M/s. M.M. Impex, Delhi v. ITO, New Delhi

ITA 1186/DEL/2016 | 2006-2007
Pronouncement Date: 28-09-2016 | Result: Allowed

Appeal Details

RSA Number 118620114 RSA 2016
Assessee PAN AADGM0316C
Bench Delhi
Appeal Number ITA 1186/DEL/2016
Duration Of Justice 6 month(s) 25 day(s)
Appellant M/s. M.M. Impex, Delhi
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 28-09-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC 3
Tribunal Order Date 28-09-2016
Date Of Final Hearing 20-09-2016
Next Hearing Date 20-09-2016
Assessment Year 2006-2007
Appeal Filed On 04-03-2016
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC - 3 NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER ITA NO. 1186 /DEL/201 6 AY: 20 06 - 07 MM IMPEX VS. ITO WARD 20(3) E 10 CC COLONY NEW DELHI DELHI 110 007 PAN: AADGM 0316 C (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJ KUMAR GUPTA C.A. RESPONDENT BY : SH. ANIL SHARMA SR.D.R ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDERS OF THE LD. COMMISSIONER OF I NCOME T AX (A PPEALS ) - 12 NEW DELHI DATED 31.12. 2015 FOR THE A SSESSMENT Y EAR (A.Y. 2006 - 07). 2. FACTS IN BRIEF: - THE ASSESSEE IS AN INDIVIDUAL. HE FILED HIS RETURN OF INCOME ON 09 . 06 . 2006 DECLARING INCOME OF RS. 1 05 525/ . THE ASSESSEE HAD MADE PURCHASES OF BRASS SCRAP FROM M/S O M A GENCIES FOR RS. 9 03 020/ AND R S. 9 64 5 33/ . A SEARCH AND SEIZURE OPERATION WAS CONDUCTED AT THE OFFICE AND RESIDENTIAL PREMISES OF SH. RAKESH AND SH. V IS HESH GUPTA OF M/S OM AGENCIES . DURING THE COURSE OF SEARCH STATEMENTS WERE RECORDED AND BOTH THESE PERSONS ADMITTED THAT THEY W ERE IN THE BUSINESS OF ISSUING BOGUS PURCHASE BILLS ACCOMMODATION ENTRY BILLS T O THE INTERESTED PARTIES CHEQUES WERE RECEIVED FROM THEM AND THEREAFTER CASH WAS WITH DRAWN AFTER CLEARANCE OF THE CHEQUES . ON RECEIPT OF SUCH INFORMATION FROM ACIT CENTRA L CIRCLE 10 NEW DELHI THE A SSESSING O FFICER (A.O.) ISSUED NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT 1961 (THE ACT) AFTER RECORDING REASONS FOR REOPENING. THE ASSESSEE FILED A LETTER DATED 09 . 05 . 2013 STATING THAT THE RETURN FILED ON 2 09 . 06 . 2006 BE TREATED AS A RETURN FILED IN RESPONSE TO THE NOTICE. THE A.O. DETERMINE D THE TOTAL INCOM E OF THE ASSESSEE AT RS. 19 82 4 16/ INTER ALIA ADDING THE PURCHASES OF RS. 18 67 553 / - FROM O M A GENCIES AS NON - GENUINE. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL WITHOUT SUCCESS. FURTHER AGGRIEVED THE ASSESSEE IS BEFORE ME. 3. THE LD. C OUNSEL FOR THE ASSESSEE SHRI RAJ KUMAR GUPTA CONTENDED THAT THE PURCHASES WERE GENUINE AND IN PROOF OF THE SAME HE DREW THE ATTENTION TO PURCHASE INVOICE STOCK REGISTER COR RESPONDING SALES LEDGER ACCOUNTS BANK STATEMENT OF ASSESSEE PURCHASE DETAILS FILED WITH VAT DEPARTMENT AND VAT RETURNS AND SUBMITTED THAT THE AO HAS NOT POINTED OUT ANY DISCREPANCY IN THESE RECORDS. THE LD. C COUNSEL POINTED OUT THAT SALES C ANNOT TAKE PLACE WITHOUT PURCHASES AND THE A.O. HAD ACCEPTED THE SALES. IT IS FURTHER SUBMITTED THAT NEITHER SH. RAKESH OR SH. VISHESH GUPTA HAVE STATED THAT THE SALES TO THE ASSESSEE ARE BOGUS AND THAT THEY ADMITTED THAT 5% OF THE SALES ARE GENUINE WIT HOUT SPECIFYING WHICH OF THE SALES ARE GENUINE. HE R ELIED ON THE FOLLOWING CASE LAWS AND SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE. (I) CIT VS. LEADERS VALVES (P) LTD. 285 ITR 435 (P&H) (II) SUMESH AGARWAL (DELHI ITAT) ORDER DT. 11.9.20 15 FOR A.Y. 2006 - 07 SMC - 2. 4. HE FURTHER CONTENDED THAT THE STATEMENTS WERE TAKEN AT THE BACK OF THE ASSESSEE AND THE RE QUEST FOR CROSS EXAMINATION NOT PROVIDED. HE CHALLENGED THE REOPENING ON THE GROUND THAT THE AO HAS NOT APPLIED HIS MIND TO THE INFORMAT ION RECEIVED FROM THE INVESTIGATION WING. HE CHALLENGED THE APPROVAL GIVEN BY THE A DDITIONAL COMMISSIONER UNDER SECTION 151 OF THE A CT AS WITHOUT APPLICATION OF MIND. HE PRAYED FOR RELIEF. 5. SHRI AMRIT LAL THE LD.SR.D EPARTMENTAL R EPRESENTATIVE ON THE OTHER HAND RELIED ON THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT A CATEGORICAL 3 STATEMENT WAS MADE BY SH. RAKESH AND SH. V IS HESH GUPTA THAT THEY HAVE ISSUED BOGUS ENTRIES. HE SUBMITTED THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THESE TRANSACTIONS. HE CONTENDED THAT THE A.O. ON RECEIPT OF INFORMATION FROM A DDITIONAL CIT CENTRAL CIRCLE HAD APPLIED HIS MIND WHILE RECOR DING REASONS AND THEREAFTER ISSUED NOTICE UNDER SECTION 148 OF THE ACT . HE POINTED OUT THAT SUMMONS WERE ISSUED TO O M A GENCIES BY THE AO BUT THERE WAS NO RESPONSE. HE ARGUED THAT THE BURDEN OF PROOF LIES ON THE ASSESSEE AND THAT THIS IS NOT DISCHARGED. HE RELIED ON THE DECISION OF THE HON BLE DELHI HIGH COURT IN THE CASE OF CIT V S. LA - MEDICA (2001) 25 0 ITR 575 DELHI. 6. AFTER HEARING RIVAL CONTENTIONS I FIND THAT THIS BENCH OF THE T RIBUNAL IN ITA NO. 1034/DELHI / 2015 IN THE CASE OF SHRI SUMESH AGARWAL V IDE ORDER DATED 11 . 09 . 2015 AT PARAGRAPH 3 HELD AS FOLLOWS: AFTER HEARING RIVAL CONTENTIONS I AM OF THE CONSIDERED OPINION THAT THIS DISALLOWANCE CANNOT BE SUSTAINED AS THE PAYMENTS IN QUESTION TO O M A GENCIES IS MADE THROUGH ACCOUNT PAYEE CHEQUES. THE A SSESSEE PRODUCE D THE TAX INVOICE OF O M A GENCIES COPIES OF THE PURCHASE REGISTER RECORDING THE PURCHASES COPIES OF THE STOCK REGISTER AFTER GIVING ITEM WISE AND QUANTITY WISE IN WARD AND OUTWARD STOCK COPIES OF BANK ACCOUNT EVIDENCING TRANSFER OF FUNDS THROUGH BANKING CHANNELS. COPIES OF TAX INVOICE IS GIVEN BY THE ASSESSEE AND COPIES OF SALES REGISTER COPIES OF BANK STATEMENT EVIDENCING SALE OF THESE STOCKS WHICH WERE PURCHASED FROM M / S O M A GENCIES EVIDENCE OF TRANSPORTATION IS ALSO FILED BEFORE ME. THE ASSESSEE HAS NOT BEEN GIVEN AN OPPORTUNITY TO CROSS EXAMINE THE REVENUE S WITNESSES SH. RAKES H GUPTHA AND SH. VISESH GUPTHA AND HENCE THE IR STATEMENTS CANNOT BE RELIED UPON. IN ANY EVENT THIS DISALLOWANCE U/S 40A(3) CANNOT BE MADE ON THE AS SUMPTION THAT THE PURCHASES SHOULD HAVE BEEN MADE IN CASH. TAKING THE TOTAL ITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE I AM OF THE CONSIDERED OPINION THAT THE DISALLOWANCE IN QUESTION HAS TO BE DELETED AND THE APPEAL OF THE ASSESSEE BE ALLOWED 4 7. IN THE CASE ON HAND ALSO THE ENTIRE ADDITION IS BASED ON THE STATEMENTS OF SH. RAKESH GUPTHA AND SH.VISHESH GUPTA. THE ASSESSEE HAS NOT BEEN GIVEN ANY OPPORTUNITY TO CROSS EXAMINE THESE PERSONS. HENCE THE STATEMENTS GIVEN BY THEM CANNOT BE TAKEN AS EVIDE NCE IN THE PRESENT CASE. THE ASSESSEE HAS PRODUCED SALES INVOICES OF OM AGENCIES FOR BOTH THESE PURCHASES THE CORRESPONDING SALES INVOICES ISSUED BY THE ASSESSEE ON 27 .2. 200 6 AND 02 . 03 . 2006. THE ASSESSEE FURNISHED DVAT - 30 I.E. PURCHASE INFORMATION FIL ED TO VAT DEPARTMENT VAT RETURNS AND DETAILS OF BANK PAYMENTS IN SUPPORT OF HIS CLAIM OF PURCHASES . I N MY VIEW THE ASSESSEE HAS DISCHARGED THE BURDEN OF PROOF THAT LAY ON HIM. THE CONTENTION OF THE ASSESSEE IS THAT THE PURCHASES ARE OUT OF THE 5% GENUI NE SALES OUT OF BILLS ISSUED BY O M A GENCIES. THIS IS A CASE WHERE THE SALES OF THESE GOODS HAVE BEEN ACCEPTED BY THE REVENUE. UNDER THE CIRCUMSTANCES THE ADDITION OF THE ENTIRE AMOUNT OF RS. 18 67 553/ IN MY VIEW IS UNJUSTIFIED THE CONSEQUENTIAL ADDITI ON OF RS. 9 338/ IS ALSO NOT JUSTIFIED. IN THE RESULT I DELETE TH ESE ADDITION S AND ALLOW THIS APPEAL OF THE ASSESSEE. 6 . IN THE RESULT THE APPEAL BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH S EPTEMBER 2016. SD/ - (J. SUDHAKAR REDDY) ACCOUNTANT MEMBER DATED: THE 28 TH SEPTEMBER 2016 M ANGA 5 COPY FORWARDED TO: - 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ITAT - TRUE COPY - BY ORDER ASSISTANT REGISTRAR