The DCIT, Central Circle- 1(1), Ahmedabad V. Sadbhav Engineering Ltd., Ahmedabad

ITSSA 91/AHD/2016

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1775 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-05-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 18-05-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 03-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALPESH PARMAR DR
• Keywords: Bogus purchase; Revised return

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD , , ! BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER (SS) ./ I.T(SS).A. NO.91/AHD/2016 ( / ASSESSMENT YEAR : 2011-12) DY. CIT CENTRAL CIRCLE-1(1) AHMEDABAD / VS. SADBHAV ENGINEERING LTD. SADBHAV HOUSE OPP.LAW GARDEN POLICE CHOWKI, ELLISBRIDGE AHMEDABAD-380 006 & ./ ./ PAN/GIR NO. : AADCS 0852 Q ( &) / APPELLANT ) .. ( *+&) / RESPONDENT ) &), / APPELLANT BY : SHRI ALPESH PARMAR, DR *+&) -, / RESPONDENT BY : NONE . - / DATE OF HEARING 18/05/2016 /012 - / DATE OF PRONOUNCEMENT 24/05/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-11, AHMEDABAD DATED 16/11/2015 FOR THE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IT(SS)A NO.91/A HD/2016 DY.CIT VS. SADBHAV ENGINEERING LTD. ASST.YEAR 2011-12 - 2 - 2.1. A SEARCH U/S.132 OF THE I.T.ACT, 1961 (HEREI NAFTER REFERRED TO AS THE ACT) WAS CONDUCTED IN THE CASES OF SADBHAV GR OUP ON 05/10/2010. THE ASSESSEE FILED ITS RETURN OF INCOME FOR AY 2011 -12 ON 26/09/2011 DISCLOSING TOTAL INCOME OF RS.1,66,25,02,204/-. T HEREAFTER, ASSESSEE FILED REVISED RETURN OF INCOME ON 29/09/2012 DISCLO SING TOTAL INCOME AT RS.1,64,14,53,190/-. THE CASE WAS TAKEN UP FOR SCR UTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) R.W.S.153B(1)(B) O F THE ACT VIDE ORDER DATED 28/03/2013 AND THE TOTAL INCOME WAS DETERMINE D AT RS.1,75,41,75,720/- INTER ALIA BY DISALLOWING THE CLAIM U/S.80IA(4) OF RS.6,97,30,990/-, DISALLOWANCE ON ACCOUNT OF BOGUS PURCHASE OF RS.1,71,45,944/-, DISALLOWANCE OF ESOP EXPENSES OF RS.2,10,49,015/- AND DISALLOWANCE U/S.35D OF THE ACT OF RS.47,96,578 /-. AGGRIEVED BY THE ORDER OF THE AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A) WHO VIDE ORDER DATED 29/07/2013 (IN APPEAL NO.CIT(A)-I/CC.1( 1)/222/2012-13) GRANTED SUBSTANTIAL RELIEF TO THE ASSESSEE BY DELET ING THE VARIOUS ADDITIONS BUT ONLY UPHELD THE ADDITION ON ACCOUNT OF BOGUS P URCHASES TO THE EXTENT OF 25%, I.E. RS.42,86,486/-. ON THE AFORESAID DISA LLOWANCE, AO WAS OF THE VIEW THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME AS HE WAS OF THE VIEW THAT IF THE SEARCH HAD NOT TA KEN PLACE, BOGUS PURCHASES WOULD HAVE GONE UNDETECTED. HE WAS THERE OF THE VIEW THAT ASSESSEE WAS LIABLE FOR PENALTY U/S.271(1)(C) OF TH E ACT AND ON THE AFORESAID ADDITION, THAT WERE CONFIRMED BY LD.CIT(A ) VIDE ORDER DATED 25/03/2015 LEVIED PENALTY OF RS.13,24,524/-. AGGRI EVED BY THE ORDER OF IT(SS)A NO.91/A HD/2016 DY.CIT VS. SADBHAV ENGINEERING LTD. ASST.YEAR 2011-12 - 3 - THE AO, ASSESSEE CARRIED THE MATTER BEFORE LD.CIT(A ) WHO VIDE ORDER DATED 16/11/2015 (IN APPEAL NO.CIT(A)-11/833-A/CC-1 (1)/2014-15 DELETED THE PENALTY BY HOLDING AS UNDER:- IN THE INSTANT CASE, AS DISCUSSED ABOVE, THE AO MA DE ADDITION ON THE GROUND OF BOGUS PURCHASES. THE APPELLATE AUTHORITY RESTRICTED THE ADDITION ONLY TO 25% OF THE TOTAL ADDITION BY RELYI NG ON THE DECISION IN THE CASE OF JAGDAMBA GINNING FACTORY, AY 2008-09 W HEREIN THE DISALLOWANCE MADE AT THE RATE OF 100% BY THE AO ON ACCOUNT OF BOGUS PURCHASES WAS RESTRICTED TO 25% BY THE TRIBUNAL IN ITS ORDER NO.ITA 317/AHD/2013. THUS, IT WAS EVIDENT FROM THE ABOVE FACTS THAT THE ADDITION MADE ON BOGUS PURCHASES WAS SUBSTANTIALLY REDUCED/DELETED BY THE CIT(A) WHICH LEADS TO A CONCLUSION THAT PART OF THE ADDITION WAS SUSTAINED ON ESTIMATE BASIS ONLY. THUS, THE FACTS AND CIRCUMSTANCES DISCUSSED IN THE CASE OF MAK DATA (P) LTD. (SUPRA) AND THAT OF THE PRESENT CASE OF THE ASSESSEE ARE ALTOGETHER DIFFERE NT. HERE THERE WAS NO ISSUE OF ANY DISCLOSURE EITHER VOLUNTARY OR ON ACCO UNT OF DETECTION OF CONCEALMENT BY THE AO. THEREFORE, AFTER HAVING REGARD TO ALL THE FACTS AND CIRCUMSTANCES OF THE CASE, SUBMISSIONS OF THE APPELLANT AND POSITION OF LAW ON THE ISSUE, IT IS MY CONSIDERED OPINION THAT PENALTY WAS NOT LEVIABLE IN SUCH CASE. ACCORDINGLY, THE APPEAL IS ALLOWED. 2.2. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE I S NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN LAW AND/OR ON FACTS IN DELET ING THE PENALTY U/S.271(1)(C) OF RS.13,24,524/- WITHOUT APPRECIATIN G THE FACTS OF THE CASE AND RELEVANT PROVISIONS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE A.O. IT(SS)A NO.91/A HD/2016 DY.CIT VS. SADBHAV ENGINEERING LTD. ASST.YEAR 2011-12 - 4 - 3. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE, THOUGH INTIMATION ABOUT THE HEARING WAS SENT TO THE ASSESSEE BY REGISTERED POST. WE THEREFORE PROCEED TO DECIDE TH E APPEAL EX-PARTE QUA THE ASSESSEE. 3.1. BEFORE US, LD.DR SUPPORTED THE ORDER OF AO. 4. WE HAVE HEARD THE LD.DR, PERUSED THE MATERIAL AV AILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. IT IS AN UNDISPUTED FACT THAT AN ADDITION ON ACCOUNT OF BOGUS PURCHASES WERE MADE BY THE AO WHILE FRAMING ASSESSMENT U/S.143(3) R.W.S.153B(1)(B ) OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A), WHO GRANTED SUBSTANTIAL RELIEF TO THE AS SESSEE AND RESTRICTED THE ADDITION TO THE EXTENT OF RS.42,86,486/- (BEING 25% OF THE TOTAL ADDITION). WE FIND THAT THE LD.CIT(A) WHILE DECIDI NG THE ISSUE IN FAVOUR ASSESSEE IN PENALTY PROCEEDINGS HAS HELD THAT SINC E THE ADDITION WAS MADE ON ESTIMATED BASIS, NO PENALTY WAS LEVIABLE AN D FOR WHICH HE HAD RELIED ON THE TRIBUNALS DECISION OF JAGDAMBA GINNI NG FACTORY FOR AY 2008-09 IN ITA NO.317/AHD/2013. HE HAS FURTHER HEL D THAT THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE CASE OF MAK DATA ( P) LTD. REPORTED AT 358 ITR 593 (SC), BEING DIFFERENT WERE NOT APPLICAB LE TO THE FACTS OF THE PRESENT CASE. BEFORE US, REVENUE HAS NOT PLACED AN Y MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF THE LD.CIT(A) NOR HAS PLACED ANY CONTRARY BINDING DECISION. IN VIEW OF THE AFORESAID FACTS, WE SEE NO REASON TO IT(SS)A NO.91/A HD/2016 DY.CIT VS. SADBHAV ENGINEERING LTD. ASST.YEAR 2011-12 - 5 - INTERFERE WITH THE ORDER OF THE LD.CIT(A). THUS, G ROUND OF THE REVENUE IS DISMISSED. 5. IN THE RESULT, REVENUES APPEAL STANDS DISMISSED . THIS ORDER PRONOUNCED IN OPEN COURT ON 24/05/2016 SD/- SD/- ( ) () (SHAILENDRA KUMAR YADAV) ( ANIL CHATUR VEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 24 / 05 /2016 5..,.../ T.C. NAIR, SR. PS !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. &) / THE APPELLANT 2. *+&) / THE RESPONDENT. 3. 678 9 / CONCERNED CIT 4. 9 ( ) / THE CIT(A)-11, AHMEDABAD 5. :;<*78 , 78 2 , 6 / DR, ITAT, AHMEDABAD 6. <>?. / GUARD FILE. / BY ORDER, +:* //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 18.5.16 (DICTATION-PAD 9+ PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20.5.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 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.24.5.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 24.5.16 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