M/S ABHISHEK EXPORTS, MUMBAI V. ITO 19 (1)(1), MUMBAI

ITA 7824/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 6930 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 19-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY J SETHI
• Keywords: Reopening of assessment; Bogus purchase; Principle of natural justice; Accommodation entries
• Section: 143(3); 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI , BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 7824 / /20 19 (. . 2007-08 ) ITA NO.7824/MUM/2019 (A.Y.2007-08) M/S ABHISHEK EXPORTS, 2 PRATIK ARCADE, SOPARIWALA ESTATE, TATA ROAD NO.2, OPERA HOUSE, MUMBAI-400004 /VS. ITO-19(1)(1), AAYAKAR BHAVAN, NEW MARINE LINES, M.K. ROAD, MUMBAI-400020. ( / APPELLANT ) ( / RESPONDENT ) PAN NO. AAEFA6855H / APPELLANT BY : NONE / RESPONDENT BY : SH. SANJAY J. SETHI / DATE OF HEARING : 03/06/2021 / DATE OF PRONOUNCEMENT : 10/08/2021 / ORDER PER VIKAS AWASTHY, J.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST AN EX-PARTE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-30, MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 26.09.2019 FOR THE ASSESSMENT YEARS (AY) 2007-08. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RECORDS ARE: THE ASSESSEE IS ENGAGED IN TRADING/EXPORT OF DIAMONDS. THE ASSESSMENT FOR AY 2007-08 IN THE CASE OF ASSESSEE WAS RE-OPENED ON THE GROUND THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION ENTRIES AMOUNTING TO RS. 29,99,973/- FROM DAKSH DIAMONDS, A CONCERN BELONGING TO BHANWARLAL JAIN GROUP. DURING ASSESSMENT 2 . 7824 / /20 19 (. .2007-08 ) ITA NO. 7824/MUM/2019 (AY-2007-08) PROCEEDINGS, THE ASSESSEE FAILED TO FURNISH DOCUMENTS TO DISCHARGE ITS ONUS IN PROVING GENUINENESS OF THE DEALER AND THE PURCHASES MADE FROM THE SAID DEALER. CONSEQUENTLY, THE AO MADE ADDITION OF THE ENTIRE ALLEGED BOGUS PURCHASES. THE ASSESSEE FILED APPEAL AGAINST THE ASSESSMENT ORDER DATED 27.03.2015 PASSED UNDER SECTION 143(3) READ WITH SECTION 147 OF THE ACT, CHALLENGING VALIDITY OF RE-OPENING OF ASSESSMENT AND THE ADDITION ON MERITS. THE CIT(A) IN AN EX-PARTE PROCEEDINGS DISMISSED THE APPEAL OF ASSESSEE IN TOTO. 3. NOW, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL ASSAILING THE IMPUGNED ORDER ON THREE COUNTS: (1) EX-PARTE ORDER PASSED WITHOUT AFFORDING OPPORTUNITY OF HEARING, (2) RE-OPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT, AND (3) ADDITION CONFIRMED ON ACCOUNT OF BOGUS PURCHASES. 4. A PERUSAL OF THE IMPUGNED ORDER REVEALS THAT THE CIT(A) HAS ISSUED NOTICES TO THE ASSESSEE ON 19.01.2017, 15.02.2017, 02.07.2017 AND 13.09.2017. HOWEVER, IT IS NOT EMANATING FROM THE ORDER WHETHER THESE NOTICES WERE DULY SERVED ON THE ASSESSEE OR NOT. MERE ISSUE OF NOTICES IS NOT SUFFICIENT TO COMPLY WITH THE PROCEDURE, IT IS ALSO TO BE ASCERTAINED THAT THE NOTICES ARE DULY SERVED ON THE ASSESSEE. ADVERSE ORDER PASSED AT THE BACK OF ASSESSEE IS AGAINST THE PRINCIPLE OF NATURAL JUSTICE. IT IS A WELL-SETTLED RULE THAT A FAIR OPPORTUNITY OF HEARING SHOULD BE AFFORDED TO THE PARTIES TO THE LIS. 5. TAKING INTO CONSIDERATION ENTIRETY OF FACTS, THE IMPUGNED ORDER IS SET- ASIDE AND THE APPEAL OF ASSESSEE IS RESTORED BACK TO THE FILE OF CIT(A) FOR DECIDING THE SAME AFRESH ON MERITS AFTER AFFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE/APPELLANT. 3 . 7824 / /20 19 (. .2007-08 ) ITA NO. 7824/MUM/2019 (AY-2007-08) 6. THE ASSESSEE/APPELLANT IS DIRECTED TO APPEAR BEFORE THE CIT(A) UPON SERVICE OF NOTICE AND CO-OPERATE IN FIRST APPELLATE PROCEEDINGS. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON TUESDAY , THE 10 TH DAY OF AUGUST, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER /MUMBAI, /DATED: 10/08/2021 SK, PS COPY OF THE ORDER FORWARDED TO : 1. /THE APPELLANT , 2. / THE RESPONDENT. 3. ( )/ THE CIT(A)- 4. CIT 5. , . . ., /DR, ITAT, MUMBAI 6. [ /GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI