Binoy Poddar, Kolkata V. ITO, Ward - 33(1), Kolkata, Kolkata

ITA 831/KOL/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5910 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 26-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D C MONDAL
• Assessee Lawyers: MANISH TIWARI
• Keywords: Reopening of assessment; Bogus purchase; Search and seizure; Accommodation entries
• Section: 143(3); 147

Judgement Text

ITA NO.831/KOL/2018 BINAY PODDAR A.Y.2007-08 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC K OLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM] ITA NO.831/KOL/2018 ASSESSMENT YEAR : 2007-08 BINAY PODDAR -VERSUS- I.T.O., WARD-33(1), KOLKATA KOLKATA (PAN: AFOPP 0372 H) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI MANISH TIWARI, FCA FOR THE RESPONDENT: SHRI D.C. MONDAL, CIT(DR) DATE OF HEARING : 18.07.2018. DATE OF PRONOUNCEMENT : 25.07.2018. ORDER PER J.SUDHAKAR REDDY, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-9, KOLKATA DATED 20 .02.2018 FOR A.Y. 2007-08 PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (ACT). 2. THE ASSESSEE IS AN INDIVIDUAL AND IS IN THE BUS INESS OF JEWELLERY. HE FILED RETURN OF INCOME ON 29.10.2007 DECLARING TOTAL INCOME OF R S.2,19,580/-. THE ASSESSMENTS WERE REOPENED U/S 147 OF THE ACT. LATER AN ORDER U/ S 143(3) R.W.S.147 WAS PASSED DETERMINING THE TOTAL INCOME OF RS.5,25,407/-. AGGR IEVED THE ASSESEE CARRIED THE MATTER IN APPEAL WITHOUT SUCCESS. FURTHER AGGRIEVED THE ASSESSEE IS BEFORE ME. 3. AFTER HEARING THE RIVAL CONTENTIONS, THE ISSUE OF VALIDITY OF REOPENING OF ASSESSMENTS U/S 147 OF THE ACT, AS WELL AS THE GROU NDS ON MERITS ARE CONSIDERED AND I HOLD AS FOLLOWS :- 4. THE REASONS FOR REOPENING OF THE ASSESSMENT READ AS FOLLOWS :- 'RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 W AS FILED BY THE ASSESSEE ON 29-10-2007 DECLARING INCOME OF RS.2,19,580/- WHICH WAS PROCESSED U/S. 143(1) ITA NO.831/KOL/2018 BINAY PODDAR A.Y.2007-08 2 OF THE INCOME-TAX ACT, 1961 ON 27-03-2009 AT THE RE TURNED INCOME. INFORMATION WAS RECEIVED FROM THE DGIT {INV.], MUMBAI VIDE HIS OFFICE LETTER NO, DGIT (INV)/INFORMATION/ DIAMOND/ 2013-14 DATED 14-03-201 4 THROUGH DGIT (INV.), KOLKATA THAT SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN THE CASE OF SHRI RAJENDRA JAIN GROUP, SHRI SANJAY CHOUDHARY GROUP AN D SHRI DHARMICHAND GROUP ON 03-10-2013 AND IT WAS INFORMED THAT THESE GROUPS WERE INDULGING IN PROVIDING ACCOMMODATION ENTRIES IN THE NATURE OF BO GUS SALES AND UNSECURED LOANS. AS PER INFORMATION, M/ S. MUKUT JEWELS HAS T AKEN ACCOMMODATION ENTRY ON ACCOUNT OF BOGUS PURCHASE DURING THE FINANCIAL YEAR 2006-07 RELEVANT TO THE ASSESSMENT YEAR 2007-08 TO THE TUNE OF RS. 62,35, 9 25/-,.THEREFORE, I HAVE REASONS TO BELIEVE THAT INCOME TO THE TUNE OF RS. 6 2,35, 925/- OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-2008 HAS ESCAPED ASSESSMEN T WITHIN THE MEANING OF SECTION 147 OF THE INCOME-TAX ACT, 1961 ON ACCOUNT OF BOGUS PURCHASE.' 5. I FIND THAT THE REOPENING HAS BEEN MADE ON THE G ROUND THAT THE ASSESSEE HAD MADE A BOGUS PURCHASE DURING THE YEAR TO THE TUNE O F RS.62,35,925/-. NO ADDITION HAS BEEN IN THE FINAL RE-ASSESSMENT ORDER ON ACCOUNT OF BOGUS PURCHASES. THE AO ADDED 3% OF THE PURCHASE ON THE GROUND THAT, THE PURCHAS E BILL IN QUESTION MIGHT HAVE BEEN INFLATED. THE ASSESSEES CONTENTION IS THAT, WHEN N O ADDITION IS MADE ON THE GROUND OF RE-OPENING BASED ON WHICH THE ASSESSMENTS ARE REOPE NED, THEN RE-ASSESSMENT ORDER HAS TO BE QUASHED. RELIANCE WAS PLACED ON THE DECIS ION OF KOLKATA B BENCH OF THIS TRIBUNAL IN ITA NO.74/KOL/2012 ORDER DATED 22.05.20 15, WHEREIN THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS JET AIRWAYS (I) LTD (2011) 331 ITR 236 (BOM) AND THE JUDGMENT OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS SHR RAM SINGH (2008) 306 ITR 343(RAJ) WERE FOLLO WED. 6. ON MERITS IT WAS SUBMITTED THAT WHEN THE PURCHAS ES WERE ACCEPTED AS GENUINE AND NO ADDITION MADE, THE CONCLUSION THAT THE BILL WOULD HAVE BEEN INFLATED, CANNOT BE FACTUALLY SUSTAINED. THE LD. DEPARTMENTAL REPRESENT ATIVE RELIES ON THE ORDER OF THE AO. 7. ON A CONSPECTUS OF THE MATTER, I AM OF THE VIEW THAT INFERENCE DRAWN BY THE AO THAT THERE IS A POSSIBILITY OF THE ASSESSEE HAVING PROCURED INFLATED PURCHASE BILLS, IS BASED ON SURMISES AND CONJECTURES. THERE IS NO EVID ENCE IN SUPPORT OF THE SAME. HENCE THE ADDITION HAS TO BE DELETED. EVEN OTHERWI SE, AS NO ADDITION IS MADE ON THE GROUND OR ISSUE RECORDED IN THE REASONS FOR REOPEN ING BASED ON WHICH THE AO ITA NO.831/KOL/2018 BINAY PODDAR A.Y.2007-08 3 REOPENED THE ASSESSMENT, THE ASSESSMENT HAS TO BE Q UASHED IN VIEW OF THE DECISIONS OF THE JUDGEMENT OF HONBLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS JET AIRWAYS (I) LTD (SUPRA) AND THE JUDGMENT OF THE HONBLE RAJASTH AN HIGH COURT IN THE CASE OF CIT VS SHR RAM SINGH (SUPRA). IN VIEW OF THE ABOVE DISC USSION, I ALLOW THIS APPEAL OF THE ASSESSEE. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 25.07.2018. SD/- [ J.SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 25.07.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.BINAY PODDAR, 7G, EMBASSY APARTMENT, 4, SHAKESPEA RE SARANI, KOLKATA-700071. 2. I.T.O., WARD-33 (1), KOLKATA. 3. C.I.T.(A)- 9, KOLKATA 4. C.I.T-11, KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES