ANTIQUARIAT, Jaipur V. DCIT, Jaipur

MA 2/JPR/2016

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4053 (ITAT-JAIPUR)
• Duration Of Justice: 1 month(s) 30 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 05-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: VARUN GOYAL
• Keywords: Bogus purchase
• Section: 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM M.A. NO. 02 & 03/JP/2016 (ARISING OUT OF VK;DJ VIHY LA- @ ITA NO. 13 & 14/JP/2013) FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2004-05 & 2005-06 M/S ANTIQUARIAT DESHERA KOTHI, AMER ROAD, JAIPUR. CUKE VS. D.C.I.T. CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AABFA 7989 B VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI VARUN GOYAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI O.P. BHATEJA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 19/02/2016 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 04/03/2016 VKNS'K @ ORDER PER: T.R. MEENA, A.M. THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATI ON ON 07/12/2015 AGAINST THE ORDER OF THIS BENCH OF ITAT, JAIPUR IN ITA NO. 13 & 14/JP/2013 FOR A.Y. 2004-05 & 2005-06, WHICH WAS PASSED ON 27/03/2015. ITA 02 & 03/JP/2016_ M/S ANTIQUARIAT VS. DCIT 2 2. IN THE PRESENT M.A., THE ASSESSEE HAS SUBMITTED AS UNDER:- THE APPLICANT BEGS TO SUBMIT THAT THE ORDER, GIVING RISE TO THE PRESENT MISCELLANEOUS APPLICATION WAS PASSED ON 27.0 3.2015. 1. THE HONBLE 1TAT HAS CONFIRM THE LEVY OF PENALTY U /S 27 L(L)(C) OF THE IT ACT, 1961 ON THE ESTIMATED TRADING ADDITIO N OF RS.5 LACS AND RS.2 LACS RESPECTIVELY FOR THESE ASSESSMEN T YEARS BY GIVING FOLLOWING FINDINGS AT PARA 6, PG 12 TO 14 OF THE ORDER:- (A) THE ADDITIONS WERE CONFIRMED BY THE LOWER AUTHORI TIES AS WELL AS ITAT ON THE BASIS OF UNVERIFIABLE/BOGUS PURCH ASES FOR WHICH DEPARTMENT HAD COLLECTED NUMBER OF EVIDENC ES. THE COORDINATE BENCH HAS CONFIRMED ADDITION OF RS.5 LACS IN AY 04-05 AND RS.2 LACS IN AY 05-06 ON THE BASIS OF THE FINDINGS GIVEN BY THE LOWER AUTHORITIES. THE CLAIM OF A/R OF ASSESSEE THAT ADDITIONS WERE MADE ON ESTIMATE BASIS IS NOT ACCEPTABLE AS ADDITIONS WERE MADE AND CONFIRMED ON THE BASIS OF BOGUS PURCHASES DETECTED BY THE DEPART MENT. (B) THE CASE LAWS REFERRED BY THE ASSESSEE ARE NOT SQUARELY APPLICABLE ON FACTS, EXPLANATION SUBMITTED BY ASSES SEE WERE NOT BONAFIDE, ASSESSEE HAS NOT CORRELATED THE S ALE WITH REFERENCE TO THE BOGUS PURCHASES AND THAT DELHI HIGH COURT IN 365 ITR 304 HAS HELD THAT EVEN IMPOSITION O F PENALTY ON ESTIMATE IS JUSTIFIED. 3. THE HONBLE ITAT IN COMING TO THE ABOVE CONCLUSIO N HAS NOT CONSIDERED THE VARIOUS FACTS AVAILABLE ON RECORD AN D THEREBY A ITA 02 & 03/JP/2016_ M/S ANTIQUARIAT VS. DCIT 3 MISTAKE APPARENT ON RECORD HAS CREPT IN ITS ORDER. THESE MISTAKES ARE AS UNDER:- (A) THE AO IN THE ASSESSMENT ORDER MADE DISALLOWANCE OF PURCHASES OF RS.2,05,14,654/- AND RS.72,20,347/- RESPECTIVELY BY TREATING THE SAME AS BOGUS. THIS IS CONFIRMED BY CIT(A). THE HONBLE ITAT, HOWEVER, CONSIDERING THE FACT OF NON AVAILABILITY OF QUANTIT ATIVE DETAILS, PAST RESULTS, EXPLANATION FOR DECLINE IN G .P. RATE CONSIDERED IT TO BE JUST AND PROPER TO SUSTAIN AN A DDITION OF RS.5 LACS AND RS.2 LACS RESPECTIVELY TO PLUG THE LEAKAGE, IF ANY, CAUSED BY THE ABOVE DISCREPANCIES. THUS, HONBLE ITAT SUBSTITUTED THE ADDITION ON ACCOUNT OF BOGUS PURCHASES MADE BY THE LOWER AUTHORITIES TO AN ESTIMATED LUMP SUM ADDITION TO PLUG THE LEAKAGE, IF ANY, DUE TO NON AVAILABILITY OF QUANTITATIVE DETAILS AND THE DECLINE IN G.P. RATE. THEREFORE, THE FINDING OF HON BLE ITAT IN THE PENALTY ORDER THAT THE ITAT IN QUANTUM APPEAL HAS CONFIRMED THE ADDITION ON THE BASIS OF T HE FINDING GIVEN BY THE LOWER AUTHORITIES AND ON THE BA SIS OF BOGUS PURCHASES DETECTED BY THE DEPARTMENT IS INCOR RECT AND IS A MISTAKE APPARENT ON RECORD. (B) THE ASSESSEE HAS RELIED ON THE DECISION OF HONB LE ITAT, JAIPUR BENCH IN CASE OF KAMLESH DANGAYACH VS. ACIT ORDER DT. 16.05.2012. THIS DECISION IS SQUARELY APPL ICABLE TO THE FACTS OF THE ASSESSEES CASE IN AS MUCH AS I T HAS DEALT WITH THE LAW WITH REFERENCE TO THE LEVY OF PENAL TY ON ITA 02 & 03/JP/2016_ M/S ANTIQUARIAT VS. DCIT 4 ESTIMATED ADDITION, BONAFIDENESS OF THE EXPLANATION OF THE ASSESSEE, THE DECLINE IN THE G.P. RATE AND THE ITAT SUSTAINING PART ADDITION TO PLUG THE POSSIBLE LEAKA GE ON ACCOUNT OF UNVERIFIABLE PURCHASES. HOWEVER, THIS DEC ISION IS CONSIDERED AS NOT SQUARELY APPLICABLE ON THE FAC TS WITHOUT ANY DISCUSSION. FURTHER, IT IS IGNORED THAT HONBLE ITAT IN QUANTUM APPEAL, WHILE SUSTAINING LUMP SUM ADDITION TO PLUG POSSIBLE LEAKAGE OF REVENUE HAS CONSIDERED THE FACT OF ABSENCE OF CORRELATION OF TH E SALES WITH PURCHASE DUE TO NON MAINTENANCE OF STOCK REGIST ER. THE DECISIONS OF SUPREME COURT IN 358 ITR 593 AND DE LHI HIGH COURT IN 365 ITR 304 ARE NOT WITH REFERENCE TO THE TRADING ADDITION/UNVERIFIABLE PURCHASES. THUS, WITHOU T SPECIFYING AS TO HOW THE DECISION OF HONBLE ITAT IN CASE OF KAMLESH DANGAYACH (SUPRA) ARE NOT SQUARELY APPLICABLE ON FACTS, THE LEVY OF PENALTY CONFIRMED BY HONBLE ITAT ON SUCH ESTIMATED ADDITION IS A MISTAK E APPARENT ON RECORD. IN VIEW OF ABOVE, A MISTAKE APPARENT ON RECORD HAS CREPT IN THE ORDER OF HONBLE ITAT AND THEREFORE PARA 6 OF THE OR DER BE SUITABLY MODIFIED. 3. THE LD AR OF THE ASSESSEE HAS ARGUED THAT AT THE TIME OF HEARING, THE COUNSEL HAS DRAWN OUR ATTENTION ON THE DECISION OF THE THEN HONBLE BENCH OF ITAT IN QUANTUM ORDER AND IT HAS CLEARLY ME NTIONED IN ORDER ITSELF THAT ESTIMATED ADDITION OF RS. 5,00,000/- ON PROBABILITY ONLY I.E. TO ITA 02 & 03/JP/2016_ M/S ANTIQUARIAT VS. DCIT 5 PLUG AND LEAKAGE, IF ANY CAUSED BY THE ABOVE DISCR EPANCY. WHEN ADDITION HAD BEEN CONFIRMED BY THE HONBLE ITAT ON E STIMATED BASIS, THERE IS NO DIRECT LINK WITH ANY BILL VOUCHER, THEN THERE