SURESH R. SHAH, MUMBAI V. ITO WD 24(2)(2), MUMBAI

ITA 6978/MUM/2012

• Counselvise Citation: 697819914 RSA 2012
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 29-07-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 21-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: VIPUL JOSHI
• Keywords: Bogus purchase
• Section: 143(3)

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI E BENCH . . , , , BEFORE S/SH. A.D. JAIN,JUDICIAL MEMBER & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.6978/MUM/2012, / ASSESSMENT YEAR - 2003 - 04 SHRI SURESH R. SHAH C/4/14, BHADRAN NAGAR S.V. ROAD, MALAD (W) , MUMBAI - 64 . PAN: AA GPS 6593 Q VS ITO WARD - 24(2)(2 ) C - 11, 501, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA(E) MUMBAI - 400 0 51 . ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY : SHRI VIPUL JOSHI - AR / REVENUE BY : SHRI S.S. RANA - DR / DATE OF HEARING : 29 - 07 - 2015 / DATE OF PRONOUNCEMENT : 29 - 07 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DATED 27.09.2012 OF THE CIT - 34,MUMBAI,THE ASSESSEE HAS FILED FOLLOWING GRO UNDS OF APPEAL: 1. THE LEARNED C I T ( A) ERRED IN CONFIRMING ADDITION OF RS.13,15,225/ - MADE BY THE A.O. TO THE INCOME OF YOUR APPELLANT ALLEGEDLY ON THE GROUND OF BOGUS PURCHASES FROM FOUR PARTIES NAMED IN THE ORDER PASSED BY THE A.O. 2. THE C IT( A) FAILED T O APPRECIATE THAT THE CONFIRMATIONS OF THESE FOUR PARTIES WERE BEFORE THE A.O. IN REMAND PROCEEDINGS OF ORIGINAL APPEAL, C I T ( A) IN ORIGINAL APPEAL PROCEEDINGS AS WELL AS BEFORE THE HON'BLE TRIBUNAL TO WHOSE ORDER THE A.O. WAS GIVING EFFECT IN CURRENT APPE AL. 'IT IS, THEREFORE, PRAYED THAT THE ORDER MAKING ADDITION OF RS. 13,15,225/ - BE CANCELLED AND THE A.O. BE DIRECTED TO ACCEPT THE INCOME AS RETURNED AT RS.62,980/ - .' 3 . YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER AND/OR TO DELETE ANY OR ALL GROUNDS OF A PPEAL AT THE TIME OF PERSONAL HEARING. BRIEF HISTORY: ASSESSEE,AN INDIVIDUAL,ENGAGED IN THE BUSINESS OF TRADING IN POLYSTER,BLENDED COTTON,FILED HIS ORIGINAL RETURN OF INCOME, ON 27.11.2003, DECLARING INCOME OF RS.62,980/ - .THE ASSESSING OFFICER (AO)COMPLETED THE ASSESSMENT ON 30.12.2005,U/S. 143(3) OF THE ACT,DETERMINING THE INCOME OF THE ASSESSEE AT RS. 75.04 LAKHS.THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA). MATTER TRAVELLED UP TO THE TRIBUNAL,WHO RESTORED THE MATTER BACK TO TH E FILE OF THE AO.THE ASSESSEE FILED AN APPLICATION U/S.254 OF THE ACT BEFORE THE TRIBUNAL.IN THE MEANWHILE, THE AO COMPLETED THE ASSESSMENT ON 29.12.2011 U/S.143(3)R.W.S.254 OF THE ACT AND DETERMINED THE INCOME OF THE ASSESSEE AT RS.49,80,470/ - . 2. EFFECT IVE GROUND OF APPEAL IS ABOUT ADDITION OF RS.13.15 LAKHS.AS PER THE AO,DURING THE SECOND ROUND OF ASSESSMENT PROCEEDINGS,THE ASSESSEE DID NOT PRODUCE EVIDENCE/DOCUMENTS WITH REFERENCE TO PURCHASE FROM FOUR PARTIES NAMELY SAGAR TRADERS(RS.1.78 LAKHS),R D EN TERPRISES (RS.3.00 LAKHS),MAYUR CORPORATION(RS.5 LAKHS)AND SUPER ENTERPRISES (RS.2.50 LAKHS). HE HELD THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE GENUINENESS OF THE PURCHASE,THAT PURCHASES MADE ITA/ 6978/M/12 ,AY. 03 - 04 - SRS 2 FROM ABOVE FOUR PARTIES COULD NOT BE TREATED AS GENUINE.FINAL LY,HE MADE AN ADDITION OF RS.13,15,225/ - TO THE TOTAL INCOME OF THE ASSESSEE . 3 .AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY(FAA).BEFORE HIM IT WAS ARGUED THAT THE AO HAD SUBMITTED TWO REMAND REPORT S DURING FIRST ROUND OF LITIGATION,THAT VIDE HIS REMAND REPORT DATED 19.02.2007 THE AO HAD INFORMED THE THEN FAA THAT THE ASSESSEE HAD FILED CONFIRMATION OF ALL THE FOUR PARTIES,THAT CONFUSION HAD ARISEN BECAUSE OF THE ORDER OF THE TRIBUNAL. AFTER CONSIDER ING THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE ASSESSEE ,THE FAA HELD THAT THE TRIBUNAL HAD GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE HAD NOT FILED CONFIRMATION IN RESPECT OF FOUR PARTIES FROM WHOM PURCHASES WERE MADE,THAT THE ASSESSEE HAD FAILED T O PRODUCE NECESSARY EVIDENCE IN HIS SUPPORT.HE UPHELD THE ORDER OF THE AO. 4. BEFORE US,THE AUTHORISED REPRESENTATIVE(AR)ARGUED THAT THE ASSESSEE HAD PRODUCED THE CONFIRMATIONS OF ALL THE FOUR PARTIES BEFORE THE AO DURING REMAND PROCEEDINGS,THAT IN THE SEC OND REMAND REPORT DATED 19.02.2007 THE AO HAD ADMITTED OF FURNISHING OF THE CONFIRMATION LETTERS,THAT THE ASSESSEE HAD FILED MA BEFORE THE TRIBUNAL ABOUT THE FILING OF CONFIRMATIONS,THAT THE TRIBUNAL HAS ADMITTED THAT THE ASSESSEE HAD FILED CONFIRMATIONS,T HAT THE AO AND THE FAA ADJUDICATED THE ISSUE BEFORE THE OUTCOME OF THE MA FILED BY THE ASSESSEE .HE REFERRED TO PAGE NO.42 - 44 AND 46 - 47 OF THE PAPER BOOK.DEPARTMENTAL REPRESENTATIVE(AR)LEFT THE ISSUE TO THE DISCRETION OF THE BENCH. 5. WE HAVE HEARD THE RIVA L SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT DURING THE FIRST ROUND OF LITIGATION THE ASSESSEE HAD FILED CONFIRMATIONS OF FOUR PA RTIES BEFORE THE AO,THAT THE AO, IN HIS REMAND REPORT DATED 1 9.02.2007, HAD INFORMED THE FAA ABOUT FURNISHING OF CONFIRMATIONS FROM THE ASSESSEE ,THAT IN THE PAPER BOOK FILED BEFORE THE TRIBUNAL THE ASSESSEE HAD SUBMITTED THE REMAND REPORT OF 19.02.2007,THAT THE TRIBUNAL HAD RESTORED BACK THE MATTER TO THE FILE OF THE AO TO LOOK IN TO THE PROVISIONS OF SECTION 40(A)( 3)OF THE ACT,THAT THE ASSESSEE HAD FILED MA BEFORE THE TRIBUNAL,THAT WHILE DECIDING THE MA THE TRIBUNAL HAD MENTIONED THAT THE FACT OF FILING OF CONFIRMATIONS WOULD NOT AFFECT THE REMANDING OF MATTER TO THE AO,THAT THE AO OR THE FAA DID NOT HAVE BENEFIT OF THE ORDER OF THE TRIBUNAL PASSED WITH REGARD TO THE MA.AS THE ASSESSEE HAD FILED THE CONFIRMATIONS BEFORE THE AO BEFORE THE SECOND REMAND REPORT WAS SENT TO THE FAA BY HIM. PAGES OF THE PAPER BOOK RELIED UPON BY THE AR ALSO PROVE THE FACT.THEREFORE,WE ARE OF THE OPINION THAT THE FAA WAS NOT JUSTIFIED IN CONFIRMING THE ORDER OF THE AO.REVE RS ING HIS ORDER WE DECIDE EFFECTIVE GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE . AS A RESULT,APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. . ORDER PRONOU NCED IN THE OPEN COURT ON 29 TH ,JULY,2015. 29 , 2 015 SD/ - SD/ - ( . . /A. D. JAIN) ( / RAJENDRA) / JUDICIAL MEM BER / ACCOUNTANT MEMBER / MUMBAI, /DATE: 29 . 7. 2015 ITA/ 6978/M/12 ,AY. 03 - 04 - SRS 3 . . . JV. SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR E BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.