Rinki Petrochem Pvt. Ltd.,, Vadodara v. The CIT(A)-2, Baroda

ITA 861/AHD/2016 | 1995-1996
Pronouncement Date: 17-11-2017 | Result: Allowed

Appeal Details

RSA Number 86120514 RSA 2016
Assessee PAN AABCR0055Q
Bench Ahmedabad
Appeal Number ITA 861/AHD/2016
Duration Of Justice 1 year(s) 7 month(s) 10 day(s)
Appellant Rinki Petrochem Pvt. Ltd.,, Vadodara
Respondent The CIT(A)-2, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 17-11-2017
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 17-11-2017
Assessment Year 1995-1996
Appeal Filed On 07-04-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENC H (BEFORE SHRI N.K. BILLAIYA ACCOUNTANT MEMBER & SHRI S. S. GODARA JUDICIAL MEMBER) ITA. NO: 1090/AHD/2013 & 861/AHD/2016 (ASSESSMENT YEAR: 1995-96) RINKI PETROCHEM PVT. LTD. 67 RACE COURSE CIRCLE BARODA V/S DY. COMMISSIONER OF INCOME TAX CIRCLE-4 BARODA (APPELLANT) (RESPONDENT) PAN: AABCR0055Q APPELLANT BY : SHRI J.P. SHAH AR RESPONDENT BY : SHRI ANTONY PARIATH SR. D.R . ( )/ ORDER DATE OF HEARING : 15 -11-201 7 DATE OF PRONOUNCEMENT : 17-11-2017 PER N.K. BILLAIYA ACCOUNTANT MEMBER: 1. ITA NOS. 1090/AHD/2013 & ITA 861/AHD/2016 ARE TWO S EPARATE APPEALS BY THE ASSESSEE PREFERRED AGAINST TWO SEPARATE ORDERS OF THE LD. CIT(A)-III BARODA FOR A.Y. 2005-06. ITA NO. 1090 /AHD/13 & 861/AHD/2016 . A.Y.1995-96 2 2. THE FIRST APPEAL RELATES TO THE ADDITIONS MADE IN T HE ASSESSMENT PROCEEDINGS AND SECOND APPEAL RELATES TO THE PENALTY LEVIED ON SUCH ADDITIONS. WE WILL FIRST TAKE UP ITA NO. 1090/AHD/2013. 3. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 26 42 350/- ON ACCOUNT OF UNEXP LAINED PURCHASE OF USED TRANSFORMER OIL. 4. WE FIND THAT THIS IS THE SECOND ROUND OF LITIGATION IN THE FIRST ROUND OF LITIGATION THE ASSESSMENT WAS FRAMED U/S. 143(3) O F THE ACT VIDE ORDER DATED 16.03.1998 ON A TOTAL INCOME OF RS. 1 51 73 935/-. THE MATTER TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 15.0 9.2006 IN ITA NO. 1433/AHD/1999 HAS RESTORED ONE ISSUE FOR FRESH ADJU DICATION WHICH RELATED TO THE ADDITION OF RS. 26 42 350/-. 5. THE FACTS SHOW THAT THE ASSESSEE HAD CLAIMED TO HAV E PURCHASED TRANSFORMER OIL FROM VARIOUS PARTIES. THE ASSESSEE HAD FURNISHED TH E DETAILS OF VEHICLES BY WHICH THE TRANSFORMER OIL WAS TRANSPORTED. ON VERIF ICATION OF THOSE VEHICLES THE A.O. FOUND THAT THE VEHICLES WERE NOT CAPABLE O F TRANSPORTING THE TRANSFORMER OIL. THE A.O. DOUBTED THE GENUINENESS O F THE PURCHASES AND SOUGHT EXPLANATION FOR THE ASSESSEE IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE TRIBUNAL. 6. THE ASSESSEE ONCE AGAIN FURNISHED THE SAME EXPLANAT ION WHICH WAS GIVEN IN THE FIRST ROUND OF LITIGATION. AFTER CONSIDERING THE SU BMISSIONS OF THE ASSESSEE THE A.O. CONCLUDED BY HOLDING THAT THE ASSESSEE HAD FAI LED TO PROVE THAT TRANSFORMER OIL CAN BE TRANSPORTED THROUGH THE OPEN BODY TANKERS. THE A.O. ITA NO. 1090 /AHD/13 & 861/AHD/2016 . A.Y.1995-96 3 TREATED THE PURCHASE OF RS. 26 42 350/- AS UNEXPLAI NED PURCHASES AND MADE THE ADDITION OF THE SAME. 7. ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 8. BEFORE US THE LD. COUNSEL FOR THE ASSESSEE BROUGHT TO OUR NOTICE THE DECISION OF THE CO-ORDINATE BENCH IN THE CASE OF THE ASSESSEE I N EARLIER ASSESSMENT YEARS. IT IS THE SAY OF THE LD. COUNSEL THAT IN EARLIER ASSES SMENT YEARS BY A CONSOLIDATED ORDER THE TRIBUNAL HAS DISPOSED OF THE APPEALS PER TAINING TO A.Y. 1989 -1990 TO A.Y. 1994-95. THE LD. COUNSEL STATED THAT IN ALL THE EARLIER YEARS THE ASSESSEE AND THE REVENUE HAVE ACCEPTED THAT A DISALLOWANCE O F 25% OF THE DISPUTED PURCHASES SHOULD ONLY BE MADE. IN SUPPORT THE LD. COUNSEL FURTHER RELIED UPON THE DECISION OF THE HONBLE HIGH COURT OF GUJARAT I N THE CASE OF VIJAY PROTEINS LTD. 58 TAXMANN.COM 44. 9. PER CONTRA THE LD. D.R. STATED THAT THE FACTS OF E ARLIER YEARS ARE DIFFERENT FROM THE FACTS OF THE YEAR UNDER CONSIDERATION AND SUPPO RTED THE FINDINGS OF THE LD. CIT(A). 10. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW. THE ENTIRE DISPUTE REVOLVES AROUND THE GENUINENESS OF THE PURC HASES OF TRANSFORMER OIL AMOUNTING TO RS. 26 42 350/-. WE FIND THAT A SIMILA R ISSUE WAS IN DISPUTE BEFORE THE TRIBUNAL IN ASSESSMENT YEAR 1989-90 TO A .Y. 1994-95 AND THE TRIBUNAL BY A CONSOLIDATED ORDER HAS DISPOSED THE A PPEAL AND THE RELEVANT FINDINGS READ AS UNDER:- 13. SO FAR AS ISSUE RELATES TO ADDITION ON ACCOUNT OF BOGUS PURCHASES INVOLVED IN GROUND NO. 2 IS CONCERNED THE CIT(APPEALS) CONFIRM ED THE ACTION OF THE ASSESSING OFFICER WHEREBY AN ADDITION OF RS. 28 09 012/- WAS MADE. THE RELEVANT PART OF ITA NO. 1090 /AHD/13 & 861/AHD/2016 . A.Y.1995-96 4 THE ORDER OF THE CIT(APPEALS) AS CONTAINED IN PARAG RAPH NO. 2.2 OF THE APPELLATE ORDER WHICH READS AS UNDER:- '2.2. I HAVE CONSIDERED THE VARIOUS SUBMISSIONS MA DE ON BEHALF OF THE APPELLANT. IT IS OBSERVED THAT THE APPELLANT PROVIDED THE ADD RESSES OF VARIOUS PARTIES FROM WHOM THE PURCHASES WERE MADE. THE LETTERS ADDRESSE D BY THE ASSESSING OFFICER TO THE ABOVE PARTIES REMAINED UNSERVED. IN SOME OF THE BILLS SALES TAX NUMBER SHOWN WAS FOUND TO BE BOGUS. THE TRANSPORTERS WHO W ERE CLAIMED TO HAVE SUPPLIED THE GOODS WERE FOUND TO BE NONEXISTENT. T HE PAYMENTS TO THE ABOVE PARTIES THROUGH CHEQUES WERE DISCOUNTED BY THE EMPL OYEES OF THE APPELLANT AND IN THEIR STATEMENTS SUCH EMPLOYEES ADMITTED THAT A FTER THE DISCOUNTING THE CASH WAS GIVEN BACK TO SHRI C.K.GANDHI THE MANAGING DIR ECTOR OF THE APPELLANT COMPANY. IN VIEW OF ABOVE OVERWHELMING EVIDENCE T HE ASSESSING OFFICER TREATED THE ENTIRE PURCHASES AS BOGUS. REGARDING THE QUESTION OF PROPER OPPORTUNITY AND FACILITY OF CROSS-EXAMINATION IT I S SEEN THAT THE COPY OF THE ORIGINAL STATEMENT RECORDED WAS MADE AVAILABLE TO T HE APPELLANT AND THE APPELLANT WAS OFFERED FACILITY OF CROSS EXAMINA TION WHICH WAS DECLINED. DURING THE COURSE OF REASSESSMENT PROCEEDINGS EXCEPT FOR THE VARIOUS REPETITIVE ARGUMENTS THE APPELLANT HAS NOT ADDUCED ANY FURTHE R EVIDENCE TO PROVE THAT THE PURCHASES WERE GENUINE. IN THE FACTS OF THE CASE I AM UNABLE TO INTERFERE WITH THE FINDING OF THE ASSESSING OFFICER. 14. IN VIEW OF THE AGREEMENT ARRIVED BETWEEN THE PA RTIES (SUPRA) WE RESTRICT THE ADDITION TO THE EXTENT OF 25% OF SUCH BOGUS PURCHAS ES AND THEREFORE ASSESSEES GROUND OF APPEAL IS PARTLY ALLOWED. 11. SINCE IN ALL THE PREVIOUS YEARS THE DISPUTE RELATE D TO THE BOGUS PURCHASES AND THE DISPUTE IN THE APPEAL IN HAND ALSO RELATES TO T HE BOGUS PURCHASES WE DO NOT FIND ANY REASON TO TAKE A DIFFERENT VIEW FROM WHAT HAS ALREADY BEEN TAKEN BY THE CO-ORDINATE BENCH. 12. RESPECTFULLY FOLLOWING THE FINDINGS OF THE CO-ORDIN ATE BENCH (SUPRA) WE DIRECT THE A.O. TO RESTRICT THE ADDITION TO THE EXTENT OF 25% OF SUCH BOGUS PURCHASES. APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 1090 /AHD/13 & 861/AHD/2016 . A.Y.1995-96 5 ITA NO. 861/AH/2016 FOR A.Y. 1995-96 13. THE ONLY GRIEVANCE OF THE ASSESSEE RELATES TO THE L EVY OF PENALTY U/S. 271(1)(C) OF THE ACT ON THE ADDITIONS MADE IN THE ASSESSMENT ON ACCOUNT OF BOGUS PURCHASES OF RS. 26 42 350/-. 14. WHILE DECIDING THE APPEAL RELATING TO THE ADDITION OF BOGUS PURCHASES IN ITA NO. 1090/AHD/2013 (SUPRA) WE HAVE DIRECTED THE A.O . TO RESTRICT THE ADDITION TO 25% OF THE PURCHASES. 15. BE THAT AS IT MAY THE PRESENT APPEAL RELATES TO TH E LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. FACTS ON RECORD SHOW THAT THOUGH THE A. O. HAS DISPUTED THE PURCHASES AMOUNTING TO RS. 26 42 350/- BUT AT THE S AME TIME THE CORRESPONDING SALES HAVE BEEN ACCEPTED BY THE A.O. THESE FACTS ARE SELF CONTRADICTORY AND THEREFORE IT CANNOT BE SAID THAT THE ASSESSEE HAS FILED INACCURATE PARTICULARS OF INCOME OR HAS CONCEALED I TS INCOME. 16. IN OUR CONSIDERED OPINION THIS IS NOT A FIT CASE F OR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. WE ACCORDINGLY DIRECT THE A.O . TO DELETE THE PENALTY OF RS. 12 15 500/-. 17. APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 17 - 11- 20 17 SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 17 /11/2017