IS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS WITHIN THE MEANING OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE LD ASSESSING OFFICER AS WELL AS THE LD CIT(A) ALSO IM POSED AND CONFIRMED THE RESPECTIVE PENALTY WITHOUT CONSIDERING THE FINDI NG OF THE HONBLE ITAT AGAINST THE QUANTUM APPEAL. THE CASE LAW RELIED U PON BY THE LD CIT(A) WERE ALSO NOT SQUARELY APPLICABLE AS ALL THE S ALES AND PURCHASES HAVE BEEN ENTERED IN THE BOOKS OF ACCOUNT. THE CASE LAWS REFERRED BY THE LD CIT(A) I.E. CIT VS. ZOOM COMMUNICATION P. LTD. (2010) 327 ITR 510 IS ALSO NOT APPLICABLE AS THE ASSESSEE HAS NOT MADE ANY INCORRECT CLAIM. MERELY BECAUSE THE ADDITION HAS BEEN CONFIRM ED, THE PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE IMPOSED. THE ASSESSEE HAD FURNISHED NECESSARY INFORMATION/PARTICULARS. THEREFORE, THE H ONBLE ITAT HAS NOT CONSIDERED THE FACT OF THE CASE AND PASSED ORDER WIT HOUT CONSIDERING THE FINDING GIVEN BY THE HONBLE ITAT IN QUANTUM ADD ITION. 4. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE HONBLE BENCH AND ARGUED THAT REVIEW U/S 254 OF THE ACT IS NOT PERMISSIBLE. ITA 02 & 03/JP/2016_ M/S ANTIQUARIAT VS. DCIT 6 5. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE LD ASSESSING OFFICER DISALLOWED PURCHASES OF RS. 2,05,14,654/- AND RS. 72 ,20,347/- RESPECTIVELY BY TREATING THE SAME AS BOGUS, WHICH WAS CONFIRMED BY THE LD CIT(A). THE COORDINATE BENCH HAS CONSIDERED THE F ACTS OF THE CASE, AVAILABILITY OF QUANTITATIVE DETAILS, PAST RESULT, EXPLANATION FOR DECLINE IN GP RATE CONSIDERED IT TO BE JUST AND PROPER TO SUST AIN THE ADDITION OF RS. 5 LACS AND RS. 2 LACS RESPECTIVELY TO PLUG THE LEAK AGE IF ANY CAUSED BY THE ABOVE DISCREPANCY. THUS, THE COORDINATE BENCH HA D SUBSTITUTED BOGUS PURCHASE ADDITION IN ESTIMATED LUMP SUM ADDIT ION. THE COORDINATE BENCH ALSO HAS NOT CONSIDERED THE CASE L AWS CITED BY THE ASSESSEE OF ITAT BENCH IN THE CASE OF KAMLESH DANGAY ACH VS. ACIT IN ITA NO. 18 & 19/JP/2012 ORDER DATED 16/5/2012, THER EFORE, IT IS APPARENT MISTAKE ON RECORD, WHICH IS RECTIFIABLE U/S 254(2) OF THE ACT. THEREFORE, WE HAVE CONSIDERED VIEW THAT NOT CONSIDERIN G THE FINDING OF THE ADDITION CONFIRMED AND CASE LAWS REFERRED BY THE ASSESSEE AT THE TIME OF DECIDING THE CASE BY THE BENCH IS APPARENT MISTAKE, WHICH IS RECTIFIABLE U/S 254(2) OF THE ACT. ACCORDINGLY, WE R ECALL OUR ORDER DATED 27/3/2015. THE REGISTRY OF THE OFFICE IS DIRECTED TO FIX THE CASE IN REGULAR COURSE OF HEARD. ITA 02 & 03/JP/2016_ M/S ANTIQUARIAT VS. DCIT 7 6. IN THE RESULT, THE M.A. FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 04/03/2016. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 04 TH MARCH, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S ANTIQUARIAT, JAIPUR 2. IZR;FKHZ @ THE RESPONDENT- DCIT, CENTRAL CIRCLE-2, 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 (MA NO. 02 & 03/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR