PARSONS OVERSEAS, MUMBAI v. ASSISTANT COMMISSIONER OF INCOME TAX 21 (2), MUMBAI

ITA 6705/MUM/2017 | 2012-2013
Pronouncement Date: 28-11-2019 | Result: Allowed

Appeal Details

RSA Number 670519914 RSA 2017
Assessee PAN AAGFM0518E
Bench Mumbai
Appeal Number ITA 6705/MUM/2017
Duration Of Justice 2 year(s) 3 day(s)
Appellant PARSONS OVERSEAS, MUMBAI
Respondent ASSISTANT COMMISSIONER OF INCOME TAX 21 (2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-11-2019
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 28-11-2019
Last Hearing Date 17-01-2019
First Hearing Date 17-01-2019
Assessment Year 2012-2013
Appeal Filed On 24-11-2017
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI C.N. PRAS AD HON'BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA HON'BLE ACCOUNTANT MEMBER IT A. NO. 6705 /MUM/201 7 (A.Y: 20 12 - 13) M/S. PARSONS OVERSEAS 213/214 KALIANDAS UDYOG BHAVAN NEAR CENTURY BAZAR PRABHADEVI MUMBAI 400 025 PA N: AAGFM0518E V. ACIT - 2 1 (2) 1 ST FLOOR PIRAMAL CHAMBERS LALBAUG MUMBAI 400 012 (APPELLANT) (RESPONDENT) ITA.NO. 6477 /MUM/201 7 (A.Y: 2012 - 13) ACIT - 21(2) ROOM NO. 115 1 ST FLOOR PIRAMAL CHAMBERS LALBAUG MUMBAI 400 012 V. M/S. PARSONS OVERSEAS 213/214 KALIANDAS UDYOG BHAVAN NEAR CENTURY BAZAR PRABHADEVI MUMBAI 400 025 PAN: AAGFM0518E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M. SUBRAMANIAN DEPARTMENT BY : KUMARI PADMAPANI BORA DATE OF HEARING : 20 .11.2019 DATE OF PRONOUNCEMENT : 28 .11 .2019 2 ITA.NO. 6705 & 6477 /MUM/2017 (A.Y: 2012 - 13) M/S. PARSONS OVERSEAS O R D E R PER C.N. PRASAD (JM) 1. THESE CROSS APPEALS ARE FILED BY THE ASSESSEE AND R EVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - 33 MUMBAI [HEREINAFTER FOR SHORT 'LD. CIT(A)] DATED 02.08.2017 FOR THE A.Y. 2012 - 13 IN PARTLY SUSTAINING THE DISALLOWANCE MADE TOWARD ALLEGED BOGUS PURCHASES. 2. BRIEFLY STATED THE FACTS ARE ASSESSEE WHO IS EN GAGED IN THE BUSINESS OF EXPORT OF READYMADE GARMENTS FILED ITS RETURN OF INCOME ON 30.09.2012 DECLARING INCOME OF . 28 96 046 / - . RETURN WAS PROCESSED U/S. 143(1) OF THE ACT AND THE ASSESSMENT WAS COMPLETED ON 31.03.2015 U/S. 143(3) OF THE ACT. IN THE CO URSE OF THE ASSESSMENT PROCEEDINGS TO VERIFY THE GENUINENESS OF THE PURCHASES MADE BY THE ASSESSEE FROM VARIOUS PARTIES AS MENTIONED IN PARA NO. 6 OF THE ASSESSMENT ORDER THE ASSESSING OFFICER ISSUED NOTICE S U/S. 133(6) OF THE ACT. IT IS THE FINDING OF TH E ASSESSING OFFICER THAT SOME OF THE NOTICES WERE RETURNED BACK UNSERVED AND IN SOME OF THE CASES THERE WAS NO REPLY FROM THE PARTIES. SHOW - CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO EXPLAIN GENUINENESS OF THE TRANSACTIONS. ASSESSEE SUBMITTED EXPLANATION S ALONG WITH EVIDENCES THROUGH VARIOUS LETTERS DATED 19.03.2015 24.03.2015 AND 25 .03.2015 TO 3 ITA.NO. 6705 & 6477 /MUM/2017 (A.Y: 2012 - 13) M/S. PARSONS OVERSEAS PROVE THE GENUINENESS OF THE PURCHASES MADE. NOT CONVINCED WITH THE SUBMISSIONS AND EVIDENCES FURNISHED BY THE ASSESSEE THE ASSESSING OFFICER ADDED THE ENTIRE PURCHASES MADE FROM SEVEN PARTIES AS REFERRED TO IN THE ASSESSMENT ORDER AS NON - GENUINE FOR THE REASON THAT THE PARTIES HAVE NOT RESPONDED IN SOME CASES AND NOTICES WERE RETURNED IN SOME CASES. WHEN THE MATTER WAS C ARRIED BEFORE THE LD. CIT(A) THE ASSESSEE FURNISHED FURTHER MORE DETAILS AND MADE ELABORATE SUBMISSIONS TO PROVE THE GENUINENESS OF THE PURCHASES MADE BY THE ASSESSEE. HOWEVER THE LD. CIT(A) SUSTAINED THE DISALLOWANCE TO THE EXTENT OF @ 25% OF THE ALLEGE D BOGUS PURCHASES ON THE GROUND THAT EITHER THE PURCHASES FROM THE ABOVE PARTIES ARE OVER INVOICED OR THE PURCHASES WERE ACTUALLY MADE NOT FROM THE SAID PARTIES BUT FROM GRAY MARKET WITHOUT PRO PER BILLING OR DOCUMENTATION. 3. BEFORE US LD. COUNSEL FOR THE AS SESSEE SUBMITTED THAT THE ASSESSING OFFICER COMPLETELY IGNORED THE EVIDENCES FURNISHED BY THE ASSESSEE IN RESPECT OF ALL THESE PARTIES AND THE PURCHASES WERE ADDED ONLY FOR THE REASON THAT THE NOTICES WERE EITHER RETURNED OR THERE WAS NO REPLY FROM THE PAR TIES. LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT IN THE COURSE OF THE ASSESSMENT PROCEEDINGS BY LETTERS 19.03.2015 23.03.2015 24.03.2015 AND 25.03.2015 THE ASSESSEE FURNISHED EVIDENCES IN THE FORM OF REPLIES FURNISHED BY PARTIES DIRECTLY TO THE ASSESSING OFFICER 4 ITA.NO. 6705 & 6477 /MUM/2017 (A.Y: 2012 - 13) M/S. PARSONS OVERSEAS CONFIRMATIONS OF ACCOUNTS IN RESPECT OF M/S. AAASMIN ENTERPRISES M/S. ALI DYEING ARTS AND M/S. AASTJA EXPORTS COPY OF ACKNOWLEDGEMENT OF RETURNS PAN CARDS TO PROVE THE GENUINENESS OF THE PURCHASES MADE BY THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT WITHOUT CONSIDERING THE EVIDENCES FURNISHED BY THE ASSESSEE THE ASSESSING OFFICER SIMPLY TREATED THE PURCHASES AS NON - GENUINE S OLELY FOR THE REASON THAT NOTICES WERE EITHER RETURNED OR THERE WAS NO REPLY OR PARTIES WERE NOT REPLIED. LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT AS IS EVIDENT FROM THE RECORD THAT SOME OF THE PARTIES HAVE IN FACT DIRECTLY REPLIED TO THE ASSESSING OFFIC ER AND THOSE REPLIES WERE ALSO FURNISHED BY THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. 4. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT FOR THE IMMEDIATELY SUBSEQUENT ASSESSMENT YEAR I.E. A.Y. 2013 - 14 IN THE S CRUTINY ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAS EXAMINED THE TRANSACTIONS WITH THE VERY SAME PARTIES AND ACCEPTED THAT THE PARTIES ARE IN EXISTENCE TRANSACTIONS ARE GENUINE AND NO DISALLOWANCE WAS MADE IN RESPECT OF THE PURCHASES MADE FROM ALL TH OSE PARTIES WHILE COMPLETING THE ASSESSMENT U/S. 143(3) OF THE ACT ON 0 9.11.2016. LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT EVEN FOR THE A.Y. 201 4 - 1 5 NO SUCH DISALLOWANCE S WER E MADE BY THE ASSESSING OFFICER . WHILE COMPLETING THE ASSESSMENT 5 ITA.NO. 6705 & 6477 /MUM/2017 (A.Y: 2012 - 13) M/S. PARSONS OVERSEAS U/S. 143(3) OF THE ACT. COPIES OF ASSESSMENT ORDERS WERE PLACED ON RECORD. THEREFORE THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT WHEN THE ASSESSING OFFICER HIMSELF EXAMINED ALL THESE PARTIES IN THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR THE A.Y.2013 - 14 AND FOUND THAT THE TRANSACTION S WERE GENUINE THERE IS NO REASON WHY THE SAME SHOULD NOT BE ACCEPTED AS GENUINE ESPECIALLY WHEN THE ASSESSEE HAS FURNISHED ALL THE EVIDENCES TO PROVE THE GENUINENESS OF THE TRANSACTIONS AND WHEN THE ASSESSING OFFICER IGNORED ALL THE I NFORMATION FURNISHED BEFORE HIM AND SIMPLY TREATED THE PURCHASES AS NON - GENUINE ON THE GROUND THAT NOTICES WERE EITHER RETURNED OR THERE WAS NO REPLY FROM THE PARTIES. LD. COUNSEL FOR THE ASSESSEE RELYING ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT I N THE CASE OF CIT V. NIKUNJ EXIMP ENTERPRISES PVT. LTD. [372 ITR 619] SUBMITS THAT WHEN THE ASSESSEE HAS FURNISHED CONFIRMATIONS LETTERS COPIES OF INVOICES BANK STATEMENTS ETC. NON - APPEARANCE OF SUPPLIERS BEFORE THE ASSESSING OFFICER IS NOT A GROUND TO HELD PURCHASES AS BOGUS. 5. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ON A PERUSAL OF THE ASSESSMENT ORDER WE FIND THAT THE ASSESSING OFFICER TREATED THE PURCHASES MADE FROM SEVEN PARTIES AS 6 ITA.NO. 6705 & 6477 /MUM/2017 (A.Y: 2012 - 13) M/S. PARSONS OVERSEAS NON - GENUINE SOLELY FOR THE REASON THAT THE NOTICES ISSUED U/S. 133(6) OF THE ACT WERE EITHER RETURNED OR THE PARTIES HAVE NOT RESPONDED. THE EVIDENCES PRODUCED BEFORE US CLEARLY SHOWS THAT THE ASSESSEE HAS PRODUCED VARIOUS INFORMATIONS IN THE COURSE OF THE ASSESSMENT PROCEEDINGS TO PROVE THE GENUINENESS OF THE PURCHASES. THE ASSESSEE HAS FURNISHED CONFIRMATIONS OF ACCOUNT S REPLIES FURNISHED BY THE PARTIES DIRECTLY T O THE ASSESSING OFFICER COPIES OF PAN CARDS ACKNOWLEDGEMENT OF FILING RETURNS OF INCOME STATEMENTS OF ACCOUNTS OF THE ASSESSEE IN THE BOOKS OF PARTIES ETC. AND NONE OF THESE EVIDENCES WERE CONSIDERED BY THE ASSESSING OFFICER. EVEN BEFORE THE LD. CIT(A) THE ASSESSEE FURNISHED ALL THESE EVIDENCES. ASSESSEE ALSO FURNISHED VARIOUS FURTHER MORE EVIDENCES TO PROVE THE EXISTENCES OF THE PARTIES GENUINENESS OF THE PARTIES. WE OBSERVE FROM THE ORDER OF THE LD. CIT(A) THAT THE LD. CIT (A) ON EXAMINING ALL THESE EVIDENCES RECORDS A FINDING THAT THE FACTS AND CIRCUMSTANCES CLEARLY STATES THAT THE EXTENT OF PURCHASES SHOWN IN THE NAMES OF THE PARTIES MENTIONED IN THE ASSESSMENT ORDER CANNOT BE DOUBTED. WE OBSERVE FROM THE ORDER OF THE LD .CIT(A) THAT HAVING SAID THAT THESE PURCHASES CANNOT BE DOUBTED THE LD. CIT(A) GOES ON TO RECORD A FINDING THAT IN HIS VIEW EITHER PURCHASES FROM THE ABOVE MENTIONED PARTIES ARE OVER INVOICED OR THEY WERE PURCHASED FROM GRAY MARKET WITHOUT PROPER BILLS WHI CH IS NOT THE CASE OF THE ASSESSEE . WE OBSERVE THAT IF THE 7 ITA.NO. 6705 & 6477 /MUM/2017 (A.Y: 2012 - 13) M/S. PARSONS OVERSEAS LD. CIT(A) WAS OF SUCH VIEW HE COULD HAVE CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER AS THERE IS SUFFICIENT EVIDENCES EVEN ACCORDING TO HIM NOT TO DOUBT THE PURCHASES MADE BY THE ASSESSEE . THUS THE REASONING GIVEN BY THE LD. CIT(A) IN SUSTAINING @25% OF THE BOGUS PURCHASES ON ADHOC BASIS IS BASELESS. 7. WE ALSO FIND THAT THE ASSESSEE HAS FURNISHED VARIOUS INFORMATION AND EVIDENCES IN THE COURSE OF THE ASSE SSMENT PROCEEDINGS FOR THE A.Y. 2013 - 14 IN RESPECT OF THE VERY SAME PARTIES AND THE ASSESSING OFFICER HAS ACCEPTED THE TRANSACTION S WITH THESE PARTIES A S GENUINE. IN SUCH CIRCUMSTANCES WE DO NOT SEE ANY REASON TO HOLD THAT THESE PURCHASES WERE NON - GENUINE FOR THE YEAR UNDER CONSIDERATION. THERE IS SUFFICIENT EVIDENCE ON RECORD TO PROVE THAT THE PURCHASES MADE BY THE ASSESSEE FROM ALL THESE PARTIES ARE GENUINE. SIMPLY BECAUSE THE PARTIES NOT RESPONDED AND NOTICES WERE RETURNED UNSERVED THE TRANSACTIONS CANNOT BE TREATED AS NON - GENUINE IGNO RING ALL THE EVIDENCES FURNISHED BY THE ASSESSEE. IN THESE CIRCUMSTANCES WE REVERSE THE ORDER OF THE LD.CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE ADDITION MADE TOWARDS BOGUS PURCHASES. GROUND S RAISED BY THE ASSESSEE ARE A LLOWED. 8 ITA.NO. 6705 & 6477 /MUM/2017 (A.Y: 2012 - 13) M/S. PARSONS OVERSEAS 8. COMING TO TH E REVENUES APPEAL S INCE WE HAVE H E LD THAT THE PURCHASES MADE BY THE ASSESSEE ARE GENUINE AND DELETED THE DISALLOWANCE THE GROUNDS RAISE D BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED AND APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 28 TH NOVEMBER 2019 SD/ - SD/ - ( G. MANJUNATHA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 28 / 1 1 / 2019 GIRIDHAR S R. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) MUMBAI. 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT MUM