ACIT CIR 12(3), MUMBAI V. KAYSONS, MUMBAI

ITA 7324/MUM/2011

• Counselvise Citation: 732419914 RSA 2011
• Duration Of Justice: 3 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-12-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 01-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: H S RAHEJA
• Keywords: Bogus purchase; Unexplained investment; Corroborative evidences; Accommodation entries
• Section: 143(3); 133A; 147

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI R.C. SHARMA, ACCOUNTANT MEMBER & SHRI SANJAY GARG, JUDICIAL MEMBER ./ I.T.A. NO.7324 /MUM/2011 ( / ASSESSMENT YEAR : 2003-2004 A CIT CIRCLE 12(3), ROOM NO. 137, IST FLOOR, AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. / VS. M/S KAYSONS, 4, STADIUM HOUSE, VEER NARIMAN ROAD, CHURCHGATE, MUMBAI 400 020. ./ PAN : AADFK 7767Z ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI PREMANAND J R E SPONDENT BY : SHRI H.S. RAHEJA / DATE OF HEARING : 4-12-2014 / DATE OF PRONOUNCEMENT : 21-01-2015 [ !' / O R D E R PER R.C. SHARMA, A.M . : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. CIT(A) 23, MUMBAI DATED 24-8-2011 FOR THE A.Y . 2003-04 WHEREIN THE FOLLOWING GROUNDS HAVE BEEN TAKEN BY THE REVENU E: '1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE ID. CIT(A) HAS ERRED IN DELETING TH E ADDITION OF RS.32,53,043 U/S.69C OF THE I. T. ACT, 1961 MADE BY THE AO' 1A. 'WHILE DOING SO, THE ID. CIT(A) HAS FAILED TO A PPRECIATE THE DETAILED FINDINGS OF THE AO IN THE ASSESSMENT ORDER STATING THAT THE ASSESSEE HAS MERELY REFUSED THE TRANSACTIO N WITH SHRI R.K. GUPTA MORE PARTICULARLY THE SALES REGISTER OF THE ASSESSEE DOES NOT REVEAL THE ACCOMMODATION BILLS OF THE GUPTA AS CONFESSED BY SH RI ITA 7324/M/11 2 GUPTA DURING THE COURSE OF SURVEY U/S. 133A OF THE I. T. ACT' 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) HAS ERRED IN NOT APPRECI ATING THAT THE ASSESSEE HAS PURCHASED GOODS FROM DIFFERENT PAR TIES AND OBTAINED ACCOMMODATION ENTRIES FROM GUPTAS AND THEREAFTER DISPOSING OFF THE SALE TO THEIR CUSTOMER S IGNORING THE FACT THAT AO HAS CORRECTLY HELD THAT T HE AMOUNT OF RS.32,53,043 IS IN THE NATURE OF UNEXPLAINED INVESTMENT IN THE PURCHASE MADE VIA ACCOMMODATION BILL FOR WHICH ASSESSEE HAS NO PLAUSI BLE EXPLANATION.' 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) HAS ERRED IN NOT APPRECIATIN G THE FINDINGS OF THE AO IN HIS ASSESSMENT ORDER ABOUT NO N FURNISHING OF PROPER REPLIES BY THE ASSESSEE AS WEL L AS GUPTAS AND THE INFORMATION FURNISHED BY THE GUPTAS ABOUT THEIR BANK A/C. FOUND TO BE INCORRECT AND ON SOME OF THE POINTS LIKE FURNISHING OF SALE BILLS NO COMPLIA NCE WAS MADE.. 4. THE LD. CIT(A) ERRED IN ALLOWING THE RELIEF TO THE ASSESSEE DISREGARDING THE FACT THAT THE ASSESSE E REFUSED TO HAVE EVER MADE ANY PURCHASE FROM SHRI GU PTA WHILE THE BOOKS OF ACCOUNT OF SHRI GUPTA REVEALS SO METHING TOTALLY CONTRARY TO THE SUBMISSION OF THE ASSESSEE. ' 5. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE AO BE RESTORED .. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND PERUSED TH E RECORDS. THE ASSESSING OFFICER HAS STATED IN HIS ORDER THAT IN T HIS CASE AN INTIMATION WAS RECEIVED FROM DCIT CENTRAL CIRCLE-20 DATED 25/03/2010 INFORMING THAT ONE SHRI R.K. GUPTA IS TH E PERSON ENGAGED IN THE ACTIVITIES OF ISSUING ACCOMMODATION BILLS UNDER THE NAME AND STYLE OF M/S MANOJ MILLS, M/S ASTHA SILK I NDUSTRIES AND M/S SHREE RAM SALES & SYNTHETICS, BELONGING TO FAMILY M EMBERS OF THE SAID PERSON. A SURVEY ACTION U/S 133A WAS CARRIED O UT BY THE DEPARTMENT IN THIS CASE AND IN THE STATEMENT RECORD ED DURING THE COURSE OF SURVEY THE SAID SHRI R.K. GUPTA CONFESSED THAT HE IS ENGAGED IN THE BUSINESS OF ISSUING ACCOMMODATION BILLS. ALO NG WITH THE SAID INTIMATION PHOTOCOPIES OF ACCOMMODATION BILLS WERE ALSO ENCLOSED ITA 7324/M/11 3 SHOWING THE TRANSACTIONS SPREAD OVER DIFFERENT PART IES AND FOR THIS YEAR AS WELL. PERUSAL OF THE SAID BILL SHOWED THAT THE ALLEGED SALES BILLS WERE ALSO ISSUED TO THE ASSESSEE M/S KAYSONS, MUMBA I. ACCORDINGLY, THE CASE WAS REOPENED U/S.147 FOR A.Y. 2003-04. BY THE IMPUGNED ORDER, THE LD. CIT(A) DELETED THE ADDITION AFTER HA VING THE FOLLOWING OBSERVATION:- THE ASSESSMENT ORDER, SUBMISSIONS MADE FOR THE APPE LLANT AND MATERIALS ON RECORD HAVE BEEN CONSIDERED. THE A DDITION HAS BEEN MADE BY THE ASSESSING OFFICER ON THE BASIS OF STATEMENT MADE BY SHRI R.K. GUPTA DURING THE COURSE OF SURVEY, STA TING THAT HE WAS ENGAGED IN ISSUING ACCOMMODATION BILLS AND THAT M/S KAYSONS WAS ONE OF THE PARTIES TO WHOM SUCH ACCOMMODATION BILLS WERE ISSUED. SHRI R.K.GUPTA SUBSEQUENTLY ALSO CONFIRMED THIS POSITION AND FURNISHED INTER ALIA COPY OF LEDGER AC COUNT OF M/S KAYSONS IN THEIR BOOKS OF ACCOUNT. HOWEVER THIS STATEMENT/CONFIRMATION WAS LATER RETRACTED UPON THE APPELLANT'S DENIAL OF ANY TRANSACTIONS WITH THE GUPTA CONCERNS. THE APPELLANT HAS DENIED HAVING ANY TRANSACTIONS WI TH THE GUPTA CONCERNS. THE ASSESSING OFFICER, BESIDES THE STATEMENT OF SHRI GUPTA AND SUBSEQUENT CONFIRMATION (WHICH WAS LATER WITHDRAWN) HAS NOT BROUGHT ANYTHING ON RECORD TO CONNECT THE A PPELLANT WITH THE GUPTA CONCERNS, OR SHOW ANY TRANSACTIONS WHATSO EVER BETWEEN THEM. THE ASSESSING OFFICER'S INQUIRIES REGARDING T HE BANK ACCOUNTS (ON THE BASIS OF DETAILS FURNISHED BY SHRI GUPTA, A ND ALSO REGARDING BANK ACCOUNT IN ICICI BANK, ZAVERI BAZAR) ALSO DID NOT YIELD ANY LINK BETWEEN THE APPELLANT AND THE GUPTA CONCERNS. THE A SSESSING OFFICER ALSO DID NOT GIVE' THE APPELLANT AN OPPORTU NITY TO CROSS EXAMINE SHRI R.K. GUPTA. THE ASSESSING OFFICER HAS EXAMINED THE APPELLANT'S BOOKS AND NOT POINTED OUT ANY ENTRY WHE REBY IT WAS SHOWN THAT THE APPELLANT HAD BOOKED PURCHASES FROM ANY OF THE CONCERNS OF THE GUPTAS. IN FACT, HAD THE APPELLANT OBTAINED ACCOMMODATION BILLS AND BOOKED BOGUS PURCHASES, THE ENTRIES OF PURCHASES (BOGUS) FROM THE GUPTA CONCERNS WOULD HAV E BEEN FOUND RECORDED IN THE APPELLANT'S BOOKS, WHICH HAS NOT BE EN FOUND TO HAVE BEEN DONE. THE OTHER CONTENTIONS RAISED BY THE APPE LLANT REGARDING BILLS RAISED FOR KHAR OUTLET SHOWN BY SHRI GUPTA, W HEREAS THEY DO NOT HAVE ANY OUTLET AT KHAR, THAT ALL PURCHASES ARE MADE ONLY FROM THE CHURCHGATE OUTLET, HAVE ALSO NOT BEEN REFUTED B Y THE ASSESSING OFFICER. THE ADDITION MADE WHOLLY ON THE BASIS ITA 7324/M/11 4 OF THE STATEMENT MADE DURING THE SURVEY AND CONFIRM ED SUBSEQUENTLY, WITHOUT ANY SUPPORTING EVIDENCE EITHE R BY WAY OF CORRESPONDING ENTRIES OF PURCHASES FROM THE GUPTA- CONCERNS IN THE BOOKS OF THE APPELLANT, OR BY WAY O F PAYMENTS, OR ANY OTHER EVIDENCE IS NOT SUSTAINABLE. IN VIEW OF T HE FACTS AVAILABLE, THE ADDITION MADE BY THE ASSESSING OFFICER IS DELET ED. 4. WE HAVE CAREFULLY GONE THROUGH THE FINDINGS GIVE N BY THE LD. CIT(A) TO THE EFFECT THAT DURING THE COURSE OF REAS SESSMENT PROCEEDINGS U/S 147 R.W.S. 143(3) OF THE ACT, THE A.O. HAS EXAM INED THE ASSESSEES BOOKS BUT COULD NOT POINT OUT ANY ENTRY IN ASSESSEE S BOOKS WHEREBY IT CAN BE SHOWN THAT THE ASSESSEE HAD BOOKED ANY PURCH ASES FROM ANY OF THE CONCERNS OF THE GUPTAS. UNDER THESE CIRCUMSTANC ES, THE LD. CIT(A) OBSERVED THAT HAD THE ASSESSEE OBTAINED ANY ACCOMMO DATION BILLS AND BOOKED BOGUS PURCHASES, THE SAME SHOULD HAVE BEEN F OUND RECORDED IN THE ASSESSEES BOOKS WHICH WAS NOT ACTUALLY FOUND. SINCE A.O. COULD NOT POINT OUT ANY ENTRY OF PURCHASES ALLEGED TO BE BOGU S PURCHASE IN THE BOOKS OF ASSESSEE DURING SCRUTINY ASSESSMENT PROCEE DINGS, THERE WAS NO JUSTIFICATION FOR MAKING ANY ADDITION MERELY ON THE STATEMENT OF SUPPLIER OF BOGUS BILLS. THE DETAILED FINDINGS RECO RDED BY THE LD. CIT(A) AT PARA 2.3 OF HIS APPELLATE ORDER HAS NOT BEEN CON TROVERTED. ACCORDINGLY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF LD. CIT(A) WHICH RESULTED INTO DELETION OF ADDITION MADE ON ACCOUNT OF BOGUS PURCHASES. 5 . IN THE RESULT, APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COU RT ON 21 ST JANUARY, 2015 !' # $% &! ' 21-01-2015 ( ) SD/- SD/- (SANJAY GARG) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 21-01-2015 [ ITA 7324/M/11 5 .;../ RK , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. < () / THE CIT(A) 23,, MUMBAI 4. < / CIT 12, MUMBAI 5. ?@( ;;AB , AB , $ 5 / DR, ITAT, MUMBAI A BENCH 6. (DE F / GUARD FILE. ' / BY ORDER, ? ; //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 5 / ITAT, MUMBAI