Dilipkumar R. Tibrewal, Mumbai V. Income-tax Officer, Malegaon

ITA 769/PUN/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3904 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 11 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 31-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Principle of natural justice; Period of limitation; Tax effect; Time period of passing order; Set aside
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE BEFORE SHRI D. KARUNAKARA RAO, A CCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, J UDICIAL MEMBER . / I TA NO. 769 /PUN/20 1 7 / ASSESSMENT YEAR : 20 1 0 - 11 MR. DILIPKUMAR T TIBREWAL, B - 503, MAYFAIR MARVEL, AHIMSA MARG, OPP. CHINCHOLI BUNDER ROAD, MALAD (WEST), MUMBAI 400064 PAN: A BDPT6171B ....... / APPELLANT / V/S. THE INCOME - TAX OFFICER , WARD 1, MALEGAON, NASHIK / RESPONDENT A SSESSEE BY : SHRI BHAUMIK GODA REVENUE BY : SHRI DEEPAK GARG / DATE OF HEARING : 0 2 .0 3 .2020 / DATE OF PRONOUNCEMENT : 03 .0 3 .2020 / ORDER PER D. KARUNAKARA RAO , A M : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 1 , NASHIK , DATED 2 1 . 0 2 .2017 FOR THE ASSESSMENT YEAR 20 1 0 - 1 1 . 2 ITA NO. 769 /PUN/20 1 7 DILIPKUMAR R TIBREWAL 2. THE GROUNDS RAISED BY ASSESSEE ARE EXTRACTED AS UNDER: - 1. THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ADDITION OF RS.10,40,90 , 948/ - ON ACCOUNT OF NON GENUINE OF PURCHASES MADE BY T HE LEARNED ASSESSIN G OFFICER. THE SAME ADDITION OF RS.10,40 , 90,948/ - MAY BE DELETED. 2. ON T HE FACTS AND CIRCUMSTANCES OF THE C A SE AND IN LAW, LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN REJECTING THE GROUND RAISED BY YOUR APPELLANT THAT THE ASSESSMENT IS NOT PROPERLY REOPENED U/S 147 OF THE INCOME TAX AC T , 196 1 AND ERRED IN REJECTING THE OBJECTION RAISED FOR ISSUANCE OF NOTICE U/S 148 . HENCE NOTICE U/S 148 MAY BE SET ASIDE AS THE INITIATION OF REASSESSMENT P ROCEEDINGS IS AB INITIO VOID. 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN REJECTING THE GROUND THAT THE L EARNED INCOME TAX OFFICER HAS NOT GIVEN OPPORTUNITY T O CROSS EXAMINE THE PARTY BASED ON W HOSE STATEMENT THE CASE WAS REOPENED. THIS I S AGAINST THE PRINCIPAL OF NATURAL JUSTICE. HENCE THE ORDER MAY BE CANCELLED. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ASSESSMENT ORDER DEMAND NOTICE SERVED ON 04.04.2015 IS HATRED BY LIMITATION A S THE SAME WAS NOT ISSUED AND SERVED P RIOR TO 31 - 03 - 2015 I.E. BEFORE THE LIMITATION PERIOD. THE ASSESSMENT ORDER BE ANNULLED. 3 . AT THE OUTSET, LD. COUNSEL MENTIONED THAT THE PRESENT APPEAL REVOLVES AROUND THE ADDITION ON ACCOUNT OF BOGUS PURCHASES AND THE SAME IS BROUGHT TO TAX BY REOPENING THE ASSESSMENT U/S 148 OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) . E VENTUALLY, THE ASSESSING OFFICER MADE THE ENTIRE SUCH PURCHASES AS INCOME OF THE ASSESSEE. FURTHER, THE LD. COUNSEL SUBMITTED THAT , WITHOUT GIVING OPPORTUNITY OF CROSS - EXAMINING THE CONCERNED PEOPLE, THE RE - ASSESSMENT WAS COMPLETED BY MAKING ADDITIONS. REFERRING TO VARIOUS DECISIONS RELATING TO CROSS - EXAMINATION ISSUES , THE PUNE TRIBUNAL DECISION IN THE CASE OF M/S. CHHABI ELECTRICAL S PVT. LTD. AND OTHERS VS. DCIT IN ITA NO.795/PUN/2014, FOR A.Y. 2010 - 11, ORDER DATED 28.04.2017 , DINESH RATHI VS. DCIT (GROUP CASES) IN ITA NO.975/PUN/2018 & ORS., ORDER DATED 26.09.2019 , THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR .CIT VS. M/S. MOHOMMAD HAJI ADAM & CO. (GROUP OF CASES) & ORS., 3 ITA NO. 769 /PUN/20 1 7 DILIPKUMAR R TIBREWAL JUDGMENT DATED 11.02.2019 , THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. M/S. ODEON BUILDERS PVT. LTD. IN REVIEW PETITION (C) DIARY NO.22394 OF 2019 IN CIVIL APPEAL NOS.9604 - 960 5 OF 2018, DATED 21.08.2019 , ETC. , LD. COUNSEL SUBMITTED THAT MATTER REQUIRES RE - ADJUDICATION BY THE LOWER AUTHORITIES. 4. THE LD. DR SUBMITTED THAT , ON SIMILAR FACTS VARIOUS CASES , THE ISSUES STAND REMANDED BACK TO THE FILE OF ASSESSING OFFICER FOR ADJU DICATING THE ISSUES DE NOVO. 5. AFTER C ONSIDERING THE ABOVE FACTS AND SUBMISSION OF THE ASSESSEE , WE FIND THAT THE ABOVE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR.CIT VS. M/S. MOHOMMAD HAJI ADAM & CO. (SUPRA) READ WITH THE ORDER OF PUNE BENCH TRIBUNAL IN THE CASE OF DINESH RATHI VS. DCIT (SUPRA) AND M/S. CHHABI ELECTRICALS PVT. LTD. AND OTHERS VS. DCIT (SUPRA) HAS A BEARING ON THIS CASE. THE RELEVANT PARA IS 74 OF THE SAID ORDER AND THE SAME IS EXTRACTED AS UNDER: - 74. HAVING GONE THROUGH THE RELEVANT MATERIAL ON RECORD, WE FIND THAT THE ISSUE INVOLVED IN THIS APPEAL IS DIRECTLY COVERED BY THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF PR.CIT VS. MOHOMMAD HAJI ADAM & CO. (SUPRA) IN WHICH THE DIRECTION HAS BEEN GIV EN TO MAKE ADDITION ONLY AT THE DIFFERENTIAL RATE OF PROFIT BETWEEN THE GENUINE PURCHASES AND BOGUS PURCHASES. IN THE GIVEN CIRCUMSTANCES, WE SET - ASIDE THE IMPUGNED ORDER AND REMIT THE MATTER TO THE FILE OF THE AO FOR DECIDING THIS ISSUE IN CONFORMITY WITH THE DISCUSSION MADE ABOVE. HOWEVER, IT IS MADE CLEAR THAT IF SUBSEQUENTLY THE REVENUES APPEAL IS RECALLED ON FILING OF MISCELLANEOUS APPLICATION BY THE DEPARTMENT ON ACCOUNT OF TAX EFFECT BEING MORE THAN THE AMOUNT OF RS.50.00 LAKH, THE ASSESSEE WILL BE AT LIBERTY TO TAKE REMEDIAL ACTION FOR RECALLING OF THE ORDER IN HIS CASE AS WELL. 6. IN VIEW OF ABOVE DISCUSSION, WE ARE OF THE OPINION THAT THE ISSUE INVOLVED IN THE PRESENT APPEAL REQUIRES TO BE REMANDED BACK TO THE FILE OF 4 ITA NO. 769 /PUN/20 1 7 DILIPKUMAR R TIBREWAL ASSESSING OFFICER FOR RE - AD JUDICATION. WE ORDER ACCORDINGLY. THE ASSESSING OFFICER SHALL GIVE REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE WHILE DECIDING THE ISSUE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES . 7 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD MARCH , 2020. SD/ - SD/ - S.S. VISWANETHRA RAVI D. KARUNAKARA RAO JUDICIAL MEMBER ACCOUNTANT MEMBER / PUNE; / DATED : 3 RD M ARCH , 2020. GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT 3. THE CIT (APPEALS) - 1, NASHIK . 4. THE PR. CIT - 1, NASHIK. 5. , , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // // TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT, PUNE