The ITO, Ward-9(4), Surat V. M/s. Suryanarayan Silk Mills Pvt.Ltd., Surat

ITA 930/AHD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8744 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 01-08-2017
• Assessment Year: 2004-2005
• Appeal Filed On: 04-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR VARMA
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained investment; Accommodation entries; Assessment record

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA NO. 930/AHD/2013 / ASSESSMENT YEAR: 2004-05 INCOME-TAX OFFICER, WARD 9 (4), SURAT VS. M/S. SURYANARYAN SILK MILLS, S. NO.352, T.P. SCHEME, GANDHI COLONY, A.K. ROAD, SURAT- 395006 PAN : AAQFS 4159 J / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI SUMIT KUMAR VARMA, SR DR ASSESSEE BY : SHRI M.K. PATEL, AR ' / DATE OF HEARING : 01/08/2017 / DATE OF PRONOUNCEMENT: 02/08/2017 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL AGAINS T THE ORDER OF THE LD. CIT(A)-V, SURAT DATED 18.01.2013 PASSED FOR ASS ESSMENT YEAR 2004-05. 2. THOUGH THE REVENUE HAS TAKEN FOUR GROUNDS OF APP EAL, BUT ITS GRIEVANCE REVOLVES AROUND SINGLE ISSUE WHEREBY IT H AS PLEADED THAT LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.74, 52,210/- WHICH WAS ADDED BY THE ASSESSING OFFICER ON THE GROUND THAT T HE ASSESSEE HAS MADE UNEXPLAINED INVESTMENT IN STOCK. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 29.10.2004 DECLARING TOTAL INCOME AT RS. NIL. THE INVESTIGATION WING, SURAT HAS CARRIED OUT THE INVESTIGATION PERTA INING TO A TAX EVASION ITA NO. 930/AHD/2013 ITO VS. SURYANARYAN SILK MILLS FOR AY: 2004-05 2 PETITION (TEP) AGAINST JUGAL M. BIYANI. A REPORT O F THAT INVESTIGATION WAS SENT TO THE ASSESSING OFFICER AND ON THE BASIS OF T HAT HE REOPENED THE ASSESSMENT AND ISSUED A NOTICE ON 30.03.2011. FROM THE REPORT, IT CAME TO THE NOTICE OF THE ASSESSING OFFICER THAT JUGAL M. B IYANI WAS INVOLVED IN PROVIDING ACCOMMODATION ENTRIES IN HIS BOOKS. HE H AS MENTIONED NAME OF SURYANARAYAN SILK MILLS FROM WHOM HE HAS STATED TO HAVE BEEN MADE PURCHASES. THE ASSESSEE DID NOT RECORD ANY SALES C ORRESPONDING TO SUCH PURCHASES. HENCE, ON THE BASIS OF COPY OF LEDGER A CCOUNT COLLECTED FROM JUGAL M. BIYANI, THE ASSESSING OFFICER HARBOURED A BELIEF THAT STOCK TO THIS EXTENT WAS POSSESSED BY THE ASSESSEE, WHICH WAS NOT SHOWN IN THE BOOKS. ACCORDINGLY HE MADE AN ADDITION OF RS.74,52,210/-. 4. ON APPEAL, LD. CIT(A) HAS DELETED THIS ADDITION BY OBSERVING AS UNDER:- 6.2 THE GROUNDS OF APPEAL- GROUND NO.2 PERTAINS TO ERRONEOUS ADDITION OF RS. 74,52,210/- ON ACCOUNT UNEXPLAINED INVESTMENT I N STOCK. ON THE PERUSAL OF THE DETAILS, IT IS OBSERVED THAT THE ASSESSING O FFICER RE-OPENED THE ASSESSMENT PROCEEDINGS ON THE BASIS OF THE ENQUIRY REPORT FROM THE INVESTIGATION WING. THE APPELLANT HAD CONTENDED THA T HE HAS NO RELATIONSHIP WITH SHRI JUGAL M BIYANI AND HIS CONCERNS NAMELY M/ S KHUSHI AND M/S MUSKAN AND HAS NOT MADE ANY TRANSACTION WITH THESE CONCERNS DURING THE RELEVANT FINANCIAL YEAR. IT WAS ALSO CONTENDED THAT THE ASSESSING OFFICER DID NOT GIVE ANY OPPORTUNITY TO CROSS EXAMINATION SHRI JUGAL M BIYANI REGARDING THE CLAIM OF THE PURCHASE OF GOODS FROM T HE APPELLANT. THE APPELLANT SUBMITTED THAT THE ADDITION HAS BEEN MADE WITHOUT ANY BASIS AND EVIDENCE SOLELY RELYING ON THE SUBMISSIONS OF THE T HIRD PARTY. 6.2.1 DURING THE COURSE APPELLATE PROCEEDINGS, THE ASSESSING OFFICER WAS DIRECTED VIDE THIS OFFICE LETTER DATED 19.11.2012 T O SEND THE COPY OF THE DOCUMENTS FOUND ON THE PREMISES OF THIRD PARTY WHIC H THE BASIS OF MAKING THE ADDITION. THE ASSESSING OFFICER VIDE HIS LETTER DATED 03.12.2012 SENT A COPY OF THE DOCUMENT ON THE BASIS OF WHICH ADDITION HAS BEEN MADE. THE DOCUMENTS SENT BY THE ASSESSING OFFICER IS A REPORT DATED 28.03.2011 OF THE ADIT, INVESTIGATION WING, SURAT. ON THE PERUSAL OF THE REPORT, IT IS FOUND THAT THE ADIT, INVESTIGATION WING, HAS GIVEN A FIND ING THAT SHRI JUGAL BIYANI IS IN THE BUSINESS OF BOGUS BILLING AND HAS SUGGESTED THE ITA NO. 930/AHD/2013 ITO VS. SURYANARYAN SILK MILLS FOR AY: 2004-05 3 EXAMINATION OF THE PURCHASERS FROM WHOM THE CONCERN S OF SHRI JUGAL M BIYANI HAD SHOWN HIS STOCK IN TRADE TO BE PURCHASED . THE REPORT OF THE INVESTIGATION WING DID NOT HAVE NEITHER DETAILS OF PAYMENTS MADE BY JUGAL BIYANI TOWARDS THE PURCHASES CLAIMED TO HAVE BEEN M ADE FROM THE APPELLANT, NOR ANY DETAILS SUCH BILLS, VOUCHERS, BANK STATEMEN T, ETC PERTAINING TO THE TRANSACTIONS. THE ASSESSING OFFICER HAS ALSO MADE N O EFFORTS TO OBTAIN THE COPY OF THE BILLS/VOUCHERS, BANK STATEMENT ETC. FRO M SHRI JUGAL M BIYANI DURING THE ASSESSMENT PROCEEDINGS. THE CLAIM OF SHR I JUGAL M BIYANI IN HIS STATEMENT ON OATH BEFORE THE INVESTIGATION WING REGARDING THE PURCHASE OF STOCK WORTH RS. 74,52,210/- FROM THE APPELLANT DURI NG THE RELEVANT A.Y. IS A SELF SERVING EVIDENCE IN ABSENCE OF ANY SUPPORTING DOCUMENTS. NO EFFORT HAVE BEEN MADE BY THE AO TO FIND OUT THE GENUINENESS OF THE TRANSACTION SUCH AS DETAILS OF PAYMENTS MADE BY THE CONCERNS NAMELY M/S KHUSHI AND M/S MUSKAN OF SHRI JUGAL M BIYANI TO THE APPELLANT FOR THE SUPPLY OF GOODS, BILLS, INVOICE, DETAILS OF TRANSPORTATION OF GOODS, DETAIL S OF PACKAGING ETC. TO SHOW THAT THE GOODS WERE PURCHASED AND TRANSFERRED TO TH E CONCERNS OF SHRI JUGAL M BIYANI BY THE APPELLANT. 6.2.2 THE ASSESSING OFFICER HAS SOLELY RELIED ON TH E SUBMISSIONS MADE BY SHRI JUGAL M BIYANI BEFORE THE INVESTIGATION WING. IN ASSESSMENT ORDER IN PARA-6, THE ASSESSING OFFICER HAS MENTIONED THAT TH E ASSESSEE WAS ALSO GRANTED AN OPPORTUNITY TO CROSS EXAMINE SHRI JUGAL M BIYANI ON 23.12.2011 AT 03.30 PM, BUT NO ONE ATTENDED THE HEARING NOR AN Y APPLICATION FOR ADJOURNMENT WAS RECEIVED. IT IS FURTHER MENTIONED, THAT SHRI JUGAL M BIYANI ATTENDED THE OFFICE ON 29.12.2011 AND FURNISHED A S IGNED LEDGER COPY GIVING DETAILS OF TRANSACTIONS MADE WITH THE APPELLANT WHI CH WAS ADMITTED BEFORE THE ADIT, INVESTIGATION WING. THE ASSESSMENT RECORD WAS CALLED FOR AND EXAMINED. 6.2.3 ON THE PERUSAL OF THE ORDER SHEET, IT IS FOUN D THAT THE FINDINGS OF THE ASSESSING OFFICER ARE FACTUALLY INCORRECT. CONTRARY TO THE FINDING OF THE ASSESSING OFFICER, THE ORDER SHEET (PAGE-3) DATED 2 3.12.2011 MENTIONS THE FOLLOWING 'ON THE REQUEST OF THE 'A' TO CROSS EXAMI NE TO JUGAL M BIYANI, A SUMMON WAS ISSUED ON 22.12.2011 TO JUGAL M BIYANI T O APPEAR BEFORE UNDERSIGNED TODAY AT 03.30PM BEFORE ME, THE CA OF T HE A' SHRI P.M. JAGASHETH ALONGWITH THE ACCOUNTANT OF THE 'A' ATTEN DED THE HEARING. BUT INSPITE OF WAITING TILL 04.50 PM SHRI JUGAL BIYANI DID NOT APPEAR IN PERSON HENCE CROSS EXAMINATION WAS NOT POSSIBLE. 6.2.4 ON PAGE-4 OF THE ORDER SHEET, ANOTHER ENTRY D ATED 23.12.2011 MENTIONS THAT THE COUNSEL OF SHRI JUGAL M BIYANI SOUGHT ADJO URNMENT FOR 26.12.2011. AGAIN ON 26.12.2011 AS PER ORDER SHEET ENTRY, THE C OUNSEL OF SHRI JUGAL M BIYANI SOUGHT ADJOURNMENT FOR 28.12.2011. ON 28.12. 2011 AS PER ORDER SHEET ITA NO. 930/AHD/2013 ITO VS. SURYANARYAN SILK MILLS FOR AY: 2004-05 4 ENTRY, NO ONE ATTENDED. ON 29.12.2011, THE ORDER SH EET ENTRY MENTIONS THAT SHRI JUGAL M BIYANI ATTENDED AND SUBMITTED A COPY O F THE LEDGER A/C. 6.2.5 THE ABOVE DETAILS SHOW THAT THE FINDINGS BY T HE ASSESSING OFFICER ARE INCORRECT AND ERRONEOUS ON FACTS. THE ASSESSING OFF ICER NEVER PROVIDED THE APPELLANT THE OPPORTUNITY TO CROSS EXAMINE AS MENTI ONED IN THE ASSESSMENT ORDER. THE COPY OF LEDGER A/C FILED BY SHRI JUGAL M BIYANI IS BEING RE- PRODUCED AS A SCANNED DOCUMENTS:- 6.2.6 THE LEDGER A/C ON WHICH THE ASSESSING OFFICER HAS RELIED UPON IS A SELF