Smt. Pompa Sarkar, Kolkata V. ITO, Ward-52(1), Kolkata, Kolkata

ITA 99/KOL/2015

• Counselvise Citation: 9923514 RSA 2015
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 19-01-2015
• Court: TRIBUNAL
• Department Lawyers: ANIL KR
• Assessee Lawyers: A K TIBREWAL
• Keywords: Bogus purchase
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC, KOLKATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM] ITA NO.99/KOL/2015 ASSESSMENT YEAR : 2007-08 SMT. POMPA SARKAR -VERSUS- I.T.O., WARD-52(1) KOLKATA KOLKATA (PAN:AJOPS 0038 D) (APPELLANT ) (RESPONDENT) FOR THE APPELLANT : SHRI A.K.TIBREWAL, FCA FOR THE RESPONDENT : SHRI ANIL KR.PANDEY, ADDL.CI T DATE OF HEARING : 02.12.2015. DATE OF PRONOUNCEMENT : 09.12.2015. ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 13.11.2014 OF CIT(A)-XXXIII, KOLKATA RELATING TO A.Y.2007-08. 2. THE ONLY GROUND RAISED BY THE ASSESEE READS AS FOLLOWS :- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF CURRENT YEAR PURCHASE FROM FOUR PAR TIES AMOUNTING TO TOTAL RS.6,39,999/- WITH THE OBSERVATION AS BOGUS PURCHASE SINCE THE GE NUINENESS OF THE TRANSACTIONS REMAINS NOT ESTABLISHED. 3. THE ASSESSEE IS AN INDIVIDUAL. SHE IS THE PROPRI ETOR OF M/S. FIBREGLASS FABRICATORS (INDIA). THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING OF INSULATING MATERIALS NAMELY FIBRE GLASS SHEETS, TUBES ETC. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO ISSUED NOTICE U/.S 13 3(6) OF THE ACT TO THREE PARTIES FROM WHOM THE ASSESSEE MADE PURCHASES TOTALING RS.6 ,40,000/- DURING THE PREVIOUS YEAR. NOTICES WERE EITHER NOT SERVED OR NOT CLAIMED BY THREE PARTIES. THE DETAILS IN THIS REGARD ARE AS FOLLOWS :- ITA NO.99/KOL/2015 SMT.POMPA SARKAR A.YR.2007-08 2 SL.NO. NAME AND ADDRESS OF THE CREDITORS FOR GOODS OPENING BALANCE PURCHASE MADE DURING THE YEAR TOTAL REMARKS 1. PRIYA TRADING CO. 119,GREEN PARK,BLOCK- A, KOLKATA-700055 PAN:AAPPH4606N 98,705.49 2,11,855.00 3,10,560.49 POSTAL DEPARTMENT REPORTED AS NOT CLAIMED 2. BHAWANI MERCANTILES 24-B.P.DEY STREET SERAMPUR,DIST.HOOGHLY PAN:AMIPP3800H 57,444.03 1,62,137.20 2,19,581.23 POSTAL DEPARTMENT REPORTED AS NOT KNOWN 3. PRIYA INTERNATIONAL STATION ROAD, NEW BARRACKPUR, KOLKATA-700133 PAN:AEZPM3016R 98,192.00 1,12,632.80 2,10,824.80 ABSENCE OF PROPER ADDRESS 4. BIRENDRA INTERNATIONAL 40/4, STRAND ROAD, 2 ND FLOOR, KOLKATA-700001. PAN:ACVPJ4013F -- 1,53,375.00 1,53,375.00 ABSENCE OF PROPER ADDRESS TOTAL 6,40,000.00 THE ASSESSEE WAS CONFRONTED OF THE ENQUIRY MADE BY THE AO. THE ASSESSEE SUBMITTED BEFORE AO THAT HE HAD PURCHASED POLYSTER FROM PRIYA TRADING COMPANY WHICH WAS THE MAIN PRODUCT USED IN MANUFACTURING FIBRE GLASS. SHE GAVE THE DETAILS OF PAYMENTS MADE BY THE AFORESAID PARTY BY CHEQUES AND ALSO EST ABLISHED THAT THE CHEQUES WERE CLEARED IN THE NAME OF THE AFORESAID PARTY THROUGH BANK. THE ASSESSEE EXPRESSED HIS INABILITY TO TRACE THE WHEREABOUTS OF THE AFORESAID PARTY. AS FAR AS BHAWANI MERCANTILE IS CONCERNED THE ASSESSEE EXPLAINED THAT THE AFORES AID PARTY SUPPLIED WOVEN ROVING 400 WHICH WAS THE MAIN PRODUCT FOR MANUFACTURING OF FIBRE GLASS. THE ASSESSEE GAVE EVIDENCE OF PAYMENTS THROUGH CHEQUES TO THE AFORESA ID PARTY THROUGH BANKING CHANNELS AND ALSO EXPRESSED INABILITY TO GIVEN THE WHEREABOUTS OF THE PARTY AS THE TRANSACTIONS IN QUESTION HAD TAKEN PLACE MORE THAN A YEAR. AO WAS HOWEVER OF THE VIEW THAT EVEN THE DEPARTMENTAL INSPECTOR COULD NOT LOCATE THESE PARTIES AT THE ADDRESSES GIVEN BY THE ASSESSEE. AO ACCORDINGLY TRE ATED THE PURCHASES TO THE TUNE OF RS.6,40,000/- AS BOGUS AND ADDED THE SAME TO THE TO TAL INCOME OF THE ASSESSEE. ITA NO.99/KOL/2015 SMT.POMPA SARKAR A.YR.2007-08 3 4. ON APPEAL BY THE ASSESSEE CIT(A) CONFIRMED THE O RDER OF AO. 5. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIALS AVAILABLE ON RECORD. IT IS AN UNDISPUTED POSITION THAT PAYMENTS TO THE AFORESAID PARTIES WERE MADE BY A/C PAYEE CHEQUES AND ARE DULY ENCASHED BY THESE PARTIES IN THEIR NAMES. THE ASSESSEE HAS FILES COPIES OF BILLS OF PURCHASES FRO M THESE PARTIES. THE GROSS PROFIT AND NET PROFIT OF THE ASSESSEE FOR FOUR ASSESSMENT YEAR S ARE GIVEN BELOW :- ASSESSMENT YEARS PARTICULARS 2007-08 2008-09 2009-10 2010-11 GROSS PROFIT(A) 6,65,207 14,23,598 11,82,758 10,7 7,248 NET PROFIT(B) 2,00,106 3,81,451 5,26,665 4 ,42,807 TURNOVER 52,70,969 99,03,047 69,36,652 65,29,5 38 GP RATIO (A/C)(%) 12.62 14.38 17.05 16.50 NP RATIO(B/C)(%) 3.80 3.85 7.59 6.78 THE BOOKS OF ACCOUNTS ARE DULY AUDITED BY A CHARTER ED ACCOUNTANT. SUCH AUDIT IS NOT FINALITY AS FAR AS INCOME TAX PROCEEDINGS ARE CONCE RNED. IT IS NEVERTHELESS PRIMA FACIE EVIDENCE JUSTIFIED THE CLAIM OF THE ASSESSEE. A PER USAL OF THE GROSS PROFIT AND NET PROFIT OF THE ASSESSEE SHOWS THAT THE SAME IS SHOWI NG AN INCREASING TREND COMPARED TO A.Y.2007-08. THEREFORE, THERE CAN BE NO ADVERSE INF ERENCE DRAWN AGAINST THE ASSESSEE AS FAR AS SUPPRESSION OF PROFITS ARE CONCERNED. THE FACT THAT NOTICE U/S 133(6) OF THE ACT CANNOT BE SERVED ON THE ASSESSEE CANNOT BE THE BASIS TO COME TO A CONCLUSION THAT THE PURCHASES WERE BOGUS. IN THIS REGARD, I FIND TH AT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S. DIAGNOSTICS VS CIT IN ITA NO.15 3 OF 2004 JUDGMENT DATED 04.03.2011 ON IDENTICAL FACTS HAS HELD AS FOLLOWS : - HOWEVER, AS REGARDS THE PAYMENTS MADE TO M/ S. SELV AS PHOTOGRAPHICS ARE CONCERNED AMOUNTING TO RS.3, 12,302/ -, WE FIND THAT THOSE HA VE BEEN MADE BY ACCOUNT PAYEE CHEQUES AND THOSE HAVE BEEN ENCASHED THROUGH THE BA NKERS OF M/S. SELVAS PHOTOGRAPHICS. IT APPEARS THAT ACCORDING TO THE APP ELLANT, AT THE TIME OF ASSESSMENT, THE APPELLANT HAD NO BUSINESS TRANSACTION WITH M/S. SEL VAS PHOTOGRAPHICS AND CONSEQUENTLY, THE SAID PARTY DID NOT CO-OPERATE WIT H THE ASSESSING OFFICER. HOWEVER, THE ITA NO.99/KOL/2015 SMT.POMPA SARKAR A.YR.2007-08 4 TRANSACTION HAVING TAKEN PLACE THROUGH ACCOUNT PAYE E CHEQUES, WE ARE UNABLE TO ACCEPT THE CONTENTION OF MR. AGARWAL, THE LEARNED ADVOCATE APPEARING FOR THE REVENUE THAT THE TRANSACTION WAS A NON- EXISTENT ONE. IF AN ASSESSEE TOOK CARE TO PURCHASE MATERIALS FOR HIS BUSINESS BY WAY OF ACCOUNT PAYEE CHEQUES FROM A THIRD PARTY AND SUBSEQUENTLY, THREE YEARS AFTER THE PURCHASE, THE SAID THIRD PART Y DOES NOT APPEAR BEFORE THE ASSESSING OFFICER PURSUANT TO THE NOTICE OR EVEN HAS STOPPED BUSINESS, THE CLAIM OF THE ASSESSEE ON THAT ACCOUNT CANNOT BE DISCARDED AS NON-EXISTENT. I N THE CASE BEFORE US, THE REVENUE HAS NOT PUT FORWARD ANY OTHER GROUND, SUCH AS, IT WAS N OT A GENUINE TRANSACTION FOR OTHER REASONS BUT HAS SIMPLY REJECTED THE CLAIM ON THE GR OUND AS IF THERE WAS NO SUCH TRANSACTION. 7. THE AFORESAID DECISION RENDERED BY THE HONBLE C ALCUTTA HIGH COURT SUPPORTS THE PLEA OF THE ASSESSEE. IN THE GIVEN FACTS AND CI RCUMSTANCES OF THE CASE, I AM OF THE VIEW THAT THE ADDITION MADE BY THE REVENUE AUTHORIT IES CANNOT BE SUSTAINED. ACCORDINGLY THE SAME IS DIRECTED TO BE DELETED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE COURT ON 09.12.2015. SD/- [N.V.VASUDEVAN] JUDICIAL MEMBER DATE: 09.12.2015. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1. SMT. POMPA SARKAR, 7/5, BIJOYGARH, JADAVPUR, KOL KATA-700032. 2 THE I.T.O., WARD-52(1), KOLKATA. 3. THE CIT-XVIIL, KOLKATA 4. THE CIT(A)-XXXIII, KOLKATA 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES