B.M.Industries, Howrah V. I.T.O.,Ward-46(2), Kolkata

ITA 83/KOL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9928 (ITAT-KOLKATA)
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 20-01-2020
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYANTA KHANRA
• Keywords: Bogus purchase; Business income; Application of stay
• Section: 69C; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B(SMC), BENCH KOLKATA BEFORE SHRI P.M. JAGTAP, V.P & SHRI S. S. GODARA, JM S.A NO.27/KOL/2020 ( [ [ / ASSESSMENT YEAR: 2011-12) B.M. INDUSTRIES 126/2, MAHENDRA BHATTACHARYA ROAD, KOLKATA 711014. VS. ITO, WARD-46(2), KOLKATA ./ ./PAN/GIR NO.: AAFFB7101E (APPELLANT) .. (RESPONDENT) & ./I.T.A NO.83/KOL/2020 ( [ [ / ASSESSMENT YEAR: 2011-12) B.M. INDUSTRIES 126/2, MAHENDRA BHATTACHARYA ROAD, KOLKATA 711014. VS. ITO, WARD-46(2), KOLKATA ./ ./PAN/GIR NO.: AAFFB7101E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SOUMITRA CHOUDHURY, ADVOCATE RESPONDENT BY : SHRI JAYANTA KHANRA, JCIT, SR. DR / DATE OF HEARING : 13/03/2020 /DATE OF PRONOUNCEMENT : 19/06/2020 / O R D E R PER SHRI S. S. GODARA: THIS ASSESSEES STAY APPLICATION FILED U/S 254(2) OF THE INCOME TAX ACT 1961 SEEKS TO RESTRAIN THE DEPARTMENT FROM EFFECTING RECOVERY OF THE OUTSTANDING DEMAND TO THE TUNE OF RS.14,82,360/- DURING THE PENDENCY OF ITS MAIN APPEAL ITA NO.83/KOL/2020. S.A NO.27/KOL/2020 & I.T.A NO.83/KOL/2020 B.M. INDUSTRIES ASSESSMENT YEAR: 2011-12 PAGE | 2 HEARD BOTH THE PARTIES. CASE FILE PERUSED. WITH THE CONSENT OF BOTH PARTIES, WE TAKE UP THE FOREGOING MAIN APPEAL ITSELF FOR ADJUDICATION. 2. IT TRANSPIRES AT THE OUTSET THAT THE ASSESSING OFFICER HAD FRAMED HIS REASSESSMENT; EX PARTE, AGAINST THE ASSESSEE WHILST DISALLOWING/ADDING ITS ALLEGED BOGUS PURCHASES OF RS.21,69,165/- FROM FOUR PARTIES NAMELY M/S DURGA SALES, M/S RAJPUTANA VANIJYA PVT. LTD., M/S SINGH MERCANTILE PVT. LTD. & M/S VIWADHARA SUPPLY SYNDICATE INVOLVING SUMS OF RS.4,26,666/-, RS.6,70,951/-, RS.5,93,034/- & RS.4,78,514/-; RESPECTIVELY ON THE GROUND THAT THEIR AUTHORIZED PERSON ONE SRI SANJIW KUMAR SINGH HAD DEPOSED IN THE DEPARTMENTS SEARCH CARRIED OUT ON 05.07.2016 THAT HE HAD BEEN PROVIDING BOGUS PURCHASE BILLS IN THE NAME OF ALL FOUR ENTITIES FOR DERIVING COMMISSION INCOME. THIS MADE THE ASSESSING OFFICER TO DISALLOW/ADD ASSESSEES FOREGOING PURCHASE SUMS AS BOGUS U/S 69C OF THE ACT FOLLOWED BY COMMISSION @2% U/S 69C OF THE ACT. THE CIT(A)S EX PARTE LOWER APPELLATE ORDER HAS CONFIRMED THE SAME. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL SUBMISSIONS. LEARNED COUNSEL VEHEMENTLY CONTENDS THAT BOTH THE LOWER AUTHORITIES HAVE ERRED IN LAW AND ON FACTS IN DISALLOWING ASSESSEES GENUINE PURCHASES FROM THE FOUR ABOVE-STATED ENTITIES AS BOGUS ALONGWITH COMMISSION THEREUPON @2% DESPITE THE FACT THAT THE ASSESSEES CORRESPONDING SALES HAVE BEEN TAKEN AS GENUINE. AND ALSO ALL THE FOUR ALLEGED ENTRY PROVIDER ENTITIES ALSO STAND ASSESSED QUA THE PURCHASE AMOUNTS UNDER BUSINESS HEAD. THE REVENUES CASE, ON THE OTHER HAND, IS THAT THE ASSESSING OFFICER AS WELL AS THE CIT(A) HAVE RIGHTLY DISALLOWED THE ASSESSEES PURCHASES. WE FIND NO REASON TO SUSTAIN THE REVENUES STAND IN ENTIRETY. AS ALREADY INDICATED AT THE ASSESSEES BEHEST, IT HAS COME ON RECORD THAT ITS INCOME FROM CORRESPONDING SALES HAS ALREADY BEEN ACCEPTED DURING THE COURSE OF ASSESSMENT AS CORRECT. MEANING THEREBY THE IMPUGNED PURCHASES SOUGHT TO BE TREATED AS BOGUS HAVE BEEN ASSESSED AS BUSINESS INCOME IN CASE OF ALL FOUR PARTIES AS WELL AS IN ASSESSEES CASE. COUPLED WITH THIS, WE ALSO FIND THAT NEITHER THE ASSESSING OFFICER NOR THE CIT(A) S.A NO.27/KOL/2020 & I.T.A NO.83/KOL/2020 B.M. INDUSTRIES ASSESSMENT YEAR: 2011-12 PAGE | 3 HAVE CONFRONTED THE ASSESSEE WITH COPY OF THE SEARCH STATEMENT OF MR. SINGH RIGHT FROM THE BEGINNING ALSO HAS NOWHERE INDICATED ALL PURCHASE SUMS IN ITS CASE AS BOGUS. WE THEREFORE ARE OF THE VIEW THAT ALL THESE FACTUAL ASPECT REQUIRES AFRESH VERIFICATION FROM THE ASSESSING OFFICERS END. WE ORDER ACCORDINGLY. THE ASSESSEES SOLE SUBSTANTIVE GROUND AS WELL AS ITS MAIN APPEAL ITA NO.83/KOL/2020 IS ACCEPTED FOR STATISTICAL PURPOSES AND STAY APPLICATION SA NO.27/KOL/2020 IS RENDERED INFRUCTUOUS. 4. BEFORE PARTING, IT IS NOTED THAT THE ORDER IS BEING PRONOUNCED AFTER NINETY (90) DAYS OF HEARING. HOWEVER, TAKING NOTE OF THE EXTRAORDINARY SITUATION IN THE LIGHT OF THE COVID-19 PANDEMIC AND LOCKDOWN, THE PERIOD OF LOCKDOWN DAYS NEED TO BE EXCLUDED. FOR COMING TO SUCH A CONCLUSION, WE RELY UPON THE DECISION OF THE CO-ORDINATE BENCH OF THE MUMBAI TRIBUNAL IN THE CASE OF DCIT VS. JSW LIMITED IN ITA NO. 6264/MUM/2018 & 6103/MUM/2018, ASSESSMENT YEAR 2013-14, ORDER DT. 14 TH MAY, 2020. 5. THIS ASSESSEES SA NO.27/KOL/2020 IS DISMISSED AS INFRUCTUOUS & ITA NO.83/KOL/2020 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19.06.2020. SD/- ( P. M. JAGTAP ) SD/- (S. S. GODARA) VICE-PRESIDENT JUDICIAL MEMBER /KOLKATA; / DATE: 19/06/2020 RS S.A NO.27/KOL/2020 & I.T.A NO.83/KOL/2020 B.M. INDUSTRIES ASSESSMENT YEAR: 2011-12 PAGE | 4 / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. THE APPELLANT- B.M. INDUSTRIES 2. THE RESPONDENT- ITO, WARD-46(2), KOLKATA 3. ( ) / THE CIT(A), KOLKATA [SENT THROUGH EMAIL] 4. / CIT 5. , , / DR, ITAT, KOLKATA [SENT THROUGH EMAIL] 6. [ / GUARD FILE.