DWARKA GEMS LTD., Jaipur V. ACIT, Jaipur

ITA 87/JPR/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2062 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 25-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Bogus purchase; Principle of natural justice

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR , U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 87/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2008-09 M/S DWARKA GEMS LIMITED, G-1-5 &6, EPIP, SITAPURA INDUSTRIAL AREA, JAIPUR. CUKE VS. THE ACIT, CIRCLE-7, JAIPUR. PAN NO.: AAACD8548H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A.VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 05/09/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 12/09/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS APPEAL FILED BY THE ASSESSEE EMANATES FROM TH E ORDER OF THE LD. CIT(A), JAIPUR DATED 06/10/2016 FOR A.Y. 2008-0 9 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE ACTION OF LD. AO IN IMPOSING PENALTY OF 92,700/- U/S 271(1)(C) OF THE INCOME TAX ACT, ARBITRARILY. 1.2. THAT THE LD. CIT(A) HAS FURTHER ERRED IN UPHOL DING THE PENALTY IMPOSED BY THE A.O. WITHOUT ESTABLISHING ANY MALAFIDE INTENTION OF THE ASSESSEE ITA 87/JP/2016_ M/S DWARKA GEMS LTD. VS. ACIT, JAIPUR 2 AND BY IGNORING THE FACT THAT EVERY SINGLE DETAIL A S ASKED FOR WAS PROVIDED BY THE ASSESSEE AND NOTHING HAS BEEN ESTABLISHED AS CONCEALED NOR ANY INACCURATE PARTICULARS HAS BEEN PROVEN TO HAVE BEEN FURNISHED. THEREFORE, PASSING OF THE IMPUGNED ORDER IS AGAINST THE PRINCIPAL OF NATURAL JUSTICE, HENCE SAME DESERVES TO BE HELD BAD IN LAW. 2. THE ONLY ISSUE INVOLVED IN APPEAL IS AGAINST SUS TAINING THE PENALTY LEVIED U/S 271(1)(C) OF THE I.T.ACT OF RS. 92,700/- . 3. AT THE OUTSET OF HEARING, LD. AR SUBMITTED THAT HONBLE RAJASTHAN HIGH COURT WHILE DECIDING THE VARIOUS APPEALS OF TH E ASSESSEE HAS ALSO DECIDED ITA NO. 264/2016 OF THE ASSESSEE IN WHICH Q UANTUM ISSUE WAS INVOLVED AND HONBLE HIGH COURT HAS RESTORED THE IS SUE TO THE ASSESSING OFFICER. THE RELEVANT PORTION OF HONBLE ITAT IS RE PRODUCED AS UNDER: APPEAL NO. 266/2016, IS ADMITTED ON FOLLOWING QUES TIONS AND WITH THE CONSENT OF THE PARTIES, AND THE SAME IS DECIDED TODAY ITSELF. (I) WHETHER IN THE FACTS AND CIRCUMSTANCES OF CASE , THE ITAT WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO APPLY 15% NET PROFIT RATE ON UNVERIFIABLE BOGUS PURCHASES OF RS. 12715686/- IGNORING THE FACTS THAT THE QUANTUM OF S TATED PURCHASES WAS NOT ESTABLISHED AND THAT ON INQUIRIES THE ALLEGED SELLERS WERE FOUND TO BE MERE ENTRY PROVIDE RS AND NON-EXISTENT. 5. COUNSEL FOR THE APPELLANT HAS RELIED UPON THE DECISION OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, JAIPUR-II, JAIPUR VS. M/S ADITYA GEMS, K-10 FATEH T IBA, ADARSH NAGAR, JAIPUR IN D.B. INCOME TAX APPEAL NO. ITA 87/JP/2016_ M/S DWARKA GEMS LTD. VS. ACIT, JAIPUR 3 234/2008, DECIDED ON 2 ND NOVEMBER, 2016 WHEREIN IT HAS BEEN HELD AS UNDER: 3. CONSIDERING THE LAW DECLARED BY THE SUPREME COU RT IN THE CASE OF VIJAY PROTEINS LTD. VS. COMMISSIONER OF INCOME TAX, SPECIAL LEAVE TO APPEAL NO. 8956/2015 DECIDED ON 06.04.2015 WHEREBY THE SUPREME COURT HAS DISMISSED THE SLP AND CONFIRMED THE ORDER DATED 09.12.2014 PASSED BY THE GUJARAT HIGH COURT AND OTHER DECISIONS OF THE HIGH COURT OF GUJARAT IN TH E CASE OF SANJAY OILCAKE INDUSTRIES VS. COMMISSIONER OF INCOME TAX (2009) 316 ITR 274 (GUJ) AND N.K. INDUSTRIES LTD. VS. DY. C.I.T., TAX APPEAL NO. 240/ 2003 DECIDED ON 20.06.2016, THE PARTIES ARE BOUND BY THE PRINCIPLE OF LAW PRONOUNCED IN THE AFORESAID THREE JUDGMENTS. 4. WE REMIT BACK THE CASE TO THE ASSESSING OFFICER FOR DECIDING AFRESH ON THE FACTUAL MATRIX. THE AUTHORIT Y WILL ACCEPT THE LAW BUT THE TRANSACTION WHETHER IT IS GENUINE OR NOT WILL BE VERIFIED BY THE ASSESSING OF FICER ON THE BASIS OF THE AFORESAID THREE JUDGMENTS. THE ISSUES ARE ANSWERED ACCORDINGLY. THE APPEAL IS ACCORDINGLY DISPOSED OF. 6. TAKING INTO CONSIDERATION THE ABOVE, THE MATTERS ARE REMITTED BACK TO THE AO FOR RECONSIDERATION. IT WIL L NOT BE OUT OF PLACE TO MENTION THAT OBSERVATIONS WHICH ARE MAD E BY THIS COURT IN THE ABOVE JUDGMENT AND THE OTHER JUDGMENT WHICH SOUGHT TO BE RELIED UPON BY THE ASSESSEE WILL BE CO NSIDERED ON MERITS. THE AO WHOLE CONSIDERING THE MATTER WILL GIVE BENEFIT OF THE LAW DECLARED BY THIS COURT AND ALSO GRANT OPPORTUNITY FOR CROSS-EXAMINATION OF THE WITNESSES TO THE ASSESSEE. 4. ON THE OTHER HAND, LD. D/R SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. ITA 87/JP/2016_ M/S DWARKA GEMS LTD. VS. ACIT, JAIPUR 4 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDER OF HONBLE HIGH COURT. IN VIEW OF THE DECISION OF HONBLE HIGH COUR T, THIS ISSUE ALSO NEEDS TO BE RESTORED BACK TO AO. THE MATTER REMIT BACK TO AO FOR FRESH DECISION. THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12/09/2017. SD/- SD/- DQY HKKJR HKKXPAN (KUL BHARAT) (BHAGCHAND) U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ TK;IQJ TK;IQJ TK;IQJ@ @@ @ JAIPUR FNUKAD@ DATED:- 12/09/2017 *GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S DWARKA GEMS LIMITED, JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- ACIT,CIRCLE-7, JAIPUR 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 87/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR