN ENTITY ALLEGEDLY CONTROLLED BY BH ANVARLAL JAIN GROUP. IN RESPONSE TO THE QUERY RAISED BY THE ASSESSING OFFICER, THE ASSESSEE FURNISHED COPIES OF PURCHASE BILLS, CONFIRMATION AND AFFIDAVIT, BANK STATEMENT, INCOME TAX ASSESSMENT DETAILS, ETC. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE CONC ERNED PARTY BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER AFTER ANALYZING THE INFORMATION / INCRIMINATING MATERIAL AVAILABLE ON RECORD , INCLUDING STATEMENTS OF THIRD PARTIES , ULTIMATELY CONCLUDED THAT PURCHASES OF ` 1,87,56,587, ARE NON GENUINE. THER EFORE, HE ADDED BACK AN AMOUNT OF ` 15,00,527 TO THE INCOME OF THE ASSESSEE , BEING 8% OF THE NON GENUINE PURCHASES. THE AFORESAID ADDITION WAS ALSO SUSTAINED IN APPEAL BY THE LEARNED COMMISSIONER (APPEALS). 3 . THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THOUGH , THE ASSESSEE HAD PRODUCED ALL EVIDENCES TO PROVE THE GENUINENESS OF THE PURCHASES, HOWEVER, ONLY BECAUSE THE ASSESSEE COULD NOT PRODUCE THE 3 MERIDIAN FOODS PVT. LTD. CONCERNED SELLING DEALER, THE ASSESSING OFFICER MADE THE IMPUGNED ADDITION. HE SUBMITTED , NOW THE SELLING D EALER IS WILLING TO APPEAR BEFORE THE ASSESSING OFFICER. HE SUBMITTED , IN CASE THE ASSESSING OFFICER ISSUE S SUMMONS TO THE SELLING DEALER , THE ASSESSEE WOULD ENSURE APPEARANCE OF THE CONCERNED PARTY BEFORE THE ASSESSING OFFICER. THUS, HE SUBMITTED , THE ISS UE MAY BE RESTORED TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION. 4 . THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS) AND THE ASSESSING OFFICER. 5 . I HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, THE ASSESSING OFFICER HAS ACCEPTED THAT IN THE C OURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAD FURNISHED VARIOUS DOCUMENTARY EVIDENCES INCLUDING CONFIRMATION AND AFFIDAVIT OF THE SELLING D EA LER . IT APPEARS, ONLY BECAUSE THE ASSESSEE COULD NOT PRODUCE THE CONCERNED SELLING DEALER, THE ASSESSING OFFICER HAS TREATED THE PURCHASES AS NON GENUINE AND MADE THE IMPUGNED ADDITION. OF COURSE, WHILE DOING SO, THE ASSESSING OFFICER HAS RELIED UPON CERTA IN THIRD PARTY STATEMENTS. AS SUBMITTED BEFORE ME BY THE LEARNED AUTHORISED REPRESENTATIVE, IF THE SELLING DEALER IS WILLING TO APPEAR BEFORE THE ASSESSING OFFICER TO AUTHENTICATE THE SALES MADE BY IT TO THE ASSESSEE, THE ASSESSING OFFICER MUST TAKE 4 MERIDIAN FOODS PVT. LTD. INT O A CCOUNT THE EVIDENCE OF THE SELLING DEALER. THEREFORE, I AM INCLINED TO RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. I DIRECT THE ASSESSING OFFICER TO ISSUE SUMMONS UNDER SECTION 1 31 OF THE ACT TO THE SELLING DEALER UPON INTIMATION TO THE ASSESSEE. ONCE SUCH SUMMONS UNDER SECTION 131 OF THE ACT IS ISSUED TO THE SELLING DEALER, THE ASSESSEE MUST ENSURE APPEARANCE OF THE CONCERNED SELLING DEALER BEFORE THE ASSESSING OFFICER. WITH THE AFORESAID OBSERVATIONS , GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 6 . IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22.03.2019 SD/ SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 22 .03.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI