SHAF BROADCAST P.LTD, MUMBAI v. DCIT CIR 9(3), MUMBAI

ITA 7617/MUM/2012 | 2004-2005
Pronouncement Date: 31-10-2016

Appeal Details

RSA Number 761719914 RSA 2012
Assessee PAN AABCS4182M
Bench Mumbai
Appeal Number ITA 7617/MUM/2012
Duration Of Justice 3 year(s) 10 month(s) 5 day(s)
Appellant SHAF BROADCAST P.LTD, MUMBAI
Respondent DCIT CIR 9(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-10-2016
Appeal Filed By Assessee
Bench Allotted E
Tribunal Order Date 31-10-2016
Date Of Final Hearing 04-11-2015
Next Hearing Date 04-11-2015
Assessment Year 2004-2005
Appeal Filed On 26-12-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH MUMBAI BEFORE SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 7617 /MUM/20 12 (ASSESSMENT YEAR 20 04 - 05 ) M/S. SHAF BROADCAST PVT. LTD. ROOM NO. 401 REMI BIZ COURT SHAH INDUSTRIAL ESTATE VEER DESAI ROA D ANDHERI WEST MUMBAI - 400053. VS. DCIT CIRCLE 9(3) MUMBAI ( APPELLANT ) ( RESPONDENT ) PAN NO . AABCS4182M ASSESSEE BY SHRI RISHABH SHAH DEPARTMENT BY CAPT. PRADEEP ARYA DATE OF HEARING 20 .10 . 201 6 DATE OF PRONOUNCEMENT 31 . 10 . 201 6 O R D E R PER B.R. BASKARAN (AM) : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 15.11.2012 PASSED BY THE LEARNED CIT(A) - 20 MUMBAI AND IT RELATES TO A.Y. 2004 - 05. GROUNDS OF APPEAL URGED BY THE ASSESSEE READ AS UNDER: - 1. ON THE FACTS A ND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN REOPENING THE ASSESSMENT COMPLETED U/S. 143(3) OF THE INCOME TAX ACT 1961 WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN REOPENING THE CASE U/S.148 OF THE IT ACT ON THE BASIS OF THE STATEMENT OF THIRD PARTY WITHOUT CONSIDER ING THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN PASSING ORDER WITHOUT ALLOWING CROSS EXAMINATION AS WAS M/S. SHAF BROADCAST PVT. LTD. 2 REQUESTED BY THE APPELLANT. ORDER PASSED WIT H OUT A LLO WING CROSS EXAMINATION IS IN VIOLATION OF PRINCIPLES OF NATURAL JUSTICE AND THUS VOID IN LAW AND NEEDS TO BE QUASHED. 4. ON THE FACT AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW THE LEARNED CIT(A) HAS ERRED IN CONFIRMI NG THE ACTION OF ASSESSING OFFICER IN MAKING AN ADDITION OF RS.50 44 000/ - ON ACCOUNT OF ALLEGED BOGUS PURCHASES OF SOFTWARE FROM M/S. WASHINGTON SOFTWARE LTD. WITHOUT CONSIDERING THE FACTS & CIRCUMSTANCES OF THE CASE. 2. FACTS RELATING TO THE CASE ARE S TATED IN BRIEF. THE ASSESSEE - COMPANY IS ENGAGED IN THE BUSINESS OF TRADING IN COMPUTER SYSTEM AND SOFTWARE. IT FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 26.10.2004 DECLARING A TOTAL INCOME OF ` 1.80 CRORES. THE ASSESSING OFFICER RECE IVED INFORMATION THAT A COMPANY NAMED M/S. WASHINGTON SOFTWARE LTD. HAS ISSUED BOGUS BILLS FOR SUPPLY OF SOFTWARE AND IT WAS NOTICED THAT THE ASSESSEE HAS PURCHASED SOFTWARE FOR A VALUE OF ` 50.44 LAKHS FROM THE ABOVE SAID COMPANY. HENCE THE ASSESSING OF FICER REOPENED THE ASSESSMENT BY ISSUING NOTICE U/S. 148 OF THE ACT. THE ASSESSEE CONTENDED THAT IT HAD REALLY PURCHASED THE SOFTWARE FROM M/S. WASHINGTON SOFTWARE LTD. AND IN SUPPORT OF THE SAME IT FURNISHED COPIES OF INVOICE ISSUED BY M/S. WASHINGTON SO FTWARE LTD. A LONG WITH LEDGER ACCOUNT AND BANK STATEMENT EVIDENCING PAYMENT TOWARDS SAME. HOWEVER THE ASSESSING OFFICER PLACED RELIANCE ON THE SWORN STATEMENT GIVEN BY SHRI SANJAY D. SONAWANE IN HIS CAPACITY AS A DIRECTOR OF M/S. WASHINGTON SOFTWARE LTD. WHEREIN HE HA D STATED THAT THE BILLS THAT WERE ISSUED BY HIS COMPANY WERE ONLY ACCOMMODATION BILLS AND THEY HAVE BEEN ISSUED BY RECEIVING COMMISSION OF 1% ON THE VALUE OF BILLS. HE HAD ALSO CONFESSED THAT HIS COMPANY DID NOT HAVE THE CAPACITY F OR DEVELOP ING SOFTWARE. WHEN STATEMENT GIVEN BY SHRI SANJAY D. SONAWANE WAS PUT TO THE ASSESSEE THE ASSESSEE ASKED FOR CROSS EXAMINATION OF THE ABOVE SAID PERSON. THE ASSESSING OFFICER HOWEVER TOOK THE VIEW THAT THE ASSESSEE SHOULD HAVE PRODUCED SHRI SANJAY D. SON AWANE IF IT WISH ED TO CROSS EXAMINE HIM. ACCORDINGLY HE HELD THAT PURCHASE OF SOFTWARE VALUING AT ` 50.44 LAKHS MADE FROM M/S. WASHINGTON SOFTWARE LTD. IS BOGUS PURCHASES AND M/S. SHAF BROADCAST PVT. LTD. 3 ACCORDINGLY DISALLOWED THE SAME. THE LEARNED CIT(A) ALSO CONFIRMED THE SAME AND HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 3. THE FIRST LEGAL ISSUE URGED BY THE ASSESSEE RELATES TO THE VALIDITY OF REOPENING OF ASSESSMENT. WE NOTICE THAT THE AO HAS REOPENED THE ASSESSMENT UPON RECEIVING INFORMATION THAT THE PURCH ASES MADE FROM M/S WASHINGTON SOFTWARE LTD WERE BOGUS PURCHASES. ACCORDINGLY WE ARE OF THE V IEW THAT THE ASSESSING OFFICER HAD PROPER REASONS FOR ENTERTAINING THE BELIEF THAT THE INCOME OF THE ASSESSEE HAS ESCAPED THE ASSESSMENT. ACCORDINGLY WE ARE OF TH E VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN UPHOLDING THE VALIDITY OF REOPENING OF ASSESSMENT. 5. THE NEXT LEGAL ISSUE URGED BY THE ASSESSEE DURING THE COURSE OF HEARING IS THAT THE ASSESSMENT IS BAD IN LAW SINCE THE AO HAS COMPLETED THE ASSESSMENT WI THOUT FURNISHING THE REASON FOR REOPENING. AT THE TIME OF HEARING THE LD D.R SUBMITTED COPY OF ORDER SHEET NOTING MADE BY THE AO A COPY OF WHICH WAS ALSO FURNISHED TO THE ASSESSEE. A CAREFUL PERUSAL OF THE SAME WOULD SHOW THAT THE AO HAS NOTED DOWN THA T HE HAS FURNISHED THE REASON S FOR REOPENING ALONG WITH THE NOTICE U/S 142(1) OF THE ACT ON 21 - 07 - 2011. WHEN THESE FACTS WERE PUT BEFORE LD A.R HE SUBMITTED THAT THE ASSESSEE HAS RECEIVED NOTICE U/S 142(1) OF THE ACT ONLY AND THE COPY OF REASON FOR REOPE NING WAS NOT RECEIVED. THE LD A.R ALSO FURNISHED AN AFFIDAVIT OBTAINED FROM THE ASSESSEE IN SUPPORT OF THIS SUBMISSION . 6. WE HEARD LD D.R WHO SUBMITTED THAT THE REASONS WERE FURNISHED TO THE ASSESSEE ALONG WITH NOTICE U/S 142(1) OF THE ACT. HAV ING HEARD RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT THE NOTING MADE BY THE AO IN THE ASSESSMENT RECORD SHOULD BE GIVEN PREFERENCE TO THE AFFIDAVIT FILED BY THE ASSESSEE FOR THE REASON THAT THE ASSESSEE HAS FAIRLY ACCEPTED THAT IT HAS RECEIVED NOTICE U/S 14 2(1) OF THE ACT. THE ORDER SHEET NOTING CLEARLY MENTION THAT THE REASON FOR REOPENING HAS BEEN SUPPLIED ALONG WITH NOTICE ISSUED U/S 142(1) OF THE ACT. ACCORDINGLY WE DECLINE TO ENTERTAIN THE AFFIDAVIT AND ALSO M/S. SHAF BROADCAST PVT. LTD. 4 HOLD THAT THE ORDER SHEET NOTING SHOULD BE RELIED UPON AND ACCORDINGLY THE ASSESSEE WAS SUPPLIED WITH THE REASON FOR REOPENING OF THE ASSESSMENT. 7. THE LD A.R ALSO SUBMITTED THAT THE ASSESSEE WAS NOT ALLOWED OPPORTUNITY TO CROSS EXAMINE THE DIRECTOR OF M/S WASHINGTON SOFTWARE LTD. ON MERITS THE LD A.R SUBMITTED THAT THE ASSESSEE HAS SOLD THE SOFTWARES PURCHASED FROM THE ABOVE SAID COMPANY AND ACCORDINGLY SUBMITTED THAT IT COULD NOT HAVE SOLD THE SOFTWARES WITHOUT PURCHASING THEM. DURING THE COURSE OF HEARING T HE LD A.R WAS DIRECTED TO FURN ISH ONE TO ONE RECONCILIATION OF THE PURCHASE BILLS AND SALES BILLS. HOWEVER TILL DATE THE SAME WAS NOT FILED. 8. SINCE THE ASSESSING OFFICER HAS NOT ALLOWED OPPORTUNITY OF CROSS EXAMINATION AND SINCE THE AO ALSO DID NOT EXAMINE THE CLAIM OF THE ASS ESSEE THAT THE SOFTWARES HAVE BEEN SOLD TO OTHERS WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE THE SAME AFRESH BY DULY CONSIDERING THE INFORMATION AND EXPLANATIONS THAT MAY BE FURNISHED BY THE ASSESSEE. THE AO SHOULD ALLOW OPPORTUNITY OF CROSS EXAMINATION IF SO DEMANDED BY THE ASSESSEE. 9. IN THE RESULT THE APPEAL FILE D BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 31 . 10 .2016 SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 31 / 10 / 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) M/S. SHAF BROADCAST PVT. LTD. 5 4. CIT 5. DR ITAT MUMBAI 6. GUARD FILE. BY ORDER //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT MUMBAI