SERVING PIECE OF PAPER AS IT DOES NOT CONTAIN ANY D ETAILS SUCH AS PAYMENTS BY CHEQUE, ANY CORRESPONDENCE BETWEEN APPELLANT AND JU GAL BIYANI FOR SUPPLY OF GOODS, ANY DOCUMENT HAVING DETAILS OF TRANSACTIONS DULY SIGNED BY THE APPELLANT, ANY CHEQUE/ DRAFT PAYMENT MADE IN THE AC COUNT OF THE APPELLANT WHICH COULD POINT OR CAN BE LINKED THAT THE TRANSAC TION BETWEEN THE APPELLANT AND M/S KHUSHI HAS TAKEN PLACE. 6.2.7 IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, IT IS EVIDENT THAT THE ASSESSING OFFICER HAS FAILED MISERABLY TO BRING ON RECORD ANY EVIDENCE OR PROOF TO SHOW THAT THE TRANSACTIONS AS CLAIMED BY S HRI JUGAL M BIYANI CONCERN M/S KHUSHI AND THE APPELLANT HAD ACTUALLY T AKEN PLACE. IN ABSENCE OF ANY EVIDENCE IN THE BOOKS, OF ACCOUNTS OF THE APPEL LANT REGARDING ANY SALE MADE TO M/S KHUSHI, THE EVIDENCES RELIED UPON BY TH E APPELLANT ARE ONLY SELF SERVING EVIDENCES CLAIMED BY THE THIRD PARTY WITH W HOM THE APPELLANT HAS NO RELATIONSHIP. HENCE, IT IS IMPOSSIBLE TO UPHOLD THE ADDITION MADE BY THE ASSESSING OFFICER WITHOUT ANY APPLICATION OF MIND A ND PROPER INVESTIGATIONS CONDUCTED. IN VIEW OF THE ABOVE, THE GROUND OF APPE AL IS ALLOWED. 5. BEFORE US, LD. DEPARTMENTAL REPRESENTATIVE RELIE D UPON THE STATEMENT OF FACTS FILED BY THE REVENUE. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A). 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE SOLITARY EVIDENCE POSSESSED BY THE ASSESSING OFFICER FOR CHARGING THE ASSESSEE WITH THE LIABILITY TO EXP LAIN THE ALLEGED INVESTMENT IN STOCK IS A PHOTOCOPY OF LEDGER ACCOUNT OBTAINED FROM JUGAL M. BIYANI BY THE INVESTIGATION WING. THE ASSESSEE HAS POINTED O UT THAT IT HAS NO CONCERN ITA NO. 930/AHD/2013 ITO VS. SURYANARYAN SILK MILLS FOR AY: 2004-05 5 WITH JUGAL M. BIYANI AND HE WAS NOT SUBJECTED TO CR OSS-EXAMINATION. THE ASSESSEE CANNOT BE HELD LIABLE FOR THE ENTRIES FOUN D IN THE BOOKS OF A THIRD PERSON. THERE IS NO CORROBORATIVE EVIDENCE POSSESS ED BY THE ASSESSING OFFICER TO SHOW THAT THE ASSESSEE HAS UNEXPLAINED S TOCK OF THIS MUCH VALUE. AFTER GOING THROUGH THE ORDER OF THE LD. CIT(A), WE DO NOT FIND ANY ERROR IN IT. HENCE, THE APPEAL OF THE REVENUE IS DEVOID OF ANY MERIT AND ACCORDINGLY DISMISSED. ORDER PRONOUNCED IN THE COURT ON 2 ND AUGUST, 2017 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 02/08/2017 BIJU T., SR.PS ' '() *) / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! # / CONCERNED CIT 4. # ( ) / THE CIT(A) 5. & ! , ! , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD