Shri Kishor A. Sewani, Vadodara V. Income Tax Officer, Ward-5(1), Baroda

ITA 836/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8051 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 04-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Bogus purchase

Judgement Text

, ,LK ,LK,LK ,LK- -- -,E ,E,E ,E- -- -LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD L LL LOZJH OZJH OZJH OZJH OLHE OLHE OLHE OLHE VGEN VGEN VGEN VGEN] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; , ] YS[KK LNL; ,OA OAOA OA EGKOHJ EGKOHJ EGKOHJ EGKOHJ IZLKN IZLKN IZLKN IZLKN] U; ] U;] U; ] U;KF KFKF KF;D ;D;D ;D LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA LNL; DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 836/AHD/2016 ( / ASSESSMENT YEAR : 2011-12) SHRI KISHOR A. SEWANI, OPP: YAMUNA MILL, DABHOI ROAD, VADODARA. / VS. THE ITO, WARD 5(1), 5 TH FLOOR, AAYKAR BHAVAN RACE COURSE CIRCLE, BARODA 390 007. ./ ./ PAN/GIR NO. : AJFPS 4662 N ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI M. K. PATEL, A.R. / RESPONDENT BY : SHRI UMA SHANKAR PRASAD, SR. D.R. / DATE OF HEARING 07 /06/2018 !'# / DATE OF PRONOUNCEMENT 28 /06 /2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-1, VADODARA [CIT(A) IN SHORT] VIDE APPEAL NO.CAB- 1/258/2015-16 DATED 12/01/2016 ARISING IN THE PENALTY ORDER PASSED UNDER S.271(1)(C) OF THE INCOME TAX ACT, 196 1 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 24/09/2014 RELEVAN T TO ASSESSMENT YEAR (AY) 2011-12. ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 2 - 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT ON FACTS AND IN LAW THE LEARNED CIT(A) HAS GRIEVOUSLY ERRED IN CONFIRMING THE LEVY OF PENALTY U/S. 271(1) (C) OF THE ACT OF RS.2,73,567/-. 2. THAT ON FACTS, IN LAW, AND ON EVIDENCE ON REC ORD, IT OUGHT TO HAVE BEEN HELD THAT THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WITH IN THE MEANING OF SECTION 271(1)(C) OF THE ACT. 3. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND ANY GROUND OF APPEAL. 3. THE ASSESSEE IN ALL THE GROUNDS OF APPEAL HAS CH ALLENGED THE IMPOSITION OF A PENALTY FOR RS. 2,73,567/- U/S 271( 1)(C) OF THE ACT. 4. THE BRIEFLY STATED FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF COAL AS COAL MERCHAN T UNDER THE NAME AND STYLE OF M/S KISHOR AISHIRAN SEWANI. THE ASSESS EE IN ITS BALANCE SHEET AS ON 31 ST MARCH 2011 HAS SHOWN CERTAIN OUTSTANDING SUNDRY CREDITORS FOR PURCHASES AMOUNTING TO RS. 820,652/- ONLY. BUT THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS FAILED T O FURNISH COMPLETE PRESENT ADDRESSES OF SUCH PARTIES/ CREDITO RS REPRESENTING THE OUTSTANDING AMOUNT OF RS. 820,652/- ONLY. HOWEV ER, IT WAS EXPLAINED THAT THE COAL WAS PURCHASED FROM LOCAL PE RSONS WHO ARE DOING THE BUSINESS OF COAL MAKING FROM JUNGLE WOOD AND FOR THAT PURPOSE, GRAM PANCHAYAT AUTHORIZED THEM. THESE PERS ONS WERE DOING BUSINESS ON A SMALL SCALE AND THEREFORE NOT KEEPING/MAINTAINING BOOKS OF ACCOUNTS. VOUCHERS AND WEIGHT SLIP SUPPORT ALL THE PURCHASES FROM SUCH PARTIES. TO CHE CK THE QUALITY OF THE GOODS, THE ASSESSEE USED TO MAKE PAYMENT AFTER MAKING SALES OF THE GOODS PURCHASED FROM THEM. THEREFORE, THE CREDI T BALANCE AT THE END OF THE YEAR WAS REFLECTED IN THE BALANCE SHEET. ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 3 - HOWEVER, THE ASSESSEE IN ITS LETTER DATED 03-09-201 4 OFFERED THE AMOUNT OUTSTANDING IN RESPECT OF SUCH CREDITORS FOR RS.820,652/- TO THE TAX. IT WAS EXPLAINED THAT THE AMOUNT WAS OFFER ED TO TAX TO AVOID THE LITIGATION WITH THE DEPARTMENT AND FOR THE PEAC E OF MIND. AS SUCH THERE WAS NO CONCEALED INCOME OR INACCURATE PARTICU LARS OF INCOME WERE FURNISHED. HOWEVER, THE AO DURING THE ASSESSMENT PROCEEDINGS O BSERVED CERTAIN FACTS AS DETAILED UNDER: I. THE ASSESSEE FAILED TO FURNISH THE PRESENT ADDRESS OF THE SUPPLIER/CREDITORS WHICH WERE OUTSTANDING FOR A LON G TIME AS ON 31 ST MARCH 2011. THERE WAS ALSO NO NAME OF THE SUNDRY CREDITORS IN THE LETTER ISSUED BY THE GRAM P ANCHAYAT. II. THE SUPPLIERS OF COAL TO THE ASSESSEE ARE LABORERS, AND THEREFORE THEY WOULD EXPECT INSTANT PAYMENT FROM TH E ASSESSEE. III. THE QUALITY OF THE COAL CAN BE JUDGED AT THE TIME O F PURCHASE ONLY AND NOT AT THE TIME OF SUBSEQUENT SALE. THERE WAS NO JUSTIFICATION TO MAKE THE PAYMENT AFTER THE SALE OF COAL BY THE ASSESSEE TO THE SUPPLIERS. IN VIEW OF ABOVE, THE AO DISALLOWED A SUM OF RS.820 ,652/- ON ACCOUNT OF SUNDRY BOGUS CREDITORS AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE AO DURING THE ASSESSMENT PROCEEDI NGS INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME. THE AO DURING THE ASSESSMENT PROCEEDINGS ISSUED NOT ICE U/S 274 R.W.S. 271(1)(C) OF THE ACT VIDE DATED 18-3-2014 FO R LEVYING THE PENALTY. THE ASSESSEE IN COMPLIANCE TO IT SUBMITTED THAT HE AGREED TO THE ADDITION OF SUNDRY CREDITORS FOR RS.820,542/- T O AVOID THE LITIGATION WITH THE DEPARTMENT AND BUY THE PEACE OF MIND. AS SUCH, NO ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 4 - ALLEGATION CAN BE FRAMED AGAINST THE ASSESSEE EITHE R FOR CONCEALMENT OF THE INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. HOWEVER, THE AO DISREGARDED THE CONTENTION OF THE A SSESSEE BY OBSERVING THAT THE ASSESSEE FAILED TO PROVE THE GEN UINENESS OF THE SUNDRY CREDITORS OUTSTANDING AS ON ITS BALANCE SHEE T ON 31 ST MARCH 2011. THEREFORE, THE SAME WAS OFFERED TO TAX. AS PE R EXPLANATION 1 TO SECTION 271(C) OF THE ACT, IF THERE IS A VARIATION BETWEEN THE RETURN OF INCOME AND ASSESSED INCOME, THEN IT SHALL BE DEEMED THAT THE ASSESSEE HAS FURNISHED THE INACCURATE PARTICULARS O F INCOME. ACCORDINGLY, THE AO LEVIED A MINIMUM PENALTY OF RS. 2,73,567/- BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED. 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LEARN ED CIT(A). ASSESSEE BEFORE THE LEARNED CIT(A) SUBMITTED THAT T HE ADDITION WAS AGREED TO AVOID THE LITIGATION AND BUY THE PEACE OF MIND. THEREFORE, IT CANNOT BE ALLEGED THAT THE ASSESSEE HAS CONCEALED T HE PARTICULARS OF INCOME AND FURNISHED INACCURATE PARTICULARS OF INCO ME. HOWEVER, ALL THE VOUCHERS AND WEIGHT SLIP WERE DULY ISSUED IN SU PPORT OF PURCHASES CLAIMED BY THE ASSESSEE FOR RS.820,652/-. THE PURCHASES FROM THE LOCAL PERSONS WERE DULY AUTHORIZED IN CERT IFICATE OF GRAM PANCHAYAT. HOWEVER, LEARNED CIT(A) DISREGARDED THE CONTENTION OF THE ASSESSEE AND CONFIRMED THE ORDER OF AO BY OBSER VING AS UNDER: 4.3. I HAVE CONSIDERED THE APPELLANT'S SUBMISSIONS AND THE AO'S OBSERVATIONS. AFTER THE DECISION OF THE HON'BLE SUP REME COURT OF INDIA IN THE CASE OF [2013] 38 TAXMANN.COM 448 (SC), MAK DATA (P.) LTD., THE APPELLANT'S CONTENTIONS THAT SINCE THAT ADDITIO N WAS MADE ON AGREED BASIS HENCE NO PENALTY SHOULD BE IMPOSED IS NOT ACCEPTABLE. THE OTHER EXPLANATION OF THE APPELLANT IS THAT HE'S PROCURING SUCH' MATERIALS FROM SMALL FARMERS LIVING IN VILLAGES AND THESE PERSONS ARE NOT ASKING FOR PAYMENT IMMEDIATELY. SUCH CLAIM HAS NOT BEEN SUBSTANTIATED BY ANY EVIDENCE. IT IS AGAINST HUMAN PROBABILITY THAT ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 5 - SMALL FARMERS WILL NOT ASK FOR THE PAYMENT IMMEDIAT ELY BUT WILL KEEP IT PENDING FOR YEARS TOGETHER. MOREOVER THE CORRECT ADDRESSES OF SUCH PERSONS WERE ALSO NOT SUBMITTED BY THE APPELLANT. H ENCE SUCH EXPLANATION IS ALSO NOT BONA FIDE. THUS IT IS HELD THAT THE APPELLANT HAS FAILED TO SUBSTANTIATE THE EXPLANATION FILED BY HIM REGARDING THE ADDITIONS MADE IN THE ASSESSMENT ORDER. SINCE HE FA ILED TO SUBSTANTIATE THESE PURCHASES, HENCE HE AGREED FOR T HE ADDITION ALSO. HENCE IT IS HELD THAT THE AO HAS RIGHTLY LEVIED PEN ALTY UNDER SECTION 271(1)(C) IN THIS CASE. BEING AGGRIEVED BY ORDER OF LEARNED CIT(A) ASSESSEE IS IN APPEAL BEFORE US. THE LEARNED AR BEFORE US FILED A PAPER BOOK WHICH I S RUNNING FROM PAGES FROM 1 TO 36 AND SUBMITTED THAT THE GP RATIO IN THE YEAR UNDER CONSIDERATION HAS IMPROVED IN COMPARISON TO THE LAS T YEAR AS EVIDENT FROM THE ORDER OF AO. THE RELEVANT EXTRACT OF THE A OS ORDER IS REPRODUCED BELOW: 2. THE ASSESSEE IS ENGAGED IN THE TRADING OF COAL AND SHOWN TURNOVER OF RS.158,40,775/- AND GROSS PROFIT OF RS. 13,82,545/- @8.72%. IN IMMEDIATELY PRECEEDING YEAR, ASSESSEE HAS SHOWN TURNOVER OF RS.212,76,812/- AND GROSS PROFIT OF RS. 16,10,240/- @ 7.56%. THE LEARNED AR BEFORE US FURTHER SUBMITTED THAT IF THE PURCHASES ARE HELD AS BOGUS, THEN THE CORRESPONDING SALES SHOULD ALSO BE TREATED AS BOGUS AND ACCORDINGLY, NO ADDITION ON ACCOUNT OF BO GUS PURCHASES CAN BE CALLED FOR. THE CASE OF THE REVENUE IS NOT T HAT ASSESSEE HAS SUPPRESSED THE SALES OF COAL. THUS THE CREDITORS AR ISING OUT OF THE PURCHASES CANNOT BE TREATED AS BOGUS MERELY ON THE BASIS THAT THE ASSESSEE AGREED TO IT. MOREOVER, THE GP RATIO DURIN G THE YEAR HAS ALSO IMPROVED WHICH STRENGTHENS THE GENUINENESS OF PURCH ASES AND SO THE CREDITORS. ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 6 - THE SUNDRY CREDITORS SHOWN OUTSTANDING AS ON 31 ST MARCH 2011 WERE PAID IN THE SUBSEQUENT YEAR. THE LEARNED AR IN SUPP ORT OF ASSESSEES CLAIM DREW OUR ATTENTION ON THE SUBMISSION MADE BEF ORE THE AO THAT THE OUTSTANDING CREDITORS AS ON 31 ST MARCH 2011 HAVE BEEN PAID IN THE NEXT YEAR. THE SUBMISSION OF THE ASSESSEE BEFOR E THE AO IS PLACED ON PAGE 22 OF THE PAPER BOOK WHICH IS REPRODUCED AS UNDER: I HAVE ENCLOSED ALONG WITH LETTER DATED 11-05-2014 STATEMENT SHOWING DETAILS OF PURCHASES PAYMENTS MADE IN ASSTT . YEAR 2011-12 AND BALANCE OUTSTANDING OUT OF PURCHASE DURING THE YEAR AS ON 31-03- 2011 AND PAYMENT MADE IN ASST. YEAR 2012-13 TO THES E PARTIES. YOU WILL FIND THAT MOSTLY PAYMENT IS MADE IN NEXT Y EAR I.E. IN ASST. YEAR 2012-13 TO THE PARTIES AS SHOWN IN STATEMENT A ND SMALL AMOUNT IN CASE OF SOME PARTIES REMAINING WHICH IS PAID IN FURTHER NEXT YEAR. THE LEARNED AR ALSO DREW OUR ATTENTION ON THE CHART DEPICTING THE PAYMENT MADE TO THE VARIOUS SUNDRY CREDITORS IN THE SUBSEQUENT YEAR WHICH IS PLACED ON PAGE 9 OF THE PAPER BOOK. THE WEIGH BRIDGE SLIP SUPPORTS ALL THE PURCHASES CL AIMED BY THE ASSESSEE. THE LEARNED AR IN SUPPORT OF ASSESSEES C LAIM HAS DRAWN OUT ATTENTION ON PAGE 10 AND 11 OF THE PAPER BOOK, WHERE THE COPIES OF THE WEIGHBRIDGE SLIP WERE PLACED ON A SAMPLE BAS IS. THE LEARNED AR ALSO SUBMITTED THAT THE SUNDRY OUTST ANDING CREDITORS ARE ARISING FROM THE PURCHASES MADE BY THE ASSESSEE AND THE LIABILITY ON ACCOUNT OF PURCHASES HAS NOT CEASED TO EXIST IN THE BOOKS OF ACCOUNTS. THEREFORE, NO DISALLOWANCE OF SUNDRY OUTS TANDING CREDITORS COULD HAVE BEEN MADE DURING THE ASSESSMENT PROCEEDI NGS. THE LEARNED AR IN SUPPORT OF HIS CLAIM RELIED ON THE OR DER OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN 322 ITR 158. THE RELEVANT EXTRACT OF TH E JUDGMENT IS REPRODUCED BELOW: ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 7 - THE WORD 'PARTICULARS' MUST MEAN THE DETAILS SUPPL IED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT A CCORDING TO TRUTH OR ERRONEOUS. IN THE INSTANT CASE, THERE WAS NO FINDIN G THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND T O BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271( 1)( C ). A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LA W BY ITSELF WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS REGA RDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANN OT AMOUNT TO THE INACCURATE PARTICULARS. [PARA 9] THE REVENUE CONTENDED THAT SINCE THE ASSESSEE HAD C LAIMED EXCESSIVE DEDUCTIONS KNOWING THAT THEY WERE INCORRECT, IT AMO UNTED TO CONCEALMENT OF INCOME. IT WAS ARGUED THAT THE FALSE HOOD IN ACCOUNTS CAN TAKE EITHER OF THE TWO FORMS: ( I ) AN ITEM OF RECEIPT MAY BE SUPPRESSED FRAUDULENTLY; ( II ) AN ITEM OF EXPENDITURE MAY BE FALSELY (OR IN AN EXAGGERATED AMOUNT) CLAIMED, AND BOTH TYPES A TTEMPT TO REDUCE THE TAXABLE INCOME AND, THEREFORE, BOTH TYPES AMOUN T TO CONCEALMENT OF PARTICULARS OF ONE'S INCOME AS WELL AS FURNISHIN G OF INACCURATE PARTICULARS OF INCOME. SUCH CONTENTION COULD NOT BE ACCEPTED AS THE ASSESSEE HAD FURNISHED ALL THE DETAILS OF ITS EXPEN DITURE AS WELL AS INCOME IN ITS RETURN, WHICH DETAILS, IN THEMSELVES, WERE NOT FOUND TO BE INACCURATE NOR COULD BE VIEWED AS THE CONCEALMENT O F INCOME ON ITS PART. IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CL AIM IN THE RETURN OR NOT. MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EX PENDITURE, WHICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT, BY ITSELF, WOULD NOT ATTRACT THE PENALTY UNDER SECTION 271(1)( C ). IF THE CONTENTION OF THE REVENUE WAS ACCEPTED, THEN IN CAS E OF EVERY RETURN WHERE THE CLAIM MADE WAS NOT ACCEPTED BY THE ASSESS ING OFFICER FOR ANY REASON, THE ASSESSEE WOULD INVITE PENALTY UNDER SECTION 271(1)( C ). THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATU RE. [PARA 10] ON THE OTHER HAND, THE LEARNED DR SUBMITTED THAT IN TERNAL VOUCHERS/ SELF-MADE VOUCHERS CLAIMED THE PURCHASES. THERE WAS NO BILL PRODUCED BY THE ASSESSEE FROM THE PARTIES EXCEPT WE IGH SLIP. THERE WAS NO JUSTIFICATION FURNISHED BY THE ASSESSE E FOR HOLDING THE PAYMENT OF THE SUNDRY OUTSTANDING CREDITORS. ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 8 - THE LEARNED DR ALSO CLAIMED THAT ALL THE PAYMENTS W ERE MADE TO THE SUNDRY CREDITORS IN CASH. THEREFORE, THE SAME CANNO T BE VERIFIED FOR THE EXTERNAL DOCUMENTARY EVIDENCE. THE LEARNED DR I N SUPPORT OF HIS STATEMENT RELIED ON THE JUDGMENT OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF MAK DATA PVT. LTD. VS. CIT REPORTED IN 358 ITR 593. THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF AU THORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE, THE ASSES SEE HAS SHOWN SUNDRY CREDITORS OF RS. 8,20,652/- AS ON 31 ST MARCH, 2011. THE ASSESSEE FAILED TO FURNISH THE PRESENT CURRENT ADDR ESS OF THE PARTIES TO THE AO DURING THE ASSESSMENT PROCEEDINGS. THEREF ORE, THE SAME WAS TREATED BY THE AO AS BOGUS. ACCORDINGLY, THE AD DITION WAS MADE TO THE TOTAL INCOME OF THE ASSESSEE. HOWEVER, THE ASSESSEE DURING THE ASSESSMENT PROCEED INGS CLAIMED TO HAVE ACCEPTED THE ADDITION MADE BY THE AO TO AVO ID THE LITIGATION, ARRIVE AT THE AMICABLE SOLUTION WITH THE DEPARTMENT AND BUY THE PEACE OF MIND. THEREFORE, IT CANNOT BE HELD AS THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCE ALED THE PARTICULARS OF INCOME. HOWEVER, THE VIEW TAKEN BY T HE AO WAS SUBSEQUENTLY CONFIRMED BY THE LEARNED CIT(A). NOW THE ISSUE BEFORE US ARISES FOR ADJUDICATION SO AS TOGETHER WHETHER THE PENALTY NEEDS TO BE SUSTAINED IN THE HA NDS OF THE ASSESSEE IN THE GIVEN FACTS AND CIRCUMSTANCES. IT I S AN UNDISPUTED FACT THAT ASSESSMENT AND PENALTY PROCEEDINGS ARE INDEPEN DENT AND DIFFERENT FROM EACH OTHER. IF THERE IS ANY DIFFEREN CE BETWEEN THE ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 9 - INCOMES DECLARED BY THE ASSESSEE OR INCOME ASSESSED DURING THE PROCEEDINGS CANNOT RESULT IN THE CONCEALMENT OF INC OME/ FURNISHING INACCURATE PARTICULARS OF INCOME. THE ASSESSEE HAS DULY DISCLOSED THE SUNDRY CREDITOR S IN ITS BOOKS OF ACCOUNTS, WHICH WERE NOT VERIFIED DURING THE ASSESS MENT PROCEEDINGS FOR WANT OF PRESENT ADDRESS. BUT THAT D OES NOT MEAN THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOM E OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE IMPUGNED SUND RY CREDITORS ARE ARISING FROM THE PURCHASES WHICH HAVE NOT BEEN DIST URBED BY THE LOWER AUTHORITIES. IT IMPLIES THAT THE LOWER AUTHOR ITIES HAVE ACCEPTED THE PURCHASES BUT CORRESPONDING CREDITORS HAVE BEEN ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR WANT OF THE ADDRES S. IN OUR CONSIDERED VIEW THE ADDITION ON ACCOUNT OF SUNDRY C REDITORS ARISING OUT OF PURCHASES CANNOT BE ADDED WITHOUT DISTURBING THE CORRESPONDING PURCHASES. FOR EXAMPLE, THE ASSESSEE HAS SHOWN PURCHASES FROM SHREE AMARATBHAI MNABHAI DURING THE YEAR UNDER CONSIDERAT ION FOR RS. 90,865.00 AND CLAIMED TO HAVE MADE THE PAYMENT FOR RS. 30000.00 DURING THE YEAR LEAVING THE OUTSTANDING BALANCE OF RS. 60,865.00 AS ON 31.3.2011. HOWEVER, THE AO MADE THE ADDITION OF AN OUTSTANDING AMOUNT OF RS. 60,865.00, MEANING THEREBY THE PURCHA SES WORTH RS. 30,000.00 FROM SHREE AMARATBHAI MNABHAI WERE ACCEPT ED. IT IMPLIES THAT THE GENUINENESS OF THE PARTY NAMELY SHREE AMAR ATBHAI MNABHAI FOR THE PURCHASES TO THE EXTENT OF RS. 30,000.00 WA S ACCEPTED. THUS THE ADDITION HAS BEEN MADE BY THE LOWER AUTHORITIES ON ACCOUNT OF SUNDRY OUTSTANDING CREDITORS WITHOUT QUESTIONING TH E CORRESPONDING PURCHASES. HENCE WE ARE OF THE VIEW THE ADDITION IN THE QUANTUM ASSESSMENT HAS BEEN WRONGLY MADE AND SO AS THE PENA LTY. ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 10 - WE ALSO NOTE THAT THE FACTS IN THE CASE OF MAK DATA WERE DIFFERENT FROM THE PRESENT CASE. THE ADDITION IN CASE OF MAK DATA WAS AGREED IN CONNECTION WITH THE SHARE CAPITAL TRANSACTION WH EREAS IN THE FACTS THE ISSUE RELATES TO THE SUNDRY CREDITORS ARISING O UT OF THE PURCHASES WHICH WERE DEBITED IN THE PROFIT & LOSS ACCOUNT AS REVENUE EXPENSES. THUS WE ARE RELUCTANT TO RELY ON THE CASE OF MAK DA TA AS DISCUSSED ABOVE. NONE OF LOWER AUTHORITIES HAVE BEEN BROUGHT ON RECO RD THAT THERE WAS A DELIBERATE ACT ON THE PARTS OF THE ASSESSEE S UGGESTING THAT THE ASSESSEE HAS CLAIMED BOGUS PURCHASES EITHER BY CONC EALING THE INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. IN VIEW OF ABOVE WE REVERSE THE ORDER OF THE AUTHOR ITIES BELOW. THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28/06/2018 SD/- SD/- EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; YKS [KK LNL; U;KF;D LNL; YKS [KK LNL; U;KF;D LNL; YKS [KK LNL; U;KF;D LNL; YKS [KK LNL; (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 28/06/2018 PRITI YADAV, SR.PS ITA NO.836/AHD/2016 SHRI KISHOR A. SEWANI.VS. ITO ASST.YEAR 2011-12 - 11 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-1, VADODARA. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 20/06/2018(DICTATION PAD 6 PAGES ATTACHED AT THE END OF THIS APPEAL- FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 21/06/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S28/06/2018 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER