CHAGANLAL PUKHRAJ PARMAR, MUMBAI V. INCOME TAX OFFICER 29(1)(2), MUMBAI

MA 560/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6838 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Bogus purchase; Principle of natural justice; Opportunity of cross examination; Third party statement
• Section: 69C; 143(3); 254(2); 147

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER M.A. NO.560/MUM/2018 (ARISING OUT OF ITA NO.5588/MUM/2016) ASSESSMENT YEAR: 2009-10 SHRI CHAGANLAL PUKHRAJ PARMAR, C501, KUKREJA COMPLEX, BUILDING NO.2, LBS MARG, MULUND(W), MUMBAI-400078 / VS. ITO - 29(1)(2), MUMBAI ( /ASSESSEE) ( / REVENUE) P.A. NO.AGMPP7757P / DATE OF HEARING : 22/02/2019 / DATE OF ORDER: 28/02/2019 / O R D E R PER G. MANJUNATHA (ACCOUNTANT MEMBER) THE ASSESSEE HAS FILED THIS MISCELLANEOUS APPLICATI ON U/S 254(2) OF THE INCOME TAX ACT, 1961 TO RECALL ORDER PASSED BY THE ITAT, MUMBAI D BENCH IN ITA NO.5588/MUM/2016 DATED 28/02/2018 FOR AY 2009-10. / ASSESSEE BY SHRI S.R. LODE / REVENUE BY MS. KUSUM BANSAL - DR 2 MA NO.560/MUM/2018 2. THE ASSESSEE HAS NARRATED FACTS AND MISTAKES ST ATED TO BE APPARENT FROM THE ORDER OF THE ITAT, MUMBAI, DATED 28/02/201 8 IN ITA NO.5588/MUM/2016. THE RELEVANT CONTENTS OF THE MISCELLANEOUS APPLICAT ION FILED BY THE ASSESSEE ARE REPRODUCED HEREUNDER:- I, THE ABOVE NAMED PETITIONER DO HEREBY SEEK PERMI SSION TO FILE THIS MISCELLANEOUS PETITION FOR RECTIFICATION OF MI STAKES APPARENT IN THE ORDER AND RECALLING THE TRIBUNAL ORDER DATED 28.2.2018. 2. THE ASSESSEE SUBMITS THAT THE AO VIDE ORDER DATE D 5.3.2015 HAS PASSED THE ASSESSMENT ORDER AND MADE ADDITION O F RS.2,78,12,020/- UNDER SECTION 69C OF THE INCOME TA X ACT, 1961 ON THE BASIS OF INFORMATION SOUGHT FROM THIRD PARTY , UNDER THE HEAD BOGUS PURCHASES, ASSESSING THE TOTAL INCOME AT RS.2,81,78,280/-. 3. THE ASSESSEE CHALLENGED THIS ADDITION BEFORE THE ID. COMMISSIONER OF INCOME TAX (A). BEFORE THE LD.CIT(A ) THE ASSESSEE HAS CHALLENGED THE RE-OPENING OF ASSESSMEN T UNDER SECTION 143(3) R.W.S.147 AND 148 OF THE ACT. 4. THE ID. CIT(A) ADMITTED IN PARA 6.1 THAT IN THE PRESENT CASE NO SCRUTINY ASSESSMENT U/S 143(3) WAS MADE PRIOR TO IS SUE OF NOTICE U/S 148 OF THE ACT. 5. IN PARA 6.2., THE LD.CIT(A) ADMITTED THAT THE RE -OPENING OF ASSESSMENT WAS MADE ON THE BASIS OF INFORMATION REC EIVED FROM THE STATE SALES TAX DEPARTMENT. 6. THE LD.CIT(A) UPHELD THE RE-OPENING U/S 147 R.W. S.148 OF THE ACT. THE LD.CIT(A) GAVE RELIEF OF 80% BY ADMITTING IN PARA 7.24 THAT THE ENTIRE PURCHASES FROM THESE PARTIES CANNOT BE ADDED AS BOGUS AND WHAT NEEDS TO BE TAXED IS THE PROFIT ELEM ENT IN THE TRANSACTION. MEANING THEREBY THE LD.CIT(A) CONFIRME D PROFIT OF RS.55,62,404/- I.E.20% OF RS.2,78, 12,020/-. 7. THE ASSESSEE CHALLENGED THIS CONFIRMATION AS WEL L AS RE- OPENING OF THE ASSESSMENT U/S 147 R.W.S. 148 OF THE ACT ALONG WITH SEVERAL OTHER GROUNDS BEFORE THE HON'BLE INCOM E TAX APPELLATE TRIBUNAL, MUMBAI. 8. IN ADDITION TO THE ABOVE THE ASSESSEE HAS ALREAD Y DECLARED GP RATE @4.98% AND PAID VAT THEREON. THIS CONTENTIO N IS FORMING PART OF THE HON'BLE TRIBUNAL'S ORDER AT PAR A-2. 9. THE HON'BLE TRIBUNAL VIDE PARA 2.4 RELIED ON THE CASE OF CIT V/S ASHISH INTERNATIONAL LTD (ITA NO.4299/2009) ORD ER DATED 22.2.20 11 OF HON'BLE JURISDICTIONAL HIGH COURT. TH IS DECISION IN 3 MA NO.560/MUM/2018 TACT IS IN FAVOUR OF THE ASSESSEE, BUT THE ADVANTAG E OF THIS DECISION IS NOT GIVEN TO THE ASSESSEE. HERETO TO AN NEXED AND MARKED AS EX-A IS A COPY OF JUDGEMENT AND ORDER DAT ED 22.2.2011 OF HON'BLE JURISDICTIONAL HIGH COURT IN T HE CASE OF CIT V/S ASHISH INTERNATIONAL LTD. 10. THE ASSESSEE SUBMITS THAT THE ASSESSEE HAS TAKE N THE GROUND OF VIOLATION OF PRINCIPLE OF NATURAL JUSTICE AS THE STATEMENT RECOR DED BY THE STATE SALES TAX DEPARTMENT WERE SHOWN TO THE ASSESSEE BUT NOT SHOWN THE PARTIES WHO THEY ARE THEY AND USED THESE STATEMENTS/AFFIDAVITS AGAINST THE ASSESSEE. 11. THE PETITIONER SUBMITS THAT THE FOLLOWING MISTA KES ARE APPARENT IN TRIBUNAL ORDER: A) THE HONBLE ITAT IS BOT DEALT WITH GROUNDS OF RE OPENING ASSESSMENT U/S 147/148 WHICH WAS DUL TAKEN BY ASSES SEE IN ITS GROUNDS OF APPEAL B) VIOLATION OF PRINCIPLE OF NATURAL JUSTICE BY NOT PROVIDING OPPORTUNITY TO THE ASSESSEE TO CONTRADICT THE STATE MENT OF HAWALA OPERATORS AND ONLY SHOWN STATEMENT/AFFIDAVIT AND US ED AGAINST THE ASSESSEE; C) THE DECISION IN THE CASE OF CIT V/S ASHISH INTER NATIONAL LTD (ITA NO.4299/2009) ORDER DATED 22.2.2011 CLEARLY HE LD THAT THE ASSESSEE WAS NOT GIVEN OPPORTUNITY TO CROSS EXAMINE . THEREFORE, THE BENEFIT OF THIS JUDGMENT WAS TO BE GIVEN TO THE ASSESSEE; D) THE ASSESSEE VIDE WRITTEN STATEMENT DATED 28.2.2 018 HAS SUBMITTED TRUE FACTS AND ALSO RELIED ON THE VARIOUS CASE LAWS BUT NOT INCORPORATED IN THE TRIBUNAL ORDER AND ASSESSEE SUBMISSION IS NOT CONSIDERED BY HONRABLE ITAT; E) THE ASSESSEE ALSO PAID VAT ON PURCHASES BUT THIS ISSUE REMAINED TO BE ADJUDICATED. 12. THE ASSESSEE SUBMITS THAT THE HONB'LE TRIBUNAL THESE ARE THE IMPORTANT ASPECTS WHICH ARE TO BE TAKEN INTO CONSID ERATION AND HENCE THESE MISTAKES ARE TO BE RECTIFIED BY RECALLI NG THE TRIBUNAL ORDER AND ADJUDICATION THEREON. 13. THE PETITIONER IN SUPPORT OF THIS SUBMISSION WO ULD LIKE TO REFER AND RELY ON I) THE DECISION OF HON'BIE SUPREME COURT IN THE CAS E OF HONDA SIEL POWER PRODUCTS LTD. V. CIT (2007) 213 CTR 425 (SC) I (2007) 295 ITR 466 (SC), WHEREIN THE HON'BLE SUPREM E COURT HELD THAT - RECTIFICATION UNDER S. 254(2) - OMISSIO N TO CONSIDER ORDER OF CO-ORDINATE BENCH - THE PURPOSE BEHIND ENA CTMENT OF S. 254(2) IS BASED ON THE FUNDAMENTAL PRINCIPLE THAT N O PARTY APPEARING BEFORE THE TRIBUNAL SHOULD SUFFER ON ACCO UNT OF ANY MISTAKE COMMITTED BY THE TRIBUNAL - THIS FUNDAMENTA L PRINCIPLE HAS NOTHING TO DO WITH THE INHERENT POWERS OF THE T RIBUNAL - RULE 4 MA NO.560/MUM/2018 OF PRECEDENT IS AN IMPORTANT ASPECT OF LEGAL CERTAI NTY IN THE RULE OF LAW - THIS PRINCIPLE IS NOT OBLITERATED BY S. 254(2 ) - THEREFORE, TRIBUNAL WAS JUSTIFIED IN EXERCISING ITS POWERS UND ER S. 254(2) WHEN IT WAS POINTED OUT THAT AN ORDER OF THE CO-ORD INATE BENCH PLACED BEFORE THE TRIBUNAL WAS NOT CONSIDERED BY IT WHILE PASSING THE ORIGINAL ORDER. HERETO EXHIBIT AND MARKED AS AN NEXURE-B IS THE COPY OF JUDGEMENT IN THE CASE OF HONDA SIEL POW ER PRODUCTS LTD. (SUPRA). II) THE DECISION IN THE CASE OF COMMISSIONER OF INC OME TAX VS RAMESH CHAND MODI ON 4 JULY, 2000 [(2000) 163 CTR R AJ 424 / (2001) 249 ITR 323 (RAJ)] WHEREIN VIDE PARA 8 TO 9 IT HAS BEEN HELD THAT IF THE TRIBUNAL HAS NOT DECIDED THE ISSUE S RAISED BEFORE IT, THEN U/S 254 (2) OF THE ACT, THE TRIBUNAL CAN R ECALL ITS ORDER AND REHEAR THE MATTER AFRESH AFTER GIVING OPPORTUNITY T O THE EITHER PARTY. HERETO EXHIBIT AND MARKED AS ANNEXURE- C. III) THE DECISION OF THIS HON'BLE TRIBUNAL IN THE C ASE OF M/S DHARMA PRODUCTIONS PVT. LTD., V/S DCIT IN MA NO.421/MUM/2014 ARISING OUT OF I.T.A. NO.2481/MUM/2 013 FOR THE AY 2007-08, ORDER DATED 13.2.2015 HAS RECALLED THE ORDER OF TRIBUNAL WHEREIN WHILE DECIDING THE ORIGINAL APPEAL DID NOT DECIDE THE GROUND NO. 2 AND HENCE RECALLED THE ORDER DATED 29.10.2014 AND AGAIN DECIDED THE ORIGINAL APPEAL ON MERIT. THE RELEVANT OBSERVATIONS AND FINDINGS OF THE TRIBUNAL ARE AS UN DER: '2. WE HEARD THE PARTIES AND PERUSED THE ORDER. WE NOTICE MERIT IN THE PRESENT PETITION FILED BY THE ASSESSEE AS WE NOTICE THAT THE TRIBUNAL HAS NOT DISPOSED OF THE GROUND NO.2 URGED BY THE ASSESSEE IN THE APPEAL FILED FOR ASSESSMENT YEAR 20 07-08. 3. ACCORDINGLY, WE ALLOW MISC. APPLICATION FILED BY THE ASSESSEE.' HERETO EXHIBIT AND MARKED AS ANNEXURE-D IS A COPY O F TRIBUNAL ORDER DATED 13.2.2015 PASSED IN THE CASE OF M/S DHA RMA PRODUCTIONS PVT. LTD (SUPRA). IV) COPY OF THE ORDER PASSED IN MA NOS.162 & 163/M/ 2018 (ARISING OUT OF ITA NOS.4485 & 4486/M/2016) ASSESSM ENT YEARS: 2009-10 & 2010-11 SHRI JAYPRAKASH D. BARBHAYA V/A C IT, WHEREIN THE TTRIBUNAZI HAS RECALLED ITS ORDER REGAR DING NON- ADJUDICATION OF ISSUE OF REOPENING OF ASSESSMENT. H ERETO ANNEXED AND MARKED AS EX-E. 14. THE PETITIONER-ASSESSEE PRAYS FOR RECALLING THE TRIBUNAL ORDER DATED 28.2.2018 ON THE FOLLOWING GROUNDS . THE ASSESSEE THEREFORE PRAYS THAT: A) THE MISCELLANEOUS APPLICATION FILED BY THE ASSES SEE FOR RECALLING THE TRIBUNAL ORDER DATED 28.2.2018 BE ALL OWED; B) THE ASSESSEE BE GIVEN AN ADVANTAGE OF CREDIT OF EXISTING GP AND VAT FROM 12.5%; 5 MA NO.560/MUM/2018 C) ANY CONSEQUENTIAL ORDER MAY BE PASSED AS THIS HO N'BLE TRIBUNAL MAY DEEM FIT AND PROPER IN THE FACTS AND C IRCUMSTANCES OF THE CASE. D) THE APPELLANT CRAVE LEAVE TO ADD, ALTER, MODIFY, AMEND AND /OR DELETE ANY OF THE PRAYER MADE IN THE APPLICATION. 3. WE HAVE HEARD BOTH OF PARTIES AND PERUSED THE M ISCELLANEOUS APPLICATION FILED BY THE ASSESSEE ALONG WITH ORDER OF THE TRIBUNAL IN ITA NO.5588/MUM/2016, DATED 28/02/2018, FOR AY 2009-10. WE FIND THAT THE TRIBUNAL HAS DECIDED THE APPEAL FILED BY THE ASSESSEE ON MER IT AND SCALED DOWN PROFIT ESTIMATED BY THE LD. CIT(A) ON ALLEGED BOGUS PURCHA SES FROM 20% TO 12.5% BY CONSIDERING ARGUMENTS ADVANCED BY BOTH SIDES AND AL SO BY RELIED UPON VARIOUS DECISIONS OF CO-ORDINATE BENCH, WHERE ITAT, MUMBAI BENCH, IN NUMBER OF CASES HAS TAKEN CONSISTENT VIEW TO DIRECT THE AO TO ESTIM ATE 12.5% PROFIT ON ALLEGED BOGUS PURCHASES. HOWEVER, THE TRIBUNAL HAS NOT ADJUDICAT ED OTHER GROUNDS TAKEN BY THE ASSESSEE CHALLENGING THE REOPENING OF ASSESSMENT U/ S 147 R.W.S. 148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT), EVEN THOUGH THE ASSESSEE HAS TAKEN SPECIFIC GROUND VIDE GROUND NO.1 AND 2 OF GROUNDS OF APPEAL FILED ALONG WITH FORM NO.36. WE FURTHER NOTICED THAT THE ASSESSEE ALSO CHALLENGE D VIOLATION OF PRINCIPLE OF NATURAL JUSTICE ON THE GROUND THAT ADDITION HAS BEEN MADE B ASED ON THIRD PARTY STATEMENT, WITHOUT PROVIDING OPPORTUNITY TO THE ASSESSEE TO CO NTRADICT STATEMENT OF HAWALA OPERATORS. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT NON-CONSIDERATION OF SPECIFIC GROUND TAKEN BY THE ASSESSEE CHALLENGING R EOPENING OF ASSESSMENT AND NON-ADJUDICATION OF GROUND RELATING TO VIOLATION OF PRINCIPLE OF NATURAL JUSTICE 6 MA NO.560/MUM/2018 CONSTITUTES MISTAKE APPARENT ON RECORD WHICH CAN BE RECTIFIED U/S 254(2) OF THE ACT. ACCORDINGLY, WE RECALLED ORDER PASSED BY ITAT IN IT A NO.5588/MUM/2016 FOR AY 2009-10 AND DIRECT THE REGISTRY TO FIX THE CASE FOR HEARING IN DUE COURSE WITH INTIMATION TO EITHER SIDE. 4. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/02/2019. SD/- SD/- ( MAHAVIR SINGH ) (G. MANJUNATHA) ! ' /JUDICIAL MEMBER # ' / ACCOUNTANT MEMBER MUMBAI; DATED : 28/02/2019 F{X~{T? F{X~{T? F{X~{T? F{X~{T? P.S P.S P.S P.S / /. /./. /. !.. %!&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT (RESPECTIVE ASSESSEE) 2. '#$ ! / THE RESPONDENT. 3. %$ %$ & ( ) / THE CIT, MUMBAI. 4. %$ %$ & / CIT(A)- , MUMBAI, 5. ()*$ ' + , %$ $ + - , / DR, ITAT, MUMBAI 6. * . / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI