The ITO, Ward-1(1)(3), Surat V. M/s. Kabir Jewels Pvt. Ltd., Surat

MA 26/SRT/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4219 (ITAT-SURAT)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-02-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 08-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bogus purchase; Tax effect
• Section: 143(3); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER MA NO.26/SRT/2019 IN ITA NO.1829/AHD/2016 FOR AY.2011-12 ( VIRTUAL HEARING) THE INCOME TAX OFFICER, WARD-1(1)(3), SURAT. VS M/S.KABIR JEWELS PVT. LTD., 35, SAHYOG CHAMBER, SARDAR CHOWK, VARACHHA ROAD, SURAT. [PAN: AAGBCK 5348 M ] APPLICANT RESPONDENT ASSESSEE BY MRS. MITALI MEHTA - CA/ AR REVENUE BY MRS ANUPMA SINGHLA-SR. DR DATE OF HEARING 05.02.2021 DATE OF PRONOUNCEMENT 10.02.2021 ORDER UNDER SECTION 254(2) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS MISCELLANEOUS APPLICATIONS (MA) IS FILED BY THE REVENUE IN RECALLING OF ORDER DATED 16.11.2018 IN ITA NO.1829/AHD/2016 FOR A.Y. 2011-12. 2. THE LEARNED DEPARTMENTAL REPRESENTATIVE (SR.DR) FOR THE REVENUE SUBMITS THAT THE APPEAL OF THE REVENUE WAS DISMISSED VIDE ORDER DATED 16.11.2018 DUE TO LOW TAX EFFECT. HOWEVER, WHILE DECIDING THE APPEAL, THE REVENUE WAS GIVEN LIBERTY TO APPROACH THE TRIBUNAL FOR RECALL OF THIS ORDER IN CASE IT IS DISCOVERED THAT THE CASE OF REVENUE FALL WITHIN THE EXCEPTION CLAUSE OF CIRCULAR DATED 11.07.2018. THE SR.DR FOR THE REVENUE SUBMITS THAT THIS CASE FALLS WITHIN THE EXCEPTION OF CLAUSE MA NO.26/SRT/2019 IN ITA NO.1829/AHD/2016 M/S.KABIR JEWELS PVT. LTD., (AY 2011-12) 2 10(E) OF CBDT CIRCULAR DATED 20.08.2018. THE SR.DR FOR REVENUE PRAYED THAT ORDER MAY BE RECALLED FOR ADJUDICATION AFRESH. 3. THE SR. DR FOR REVENUE FURTHER EXPLAINED THAT CLAUSE 10 OF CIRCULAR NO.3/2018 DATED 11.07.2018 IS ONLY ILLUSTRATIVE WHEREIN REFERENCE OF LAW ENFORCEMENT AGENCY SUCH AS CBI, EXCISE, DRI, SFIO AND DIRECTORATE OF GST INTELLIGENCE ARE ONLY REFERRED. THE VAT DEPARTMENT IS ALSO THE LAW ENFORCEMENT AGENCY, THUS, THE PRESENT APPEAL CLEARLY FALLS WITHIN THE EXCEPTION CLAUSE OF 10(E) OF CIRCULAR DATED 20.08.2018. 4. ON THE OTHER HAND, THE LEARNED AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT DURING THE COURSE OF HEARING OF APPEAL ON 16.11.2018, NO SUCH FACT WAS BROUGHT TO THE NOTICE OF THE TRIBUNAL THAT THE CASE OF REVENUE FALLS WITHIN EXCEPTION CLAUSE OF CBDT CIRCULAR. THE CLARIFICATION IN THE CIRCULAR NO.3/2018 DATED 11.07.2018 WAS MADE VIDE NOTIFICATION DATED 20.08.2018. THE SR. DR COULD BROUGHT THIS FACT TO THE NOTICE OF THE BENCH AT THE TIME OF MAKING SUBMISSION. THUS, THE APPLICATION OF THE REVENUE IS NOT MAINTAINABLE. IN SUPPORT OF HER SUBMISSION, THE AR RELIED UPON THE DECISION OF MUMBAI BENCH IN ACT VS. RAM BUILDERS IN MA NO.04/MUM/2019 DATED 20.03.2019, WHEREIN THE CO-ORDINATE BENCH HELD THAT WHEN NO SUCH REVISED CIRCULAR WAS REFERRED OR PLACED ON RECORD AT THE TIME OF HEARING, HENCE AT LATER STAGE CANNOT BE CONSIDERED. MA NO.26/SRT/2019 IN ITA NO.1829/AHD/2016 M/S.KABIR JEWELS PVT. LTD., (AY 2011-12) 3 5. IN WITHOUT PREJUDICE SUBMISSION, THE LEARNED AR FOR THE ASSESSEE SUBMITS THAT RE-ASSESSMENT PROCEEDINGS WERE INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM ALLEGED EXTERNAL SOURCES I.E. VAT DEPARTMENT WHICH FALLS UNDER THE PURVIEW OF DGGI AND FALLS WITHIN THE EXCEPTION CLAUSE OF CBDT CIRCULAR DATED 20.08.2018. THE AR SUBMITS THAT SUBMISSION OF DR IS NOT TENABLE. THE VAT DEPARTMENT DOES NOT FALL UNDER THE PURVIEW OF DGGI. THE INFORMATION RECEIVED FROM VAT DEPARTMENT MAHARASHTRA DOES NOT FALL WITHIN THE EXCEPTION CLAUSE OF THE SAID CIRCULAR. ALL AGENCIES REFERRED IN THE SAID CIRCULAR OF CBDT (SUPRA) ARE CENTRAL ENFORCEMENT AGENCIES. STATE VAT AUTHORITY DOES NOT COME WITHIN THE PURVIEW OF SUCH CLAUSE AND THE CASE DOES NOT FALL UNDER THE EXCEPTION CLAUSE OF SAID CIRCULAR. IN SUPPORT OF HER SUBMISSIONS THE AR FOR ASSESSEE RELIED UPON THE DECISION OF ITAT PUNE BENCH IN DCIT VS. CHEBBI ELECTRICALS PVT. LTD. IN MA NO. 1/PUNE/2019 DATED 03.06.2019, AND IN ITO VS. PARMAR MARKETING IN ITA NO.1827/PUNE/2019 WHEREIN IT WAS HELD THAT WHEN ADDITIONS ARE ON ACCOUNT OF BOGUS PURCHASES BASED ON INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, THEREFORE APPEALS FALLS OUTSIDE THE SCOPE OF EXCEPTIONS PROVIDED IN CLAUSE 10(E) OF CBDT CIRCULAR. 6. IN OTHER ALTERNATIVE SUBMISSION, THE LEARNED AR FOR ASSESSEE FURTHER SUBMITS THAT IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT, MA NO.26/SRT/2019 IN ITA NO.1829/AHD/2016 M/S.KABIR JEWELS PVT. LTD., (AY 2011-12) 4 THE ASSESSING OFFICER NOWHERE MENTIONED THAT INFORMATION WAS RECEIVED FROM DGGI. ADMITTEDLY, THE ASSESSING OFFICER IN REASONS RECORDED WHICH MENTIONED ON THE BASIS OF INFORMATION RECEIVED FROM VAT DEPARTMENT AND NOTHING ELSE. THE LEARNED AR FOR ASSESSEE SUBMITS THAT MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS LIABLE TO BE DISMISSED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF BOTH THE PARTIES AND PERUSED THE ORDER DATED 16.11.2018. WE HAVE ALSO GONE THROUGH THE CONTENTS OF ASSESSMENT ORDER DATED 23.02.2015 PASSED UNDER SECTION 143(3) R.W.S 147 OF THE ACT. WE FIND THAT THE ASSESSING OFFICER REOPENED THE CASE OF ASSESSEE ON THE BASIS OF INFORMATION RECEIVED FROM DGIT, AHMEDABAD [DIRECTOR GENERAL OF INCOME TAX, AHMEDABAD]. THE SAID INFORMATION WAS BASED ON VAT DEPARTMENT OF MUMBAI. THE AO MADE ADDITION ON THE BASIS OF INFORMATION RECEIVED FROM VAT DEPARTMENT. NOW, BEFORE US, THE SR. DR FOR THE REVENUE VEHEMENTLY SUBMITTED THAT NAME OF ENFORCEMENT AGENCIES MENTIONED IN CBDT CIRCULAR NO.3/2018 DATED 20.08.2018 IN PARA 10( E) IS ILLUSTRATING AND NOT EXHAUSTIVE. A CAREFUL PERUSAL OF PARA 10( E) OF THE SAID CBDT CIRCULAR (SUPRA) REVEALS THAT THE NAME OF CENTRAL LAW ENFORCEMENT AGENCIES I.E. CBI, ED, DRI, SFIO, AND DIRECTORATE OF GST INTELLIGENCE IS MENTIONED. THERE IS NO REFERENCE OF ANY STATE GOVERNMENTS AGENCIES OR DEPARTMENTS SUCH AS MA NO.26/SRT/2019 IN ITA NO.1829/AHD/2016 M/S.KABIR JEWELS PVT. LTD., (AY 2011-12) 5 SALES TAX DEPARTMENT OR VAT DEPARTMENT. ADMITTEDLY IN THE PRESENT CASE, THE REASSESSMENT WAS INITIATED ON THE BASIS OF INFORMATION RECEIVED FROM VAT DEPARTMENT OF MAHARASHTRA. 8. WE HAVE NOTED THAT ALMOST ON SIMILAR SUBMISSION THE CO-ORDINATE BENCH OF PUNE TRIBUNAL IN DCIT VS. CHEBBI ELECTRICALS PVT. LTD., (SUPRA) HELD THAT EXCEPTION MENTIONED IN PARA 10( E) OF CBDT CIRCULAR (SUPRA) DOES NOT COVER INFORMATION RECEIVED FROM SALES TAX DEPARTMENT, HENCE, THE MONETARY AS FIXED BY CBDT TO FILE APPEALS BY THE DEPARTMENT WOULD APPLY FOR THE FACTS OF THAT CASE AND DISMISS THE SIMILAR MISCELLANEOUS APPLICATION. SIMILAR VIEW WAS TAKEN BY SMC BENCH OF PUNE TRIBUNAL IN ITO VS. PARMAR MARKETING (SUPRA). THEREFORE, IN VIEW OF THE AFORESAID FACTUAL AND LEGAL DISCUSSION AND RESPECTFULLY FILING THE DECISION OF CO- ORDINATE BENCH IN DCIT VS. CHEBBI ELECTRICALS PVT. LTD., (SUPRA) AND ITO VS. PARMAR MARKETING (SUPRA), WE DO NOT FIND ANY MERIT IN THE MISCELLANEOUS APPLICATION FILED BY THE REVENUE. 9. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 10 TH FEBRUARY 2021 BY PLACING RESULT IN THE NOTICE BOARD. SD/- SD/- (DR. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER SURAT, DATED: 10 FEBRUARY 2021 SGR MA NO.26/SRT/2019 IN ITA NO.1829/AHD/2016 M/S.KABIR JEWELS PVT. LTD., (AY 2011-12) 6 COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A) ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT