M/s Gopinath Gems, Surat V. The Income Tax Officer, Ward-3(3)(1), Surat

SA 64/SRT/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8878 (ITAT-SURAT)
• Duration Of Justice: 9 month(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 01-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MEHUL R SHAH
• Keywords: Bogus purchase; Application of stay; Reasonable cause

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER S.A NOS.64 TO 70/SRT/2018 (ARISING IN ITA NOS.637, 624, 626, 627, 628 & 629/SRT/2018) / ASSESSMENT YEARS: 2008-09 TO 2014-15 M/S. GOPINATH GEMS, 201, SIDDHANRTH COMPLEX HIRA BAUG, VARACHHA ROAD, SURAT 395 006. [PAN: AAHFG 5845L] VS. INCOME TAX OFFICER, WARD-3(3)(1), SURAT. ( / APPELLANT) ( !' /RESPONDENT) / ASSESSEE BY : SHRI MEHUL R. SHAH, C.A /RESPONDENT BY : SHRI VINOD KUMAR, SR. D.R /DATE OF HEARING : 26-10-2018 /DATE OF PRONOUNCEMENT : 26-10-2018 / ORDER PER C.M.GARG, JUDICIAL MEMBER: THESE SEVEN STAY PETITIONS HAVE BEEN FILED SEEKING STAY OF DEMAND OF RS. 40,550/- FOR AY 2008-09, RS. 5,67,750/- FOR AY 2009-10, RS. 7,17,162/- FOR AY 2010-11, RS. 4,06,230/- FOR AY 2011-12, RS. 4,49 ,045/- FOR AY 2012-13, RS. 8,95,540/- FOR AY 2013-14 & RS. 7,55,690/- FOR AY 2014-15. 2. WE HAVE HEARD THE ARGUMENTS OF THE BOTH SIDES AN D CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE ASSESSEE PAI D MORE THAN 50% OF TOTAL 2 S.A NOS.64 TO 70 /SRT/2018 M/S. GOPINATH GEMS OUTSTANDING DEMAND PERTAINING TO ALL SEVEN AYS THER EFORE, STAY OF REMAINING OUTSTANDING DEMAND MAY KINDLY BE GRANTED TO THE ASS ESSEE. 3. THE LD. AR SUBMITTED THAT THE LD. CIT(A) HAS GRA NTED PART RELIEF TO THE ASSESSEE, WHEREIN HE HAS RESTRICTED THE DISALLOWANC E ON ACCOUNT OF ALLEGED BOGUS PURCHASES FROM 25% TO 12.5% OF TOTAL PURCHASE S AGAINST WHICH THE ASSESSEE HAS FILED THESE APPEALS HAVING PRIMA FACIE CASE IN FAVOUR OF THE ASSESSEE. THE LD. AR SUBMITTED THAT AS PER DECISIO N OF HON'BLE DELHI HIGH COURT IN THE CASE OF VALVOLINE CUMMINS LTD. VS. DCI T REPORTED IN 307 ITR 103 (DEL.), WHERE IT WAS HELD THAT IF THE ASSESSMENT IS MORE THAN 8 TIMES THE RETURNED INCOME, ABSOLUTE STAY SHOULD BE GRANTED. 4. REPLYING TO THE ABOVE, THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) STRONGLY OPPOSED TO THE STAY OF RECOVERY OF OUTSTAN DING DEMAND AND SUBMITTED THAT THERE ARE CONCURRENT FINDING OF AO A ND LD. CIT(A) AND THERE IS NO SCOPE OF ANY FURTHER RELIEF FOR THE ASSESSEE. TH EREFORE, STAY CANNOT BE GRANTED AGAINST RECOVERY OF OUTSTANDING DEMAND AS T HE LD. CIT(A) HAS ONLY RESTRICTED THE ADDITION FROM 25% TO 12.5% AND IT IS NOT A CASE, WHERE THE ASSESSMENT IS MORE THAN 8 TIMES OF THE RETURNED INC OME THEREFORE, THE BENEFIT OF THE RATIO OF DECISION OF HON'BLE HIGH COURT OF D ELHI (SUPRA) CANNOT BE GRANTED TO THE ASSESSEE . THE LD. DR SUBMITTED THAT IF IT IS FOUND JUST AND PROPER THEN, ASSESSEE MAY KINDLY BE DIRECTED TO PAY SOME ADDITIONAL PART OF OUTSTANDING DEMAND FOR GRANT OF SHORT TERM STAY. 5. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS, FIRST OF ALL, WE MAY OBSERVE THAT THE LD. DR HAS NOT DISPUTED THE FACT T HAT THE ASSESSEE HAS PAID 3 S.A NOS.64 TO 70 /SRT/2018 M/S. GOPINATH GEMS MORE THAN 50% AMOUNT OF TOTAL OUTSTANDING DEMAND IN ALL SEVEN ASSESSMENT YEARS BUT FOR THE PAYMENT OF OUTSTANDING DEMAND THE SE ASSESSMENT YEARS HAS TO BE TAKEN CARE INDEPENDENTLY AND THE AY IN WH ICH SUBSTANTIAL PAYMENT HAS BEEN MADE NO FURTHER PAYMENT FOR GRANT OF STAY IS REQUIRED BUT IN THE AYS WHERE THE ASSESSEE HAS NOT PAID SUFFICIENT PART OF OUTSTANDING DEMAND THEN, THE STAY IS REQUIRED TO BE GRANTED ONLY AFTER SUFFI CIENT PART PAYMENT OUT OF OUTSTANDING DEMAND. THE AO MADE ADDITION ON THE ALL EGATION OF BOGUS PURCHASES WHICH WAS REDUCED FROM 25% TO 12.5% BY TH E LD. CIT(A) AND THE ASSESSEE IS FURTHER CHALLENGING THE ADDITION CONFIR MED BY THE LD. CIT(A) IN THESE APPEALS. WE ARE NOT REQUIRED TO ADJUDICATE TH E ISSUE IN DETAIL ON MERITS HOWEVER, WE FIND THAT THE ASSESSEE AS A PRIMA FACIE ARGUABLE CASE AND HAS PAID SUBSTANTIAL PORTION OF OUTSTANDING DEMAND. T HEREFORE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS A GOOD ARG UABLE PRIMA FACIE CASE AND LOOKING INTO THE ENTIRE FACTS AND CIRCUMSTANCES , WE FIND IT APPROPRIATE TO GRANT STAY AGAINST OUTSTANDING DEMAND FOR A PERIOD OF SIX MONTHS FROM TODAY OR TILL DISPOSAL OF RELEVANT APPEALS, WHICHEVER IS EARLIER, ON FOLLOWING TERMS AND CONDITIONS: I) SINCE, FROM AY 2009-10 TO 2012-13, THE ASSESSEE HAS PAID SUBSTANTIAL PART OF OUTSTANDING DEMAND BUT IN THE O THER YEARS PART PAYMENT IS NOT SUFFICIENT. THEREFORE, WE DIREC T THE ASSESSEE TO DEPOSIT RS. 3,40,550/- ON OR BEFORE 15 TH , NOVEMBER, 2018 AS MENTIONED BELOW; A) FOR AY 2008-09 RS. 40,550/- B) FOR AY 2013-14 RS. 1,00,000/- C) FOR AY 2014-15 RS. 2,00,000/- II) THE ASSESSEE SHALL NOT SEEK ADJOURNMENTS WITHOU T ANY GOOD, BONAFIDE AND REASONABLE CAUSE IN THE MAIN REL EVANT APPEALS; 4 S.A NOS.64 TO 70 /SRT/2018 M/S. GOPINATH GEMS III) THE APPEAL OF THE ASSESSEE WILL BE HEARD BEFOR E REGULAR BENCH ON 26.11.2018 ON SUBMITTING PROOF OF PAYMENT OF RS. 3,40,550/- ON OR BEFORE 15 TH NOVEMBER, 2018. 5. IN THE RESULT, ALL THE STAY APPLICATIONS OF THE ASSESSEE ARE ALLOWED ON THE AFORESAID TERMS AND CONDITIONS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 6 TH OCTOBER, 2018. SD/- SD/- / SURAT ; DATED : 26 TH OCTOBER, 2018 EDN ! $ / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. # ( ) / THE CONCERNED CIT(A); 4. THE CONCERNED PRL. CIT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . ( ) (O.P.MEENA) / ACCOUNTANT MEMBER ( ) (C.M.GARG) / JUDICIAL MEMBER