SHEELA ROSHANLAL OHRI, MUMBAI v. ITO WD 20(3)(2), MUMBAI

ITA 1662/MUM/2014 | 2005-2006
Pronouncement Date: 21-10-2016 | Result: Allowed

Appeal Details

RSA Number 166219914 RSA 2014
Assessee PAN AAAPO1749G
Bench Mumbai
Appeal Number ITA 1662/MUM/2014
Duration Of Justice 2 year(s) 7 month(s) 12 day(s)
Appellant SHEELA ROSHANLAL OHRI, MUMBAI
Respondent ITO WD 20(3)(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 28-10-2016
Assessment Year 2005-2006
Appeal Filed On 10-03-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI . . BEFORE SHRI R.C.SHARMA AM AND SHRI AMARJIT SINGH JM / I.T.A. NO.1662/MUM/2014 ( / ASSESSMENT YEAR: 2005-06) SHEELA ROSHANLAL OHRI CRYSTAL SHOPPERS PARADISE SHOP NO.32 GROUND FLOOR 33 RD AND 24 TH ROAD JUNCTION OFF. BANDRA LINKING ROAD BANDRA (WEST) MUMBAI - 400050 / VS. INCOME TAX OFFICER WARD 20 (3)(2) PIRAMAL CHAMBERS PAREL MUMBAI - 400012 ./ ./PAN/GIR NO. : AAAPO1749G ( /APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 15.09.2016 / DATE OF PRONOUNCEMENT : 28.10.2016 / O R D E R PER AMARJIT SINGH JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 17.01.2014 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 31 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y.2005-06. ASSESSEE BY: SHRI ISHWER PRAKASH RATHI DEPARTMENT BY: VIKRAM BATRA ITA NO.1662/M/2014 A.Y. 2005-06 2 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF RS.45 27 573/- OUT OF TOTAL PURCHASES MADE BY THE APPELLANT DURING THE RELEVANT PERIOD AMOUNTING TO RS.12 34 63 618/-. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 29.10.2005 DECLARING TOTAL INCOME TO THE TUNE OF RS.3 38 460/-. THE RETURN OF THE INCOME WAS ACCOMPANIED BY COMPUTATION OF INCOME AUDITED BALANCE SHEET PROFIT AND LOSS ACCOUNT AND AUDIT REPORT U/S.44AB OF THE INCOME TAX ACT 1961 ( IN SHORT THE ACT) IN THE FORM OF 3CB AND CD. THE ASSESSEE IS ENGAGED IN MANUFACTURING TRADING AND EXPORTS OF READYMADE GARMENTS. ASSESSMENT WAS COMPLETED U/S.143(3) OF THE ACT DETERMINING TOTAL INCOME TO THE TUNE OF RS.4 69 22 380/-. THE MAIN ADDITION MADE IN THE ORDER ON ACCOUNT OF BOGUS PURCHASES OF RS.4 34 40 500/-. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) VIDE ITS ORDER DELETED THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER. THE REVENUE HAS PREFERRED AN APPEAL BEFORE THE ITAT AND THE ITAT VIDE ORDER NO. ITA NO.5293/M/2008 DATED 19.01.2010 SET ASIDE THE ORDER OF THE CIT(A) AND RESTORED THE MATTER TO THE ASSESSING OFFICER. IN THE ORIGINAL ASSESSMENT ORDER THE ASSESSING OFFICER HAS CAME TO THE CONCLUSION THAT OUT OF PURCHASE BILLS OF RS.4 34 40 500/- THE PURCHASE BILL OF RS.1 56 78 639/- ARE PERTAINING TO THE EARLIER YEARS. THE ITA NO.1662/M/2014 A.Y. 2005-06 3 ASSESSEE WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING THEREFORE IT IS MANDATORY ON THE PART OF THE ASSESSEE TO OFFER THE SAME IN THE EARLIER YEAR I.E.2004-05. THE ASSESSEE EXPLAIN THAT THE PURCHASES WERE MADE IN THE EARLIER YEAR COULD BE ACCOUNTED IN THE SUBSEQUENT YEAR AFTER DUE VERIFICATION WHICH WERE GENERAL PRACTICE IN TRADE. AFTER THE REMAND OF THE CASE THE ASSESSING OFFICER DISALLOWED THE PURCHASE FROM THE SIX PARTIES ON ACCOUNT OF NON-SERVICE OF THE NOTICE U/S.133(6) OF THE ACT. THE PURCHASE TO THE TUNE OF RS.45 27 573/- WAS TREATED AS UNEXPLAINED AND ADDED TO THE INCOME OF THE ASSESSEE. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE THEREFORE THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMENTS ADVANCED BY THE LEARNED REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE CIT(A) HAS WRONGLY CONFIRMED THE DISALLOWANCE OF RS 45 27 573/- OUT OF THE PURCHASES MADE BY THE APPELLANT DURING THE RELEVANT PERIOD AMOUNTING TO RS.12 34 63 618/-.HOWEVER ON THE OTHER HAND LD REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. THE PRESENT APPEAL BEFORE US IS THE SECOND ROUND OF APPEAL BY THE PARTIES. THE ONLY DISPUTE IS IN CONNECTION WITH THE CONFIRMATION OF RS.12 34 63 618/-. THE REASONS WHICH HAS BEEN MENTIONED BY THE CIT(A) FOR DECLINING THE CLAIM AS FOLLOWS:- ITA NO.1662/M/2014 A.Y. 2005-06 4 NOW COMING TO THE ISSUE REGARDING THE PURCHASES OF RS.45 25 573/- I FIND THAT THESE PERTAIN TO 6 PARTIES NAMELY M/S.DEOKIRAN AGENCIES M/S.GROWWEL ASSOCIATES M/S.TEAM WORK KNIT M/S.VARDHAMAN SPINNING MILLS AND M/S.A.M.TEX FROM WHOM THE A.O. SOUGHT BUT RECEIVED NO CONFIRMATION DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. DURING THE FRESH ASSESSMENT PROCEEDINGS THE A.O. HAD CALLED FOR INFORMATION AGAIN BUT NOTED THAT REQUIRED INFORMATION / CONFIRMATION WAS NOT RECEIVED. FURTHER THE ORIGINAL ASSESSMENT ORDER AS WELL AS THE IMPUGNED ASSESSMENT ORDER AND REMAND REPORT RECEIVED MAKE IT QUITE APPARENT THAT IT IS THE PRACTICE OF THE APPELLANT THAT WHEN PURCHASES WERE MADE THE BILLS RELATING THERETO WERE OFTEN NOT IN THE NAME OF THE APPELLANT BUT IN THE NAME OF ITS SISTER CONCERNS AND THE PAYMENTS FOR THESE PURCHASES WERE ALSO MADE BY THE SISTER CONCERNS AND THE PAYMENTS FOR THESE PURCHASES WERE ALSO MADE BY THE SISTER CONCERNS DIRECTLY TO THE SELLERS. THE APPELLANT THEREAFTER MADE PAYMENTS TO ITS SISTER CONCERNS. THE APPELLANT HAS SUBMITTED THAT THE FACT THAT THE OPENING BALANCES OF PARTIES FROM WHOM THESE PURCHASES WERE MADE WAS EITHER NIL OR AN AMOUNT RELATING TO OTHER BILLS SHOWS THAT THE PURCHASES WERE NOT ENTERED OR TAKEN INTO ACCOUNT IN THE PRECEDING YEAR. HOWEVER IN SUCH CIRCUMSTANCES GIVEN THE ABSENCE OF A STOCK REGISTER IT IS VERY DIFFICULT TO CORRELATE WHETHER THE PURCHASES IN QUESTION WERE UTILIZED FOR THE ITA NO.1662/M/2014 A.Y. 2005-06 5 APPELLANTS OWN NAME FROM THE SAME PARTIES WHO ALSO SUPPLIED GOODS TO ITS SISTER CONCERNS. THEREFORE IT IS UNLIKELY THAT THE PARTIES HAVE INCORRECTLY ISSUED THE BILLS IN THE NAME OF THE APPELLANTS SISTER CONCERN IF THE GOODS IN QUESTION WERE MEANT FOR THE APPELLANT. IN THE IMPUGNED ORDER THE A.O. AFTER VERIFYING THE STOCK REGISTER ALLOWED THE PURCHASE FOR THOSE GOODS WHICH THE APPELLANT UTILIZED FOR ITS OWN BUSINESS PURPOSE. IN VIEW OF THE FOREGOING DISCUSSION I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE ASSESSING OFFICER AND HENCE THE ADDITION OF RS.45 27 573/- MADE BY THE LEARNED AO IS ACCORDINGLY CONFIRMED. THIS GROUND OF APPEAL IS THEREFORE DISMISSED. 5. THE ASSESSEE HAS PRODUCED THE DETAILS AT PAGE 14 OF THE PAPER BOOK WHICH IS REPRODUCED AS FOLLOWS:- S. NO PARTY NAME BILL NO. DATE OF INVOICE ENTRY DATE OF INVOICE AMOUNT OUT OF DISALLO- WANCES PAID DATE PAID AMOUNT BANK NAME/ LC NO. 1 A.M.TEX 8 01/11/2003 01/04/2004 318 144 01/04/2004 318 144 CANARA BANK- LC/23/10 2 DEOKIRAN AGENCIES 26 22/01/2004 01/04/2004 544 000 23/06/2004 544 000 SARASWAT BANK CHQ. NO.039053 3 GROWWEL ASSOCIATES 31 24 13 20/03/2001 16/02/2004 12/01/2004 01/04/2004 01/04/2004 01/04/2004 379 968 282 744 249 039 06/04/2004 21/05/2004 19/04/2004 379 968 282 744 249 039 SARASWAT BANK CHQ. NO.039101 CANARA BANK CHQ.NO.529760&529761 CANARA BANK CHQ.NO.504903&504904 4 TEAM WORK KNIT 23 12/03/2004 01/04/2004 245 886 11/06/2004 100 000 CANARA BANK CHQ. NO.529647 ITA NO.1662/M/2014 A.Y. 2005-06 6 THE MAIN GROUND FOR DECLINING THE SAID PURCHASES IS THAT THE NOTICES U/S.133(6) OF THE ACT WERE NOT SERVED AND SOME PURCHASES WERE BELONGING TO EARLIER YEAR AND THE TRANSACTION WAS DONE THROUGH SISTER CONCERN. THE PRIMARY ONUS TO DISCLOSE ABOUT THE IDENTITY OF THE PURCHASERS THE ADDRESSES BILLS AND DETAILS OF BANK TRANSACTION WAS UPON THE ASSESSEE WHICH HAS BEEN DISCHARGED BY HIM. IT CAME INTO THE NOTICE THAT THE ASSESSING OFFICER MERELY ISSUED THE NOTICES U/S.133(6) OF THE ACT WHICH WERE NOT SERVED. NO FURTHER INQUIRY WAS DONE BY THE ASSESSING OFFICER. NON SERVICE OF NOTICE CANNOT BE CAUSE TO DECLINE THE PURCHASES BECAUSE AFTER THE NON-SERVICES OF THE NOTICE NO FURTHER ENQUIRY WAS DONE BY THE ASSESSING OFFICER. IF THE PURCHASE HAS BEEN ROUTED THROUGH THE SISTER CONCERN THE SAME CANNOT BE BASE TO DECLINE THE PURCHASE ALSO. IN THE INSTANT CASE SUFFICIENT INFORMATION HAS BEEN GIVEN BY THE ASSESSEE WHICH HAS NOT VERIFIED / CONFIRMED BY THE PROPER AND JUSTIFIABLE ENQUIRY. THE SALE IS NOT DISPUTED. SOME ENTRIES 23/06/2004 145 886 SARASWAT BANK CHQ. 039054 5 VARDHAMA N SPG. MILLS 2358 2241 2240 02/02/2004 08/01/2004 08/01/2004 01/04/2004 01/04/2004 01/04/2004 980 083 490 048 598 952 03/05/2004 17/04/2004 17/04/2004 980 083 490 048 598 952 SARASWAT BANK LC/062 CANARA BANK LC/54/60 CANARA BANK LC/54/60 6 UNICORN IMPEX 30 27 13/02/2004 27/12/2003 01/04/2004 01/04/2004 147 359 291 350 02/05/2004 14/05/2004 19/05/2004 147 359 150 000 141 350 CANARA BANK CHQ.NO.529747 CANARA BANK CHQ.504990 CANARA BANK CHQ.504989 4 527 573 4 527 573 ITA NO.1662/M/2014 A.Y. 2005-06 7 BELONGING TO EARLIER YEAR IS ALSO NOT A JUSTIFIABLE CAUSE TO DECLINE THE PURCHASE OF THE ASSESSEE SPECIFICALLY IN THE CIRCUMSTANCES SPECIFICALLY WHEN THE ASSESSEE HAS DISCHARGED HIS ONUS BY PROVIDING THE SUFFICIENT INFORMATION MENTIONED ABOVE. IN VIEW OF THE SAID CIRCUMSTANCES WE ARE OF THE VIEW THAT THE ORDER PASSED BY THE CIT(A) IS WRONG AGAINST LAW AND FACTS AND IS NOT LIABLE TO BE SUSTAINABLE IN THE EYES OF LAW THEREFORE WE SET ASIDE THE ORDER IN QUESTION AND ALLOWED THE PURCHASE TO THE TUNE OF RS.45 27 573/-. 6. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH OCTOBER 2016. SD/- SD/- (R.C.SHARMA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 28 TH OCTOBER 2016 MP ITA NO.1662/M/2014 A.Y. 2005-06 8 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. () / THE CIT(A)- 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE. / BY ORDER //TRUE COPY// / /(DY./ASSTT. REGISTRAR) / ITAT MUMBAI