Shri Bhadresh Surendrakumar Shah, Mehsana V. The ACIT.,C.C.1(1), Ahmedabad

ITSSA 511/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1659 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH
• Keywords: Bogus purchase; Search and seizure; Additional evidence; Bad and doubtful debts
• Section: 143(3); 153A; 132

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER SR. NO. IT(SS)A.NO. AND ASSTT.YEAR APPELLANT RESPONDENT 1. 506/AHD/2012 A.Y.2003-2004 BHADRESH SURENDRAKUMAR SHAH 7/A, VIRNAGAR SOCIETY NR. SWAMI VIVEKANAND CHOW MEHSANA. PAN: ADIPS 146 M ACIT, CENT.CIR.1(1) AHMEDABAD. 2. 507/AHD/2012 A.Y.2004-05 -DO- -DO- 3. 508/AHD/2012 A.Y.2005-06 -DO- -DO- 4. 509/AHD/2012 A.Y.2006-07 -DO- -DO- 5. 510/AHD/2012 A.Y.2007-08 -DO- -DO- 6. 511/AHD/2012 A.Y.2008-09 -DO- -DO- 7. 512/AHD/2012 A.Y.2009-10 -DO- -DO- / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI JIMIT SHAH, AR REVENUE BY : SHRI JAGDISH, CIT - DR / DATE OF HEARING : 09/03/2016 / DATE OF PRONOUNCEMENT: 09/03/2016 IT(SS)A NO.506/AHD/2012 & 6 ANRS. 2 / O R D E R PER BENCH: THE PRESENT SEVEN APPEALS ARE DIRECTED AT THE INSTA NCE OF THE ASSESSEE AGAINST COMMON ORDER OF THE LD.CIT(A) DATED 9.8.201 2 PASSED FOR THE ASSTT.YEARS 2003-04 TO 2009-10. 2. APART FROM CHALLENGING THE SPECIFIC ADDITIONS MA DE BY THE AO, AND CONFIRMED BY THE LD.CIT(A), THE ASSESSEE HAS TAKEN A PRELIMINARY GROUND OF APPEAL IN ALL THESE YEARS, PLEADING THEREIN THAT TH E LD.CIT(A) HAS ERRED IN DISMISSING THE APPEALS OF THE ASSESSEE WITHOUT PROV IDING ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE. 3. WITH THE ASSISTANCE OF THE LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD T HAT SEARCH AND SEIZURE OPERATION WAS CONDUCTED UNDER SECTION 132 OF THE IN COME TAX ACT IN THE PREMISES OF THE ASSESSEE. PRIOR TO THE CONDUCT OF THE SEARCH, A SURVEY UNDER SECTION 132A WAS CARRIED OUT AT THE PREMISES OF EDI BLE OIL MILLS GROUP OF PATAN DISTRICT AND AGENTS/BROKERS OF MEHSANA AND SABARKAN THA DISTRICTS OF THE GUJARAT ON 1.9.2008. IN ORDER TO GIVE A LOGICAL EN D TO THE PROCEEDINGS, THE LD.AO HAS ISSUED NOTICE UNDER SECTION 153A OF THE I NCOME TAX IN THE ASSESSMENT YEARS 2003-04 TO 2008-09 ON 28.5.2009. IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE INCOME TAX ACT, THE ASSES SEE HAS FILED RETURN OF INCOME ON 6.4.2010 IN THE ASSTT.YEAR 2003-04 DECLAR ING TOTAL INCOME AT RS.1,09,190/-. SIMILARLY, RETURNS WERE FILED BY TH E ASSESSEE ON DIFFERENT DATES IN OTHER ASSESSMENT YEARS. THE LD.AO HAS PASSED TH E ASSESSMENT ORDER UNDER SECTION 143(3) R.W.S. 153A ON 30.12.2010 IN ALL THE SE ASSESSMENT YEARS. THE IT(SS)A NO.506/AHD/2012 & 6 ANRS. 3 PRELIMINARY ISSUE INVOLVED IN ALL THESE APPEALS IS THAT DURING THE COURSE OF SEARCH ON VERIFICATION OF SEIZED MATERIAL, IT REVEA LED THAT, BILLS IN RESPECT OF PURCHASES MADE FROM M/S.PATEL KIRTIKUMAR GHANSHYAMB AHI & CO. WERE FOUND. THESE BILLS WERE PREPARED BY ONE PERSON. F URTHER, ON VERIFICATION OF ANNEXURE A/9 SEIZED FROM THE RESIDENCE OF THE ASSES SEE, IT WAS NOTICED THAT THE ASSESSEE HAS SHOWN VARIOUS RECEIPTS FROM THE ACCOUN TS OF SJ, DK ETC. IN OTHER WORDS, THE ASSESSEE HAS RECEIVED THE AMOUNTS IN CAS H IN LIEU OF THE BILLS. THE LD.AO HARBOURED A BELIEF THAT THE ASSESSEE HAS CLAI MED BOGUS PURCHASES, AND THEREFORE, HE MADE ADDITIONS IN ALL THESE ASSESSMEN T YEARS. THE TOTAL ADDITION MADE BY THE AO ON ACCOUNT OF BOGUS PURCHASES, BAD D EBTS AND ON ACCOUNT OF UNEXPLAINED CAPITAL CONTRIBUTION IN THESE ASSESSMEN T YEARS WAS OF RS.11,90,70,955/-. 4. DISSATISFIED WITH THE ADDITIONS, THE ASSESSEE CA RRIED THE MATTER BEFORE THE LD.CIT(A). THE LD.CIT(A) HAS NOTICED THE DETAI LS IN TABULAR FORM EXHIBITING THE RETURN OF INCOME AND ADDITIONS MADE BY THE AO IN DIFFERENT ASSESSMENT YEARS. AY RETURNED INCOME ADDITIONS MADE 2003-04 RS. 1,09, 190 ADDITION ON ACCOUNT OF BOGUS PURCHASES FROM M/S. PATEL KIRTIKUMAR GHANSHYAMBHAI & CO., AMBALIYASAN: RS. 15, 19,464 2004-05 RS. 1,26,480 ADDITION ON ACCOUNT OF BOGUS PURCHASES FROM M/S. PATEL KIRTIKUMAR GHANSHYAMBHAI & CO., AMBALIYASAN: RS.1 1,65,860 IT(SS)A NO.506/AHD/2012 & 6 ANRS. 4 2005-06 RS. 1,75, 860 ADDITION ON ACCOUNT OF BOGUS PURCHASES FROM M/S. PATEL VIPULKUMAR BHARATBHAI NI CO., AMBALIYASAN: RS. 1,18,738 2006-07 RS.1,20,170 ADDITION ON ACCOUNT OF BOGUS PURCHASES FROM M/S. PATEL KIRTIKUMAR GHANSHYAMBHAI & CO., AMBALIYASAN: M/S. PATEL VIPULKUMAR BHARATBHAI NI CO., AMBALIYASAN: RS.4,22,722 RS.8,38,175 RS. 12,60,897 2007-08 RS.2,49,080 ADDITION ON ACCOUNT OF BOGUS PURCHASES FROM M/S. PATEL KIRTIKUMAR GHANSHYAMBHAI & CO., AMBALIYASAN: RS.2,81,403 2008-09 NIL ADDITION ON ACCOUNT OF BOGUS PURCHASES FROM M/S.PATEL KIRTIKUMAR GHANSHYAMBHAI & CO., AMBALIYASAN: RS.1,75,80,869/- FROM M/S. PATEL VIPULKUMAR BHARATBHAI & CO., AMBALIYASAN: RS.2,21,51,306 M/S.SITARAM JOITRAM PATEL, UNJHA, RS.95,67,000 M/S.PATEL DASRATHLAL KANTILAL, UNJHA RS.83,74,000 RS.5,76,73,175/- ADDITION OF BAD DEBTS RS.49,18,361/- UNEXPLAINED CAPITAL INTRODUCED RS.1,46,21,634/- 2009-10 RS.6,55,720 ADDITION ON ACCOUNT OF BOGUS PURCHASES: VISHAL TRADERS, VIRPUR RS.63,73,482 IT(SS)A NO.506/AHD/2012 & 6 ANRS. 5 M/S.BAJRANG ENTERPRISES, LUNAWADA RS.25,13,238 RS.88,86,810 ADMITTED UNDISCLOSED INCOME UNEXPLAINED JEWELLEREY UNEXPLAINED INTRODUCTION OF CAPITAL RS.1,00,00,000 RS.10,43,750/- RS.1,75,80,955/- 5. THE LD.CIT(A) FURTHER COMPILED THE DETAILS EXHIB ITING THE DATE OF HEARING AND EVENTS OCCURRED ON SUCH DATES. THE DETA ILS MENTIONED IN PARA-5 READ AS UNDER: AY NOTICE ISSUED ON DATE OF BEARING WHAT .HAPPENED ON THE DATE OF HEARING FROM AY 2003-04 TO AY 2009- 10 16.4.2011 13.5.2011 NO ONE APPEARS ON 9.6.201 1 ADJOURNMENT APPLICATION RECEIVED FROM THE APPELLANT HIMSELF FOR 7 DAYS ADJOURNMENT STATING HE IS ENGAGING A LAWYER. 16.6.2011 AFTER 7 DAYS NO ONE TURNS UP FROM AY 2003-04 TO AY 2009- 10 16.6.2011 ANOTHER NOTICE ISSUED 24.6.201 1 NO ONE APPEARS FROM AY 2003-04 TO AY 2009- 10 29.6.2011 ANOTHER NOTICE ISSUED 8.7.201 1 NO ONE APPEARS IT(SS)A NO.506/AHD/2012 & 6 ANRS. 6 ANOTHER ADJOURNMENT APPLICATION DATED 17.8.2011 RECEIVED FROM THE APPELLANT HIMSELF , FOR 30 DAYS ADJOURNMENT. DATE ADJOURNED TO 19.9.2011 19.9.2011 NO ONE APPEARS FROM AY 2003-04 TO AY 2009- 10 29.9.201 1 11.10.2011 NO ONE APPEARS 2.11.2011 ANOTHER ADJOURNMENT APPLICATION DATED 2.11.2011 RECEIVED FROM THE APPELLANT HIMSELF STATING THAT HIS CA AMIT PATEL HAS NO TIME SO HE IS ENGAGING ANOTHER ADVOCATE NAMED NITINBHAI. DATE ADJOURNED TO 5.12.2011 5.12.2011 ANOTHER ADJOURNMENT APPLICATION DATED 5.12.2011 RECEIVED FROM THE APPELLANT HIMSELF SATING THAT THE SHOP HAS BEEN SEALED BY APMC AND HE WOULD APPEAR WHEN THE SHOP IS OPENED. LETTER FROM THE APPELLANT RECEIVED ON 2.2.2012 INFORMING THAT THE LICENCE OF THE APPELLANT HAD BEEN CANCELLED AND HE HAD BEEN IT(SS)A NO.506/AHD/2012 & 6 ANRS. 7 PROHIBITED FROM TRADING IN THE MARKET YARD. THAT HE HAD BEEN FILING HIS INCOME TAX RETURNS AND THAT SHRI N.D. PATEL WHO WAS EARLIER LOOKING AFTER TAX MATTERS AND WHO HAD TAKEN FEE FROM THE APPELLANT FOR RUNNING APPEAL DENIED APPEARING IN APPELLATE PROCEEDINGS SO THE APPELLANT HAD ENGAGED SHRI NITIN SHAH, AS A.R AND AS TIE WAS STILL COLLECTING NECESSARY PAPERS/DOCUMENTS, ADJOURNMENT TILL END OF MARCH WAS REQUESTED. FROM AY 2003-04 15.3.2012 26.3.2012 SHRI R. K. JINDAL CA TO AY 2009-10 FILES POWER OF ATTORNEY AND ADJOURNMENT LETTER DATED 26.3.2012 SIGNED BY THE APPELLANT ASKING FOR 40 DAYS TIME. DATE WAS ADJOURNED TO 9-04- 2012. 