ITO 24(1)(3), MUMBAI V. ASHISH K AGGARWAL, MUMBAI

ITA 7179/MUM/2010

• Counselvise Citation: 717919914 RSA 2010
• Duration Of Justice: 1 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2012
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 19-10-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P K B MENON
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Bogus purchase
• Section: 131; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A MUMBAI BEFORE SHRI B.R. MITTAL, J.M. AND SHRI RAJENDRA SI NGH, A.M. ITA NO.7179/M/2010 ASSESSMENT YEAR :2007-08 INCOME TAX OFFICER WARD-24(1)(3) C-13, 5 TH FLOOR, ROOM NO.501 PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA (E) MUMBAI-400 051. SHRI ASHISH K. AGGARWAL B-602, MANSAROVAR SUCHIDHAM COMPLEX FILM CITY ROAD, MALAD(E) MUMBAI-400 097. PAN NO. AABPA 3464 H (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI P.K.B. MENON RESPONDENT BY : SHRI M. SUBRAMANIAN DATE OF HEARING : 29.5.2012 DATE OF PRONOUNCEMENT : 6.6.2012 O R D E R PER RAJENDRA SINGH, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORD ER DATED 20.8.2010 OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08. T HE ONLY DISPUTE RAISED BY THE REVENUE IN THIS APPEAL IS REGARDI NG DISALLOWANCE OF RS.21,94,898/- ON ACCOUNT OF BOGUS PURCHASES. ITA NO.7179/M/10 A.Y.07-08 2 2. FACTS IN BRIEF ARE THAT THE AO DURING THE ASSESSMENT P ROCEEDINGS NOTED THAT THE ASSESSEE HAD SHOWN CREDITORS TO THE TUNE OF RS.33,47,156/-. HE, THEREFORE, ISSUED NOTICE TO SOME OF THE CREDITORS WITH A VIEW TO VERIFY THE GENUINENESS. THE AO DID NO T RECEIVE ANY CONFIRMATION FROM M/S. METRO STEEL TRADERS FOR RS.21,9 4,898/- AND M/S. AJANTA STEEL FOR RS.6,182/-. THE AO THEREFORE, CONCLUDED THAT THE ABOVE PURCHASES WERE NOT PROVED AND ACCORDINGLY DISAL LOWED AND ADDED THE SAME TO THE TOTAL INCOME AS BOGUS PURCHASES. CIT(A) NOTED THAT LETTER UNDER SECTION 133(6) HAD BEEN DULY SERVE D ON M/S. METRO STEEL AND DESPITE THIS THERE WAS NO COMPLIANCE. CIT(A ) OBSERVED THAT THE AO COULD HAVE SUMMONED THE PARTY UNDER SECTION 13 1 WHICH WAS NOT DONE. THE ASSESSEE HAD DISCHARGED THE ONUS BY FILING NAME AND ADDRESS AND CONFIRMATION. HE THEREFORE DELETED THE AD DITION MADE BY AO OF RS.21,94,898/- AGGRIEVED BY WHICH, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE PARTIES PERUSED THE RECORD A ND CONSIDERED THE MATTER CAREFULLY. THE DISPUTE IS REGARDIN G DISALLOWANCE OF PURCHASES OF RS.21,94,898/- FROM M/S. METRO STEEL TRA DERS. THE AO ISSUED NOTICE UNDER SECTION 133(6) TO THE PARTY WITH A V IEW TO VERIFY THE GENUINENESS. NOTICE HAD BEEN DULY SERVED BUT THE PA RTY DID NOT RESPOND. THEREFORE, AO DISALLOWED THE CLAIM. CIT(A) DE LETED THE ADDITION ON THE GROUND THAT THE AO HAD NOT MADE ANY FURTHER ENQUIRY ITA NO.7179/M/10 A.Y.07-08 3 TO PROVE THAT THE PURCHASES WERE NOT GENUINE. IN OUR V IEW THE ORDER OF CIT(A) CAN NOT BE SUSTAINED. CIT(A) HAS POWER CO-TERMINU S WITH THAT OF AO AND IN CASE AO HAD NOT EXAMINED A PARTICULAR ASPE CT, CIT(A) IS DUTY BOUND TO EXAMINE THE SAME OR GET IT EXAMINED BY AO BY REMANDING THE MATTER BACK TO HIM. THE ADDITION CAN NO T BE DELETED BY CIT(A) ON THE GROUND THAT THE ISSUE WAS NOT EXAMINED BY AO. WE ARE NOT IN A POSITION TO GIVE A FINDING AS TO WHETHER THE PARTICULAR CREDITOR WAS GENUINE OR NOT. IT IS ALSO NOT KNOWN WHETHER OUTSTA NDING CREDITOR WAS IN RELATION TO CURRENT YEAR OR EARLIER YEAR. WE, THEREFORE, SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE ISSUE TO AO FOR PASSING A FRESH ORDER AFTER NECESSARY EXAMINATION OF THE MATTER IN TH E LIGHT OF THE OBSERVATIONS MADE ABOVE AND AFTER ALLOWING OPPORTUNIT Y OF HEARING TO THE ASSESSEE. 4. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 6.6.2012. SD SD (B.R. MITTAL ) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 6.6.2012. JV. ITA NO.7179/M/10 A.Y.07-08 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.