9.04.2012 NO ONE APPEARS IT(SS)A NO.506/AHD/2012 & 6 ANRS. 8 FROM AY 2003-04 12.4.2012 16.4.2012 NO ONE APPEARS TO AY 2009- 10 30.05.2012 8.06.2012 A LETTER IS RECEIVED IN DAK ON 8.6.2012 STATING THAT THE SHOP OF THE APPELLANT AT D/8, MARKET YARD. MEHSANA WHERE RECORDS AND COMPUTER ARE LYING HAD BEEN SEALED BY AGRICULTURAL PRODUCE MARKET COMMITTEE, MEHSANA FROM 25.12.2010 AND IS STILL SEALED, SO THE APPELLANT WAS UNABLE TO PREPARE SUBMISSION. WITH THIS LETTER, LETTER DATED 25.5.2012 OF THE APPELLANT REQUESTING THE COMMITTEE TO OPEN THE SEAL WAS ENCLOSED. 7.06.20 12(SHOW- 11.06.2012 ANOTHER ADJOURNMENT CAUSE NOTICE ISSUED) LETTER DATED 11.6.2012 FILED STATING THE SAME FACTS AS MENTIONED IN THE ROW ABOVE. IN OTHER WORDS, INFORMING THAT THE SHOP OF THE APPELLANT WHERE THE RECORDS ARE LYING REMAINS SEALED BY THE AGRICULTURAL PRODUCE MARKET COMMITTEE, MEHSANA FROM 25.5.10 TILL DATE. ON RECEIPT OF THIS LETTER, DATE WAS ADJOURNED TO 25.6.2012. 25.6.2012 NO ONE APPEARS, ADJOURNMENT APPLICATION ASKING FOR A MONTH IT(SS)A NO.506/AHD/2012 & 6 ANRS. 9 RECEIVED IN DAK. 29.6.2012 DATE OF- HEARING FIXED FOR 8.07.2012. HOWEVER ON 4.7.2012, THE ID A.R APPEARS. ON 4.7.2012 WHEN THE A.R. SHRI R.K. JINDAL APPEARS HE THROUGH ORDER SHEET NOTING IS ASKED TO FILE COPY OF P. & L. ACCOUNTS, BREAK UP OF PURCHASES, BANK STATEMENTS AND ENGLISH TRANSLATION OF THE STATEMENTS OF THE APPELLANT. DATE IS ADJOURNED TO 16.7.2012. 16.7.2012 NO ONE APPEARS. NEITHER ANY APPLICATION OR EXPLANATION IS RECEIVED. 1.8.2012 THE LEARNED A.R. APPEARS ON 1.8.2012 BUT WITHOUT ANY PAPERS AND STATES THAT HE HAS NO PAPERS. HE IS ONCE AGAIN INFORMED ABOUT THE GRAVITY OF THE SITUATION AND ALSO ABOUT INNUMERABLE OPPORTUNITIES ACCORDED TO THE APPELLANT BOTH AT THE ASS ESSMENT AND APPELLATE STAGE. DATE IS FINALLY ADJOURNED TO 8.8.2012. 8.8.2012 THE ID A.R SHRI R. K JINDAL CA APPEARS BUT WITHOUT ANY REPLY, SUBMISSION OR DETAIL. HE REQUESTS WITHOUT APPLICATION FOR FURTHER TIME OF A MONTH. IT(SS)A NO.506/AHD/2012 & 6 ANRS. 10 6. THE LD.CIT(A) IN THIS WAY CONFIRMED THE ADDITION S MADE BY THE AO. 7. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING THE ORDER OF THE CIT(A) FILED APPLICATION FOR PERMISSION TO PRODUCE ADDITIONAL EVIDENCES. HE FILED COPY OF THE NOTICE ISSUED BY APMC, MEHSANA TO THE ASSESSEE DATED 18.12.2010. THE APPLICATION FILED BY THE ASSESSEE TO CONTROLLER, AGRICULTURE MARKET & RURAL ECONOMY, GANDHINAGAR, THE ORDER OF T HE CONTROLLER ETC. ON THE STRENGTH OF THESE DETAILS, HE CONTENDED THAT SH OP OF THE ASSESSEE WAS SEALED BY THE APMC, AND THEREFORE, THE ASSESSEE COULD NOT HAVE ACCESS ON THE RECORD OR COMPUTERS. HE COULD NOT DEFEND ITSELF BEFORE T HE AO AS WELL AS BEFORE THE CIT(A). HE POINTED OUT THAT THE LICENCE OF THE ASS ESSEE WAS SUSPENDED W.E.F. 11.6.2010 AND SEAL WAS EFFECTED W.E.F OCTOBER, 2010 . THE ASSESSMENT ORDER WAS PASSED ON 30 TH DECEMBER, 2010. 8. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES OF THE CASE, WE FIND THAT THOUGH THE APPEALS OF THE ASSESSEE WER E FIXED ON A NUMBER OF OCCASIONS FOR HEARING BY THE LD.CIT(A), THE ASSESSE E SPECIFICALLY VIDE LETTER DATED 8.6.2012 STATED THAT ITS RECORD IS LYING IN T HE SHOP WHICH IS SEALED BY THE APMC. HENCE, THE ASSESSEE WAS HANDICAPPED IN DEFEN DING HIMSELF WITH REGARD TO VARIOUS ADDITIONS. BY WAY OF APPLICATION FOR IMPLEADING THE ADDITIONAL EVIDENCES, THE ASSESSEE HAS PLACED ON RE CORD COPIES OF THE NOTICE ISSUED BY THE DY.CONTROLLER, AGRICULTURE MARKETING COMMITTEE AND OTHER AUTHORITIES, WHEREIN THE DISPUTE WITH REGARD TO CON TINUATION OF BUSINESS AT THE END OF THE ASSESSEE IN THE PREMISES WAS INVOLVED. IN OUR OPINION, THE ASSESSEE IS ABLE TO DEMONSTRATE SUFFICIENT REASONS, WHICH HA VE COME UP IN HIS WAY TO DEFEND VARIOUS CHARGES RAISED BY THE AO FOR MAKING THE ADDITIONS. THE IT(SS)A NO.506/AHD/2012 & 6 ANRS. 11 ASSESSEE COULD NOT DISPEL THESE REASONS BEFORE THE FIRST APPELLATE AUTHORITY IN THE ABSENCE OF OTHER DETAILS. THIS WOULD DEMONSTRA TE THAT THE ASSESSEE COULD NOT GET ADEQUATE OPPORTUNITY TO EXPLAIN HIS CASE. THEREFORE, WITHOUT GOING INTO THE MERITS OF THE ADDITION, WE SET ASIDE THE O RDER OF THE CIT(A) ON THIS PRELIMINARY ISSUE AND REMIT ALL THE ISSUES TO THE F ILE OF THE LD.CIT(A) FOR FRESH ADJUDICATION. 9. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 9 TH MARCH, 2016 AT AHMEDABAD. SD/- SD/- ( MANISH BORAD ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 09/03/2016