M/s Gopinath Gems, Surat v. The Income Tax Officer, Ward-3(3)(1), Surat

SA 69/SRT/2018 | 2013-2014
Pronouncement Date: 01-07-2019 | Result: Allowed
Expert Summary: Where AO has made addition of alleged bogus purchases solely on the basis of extracts of statement by third parties and has not provided the statement as well as an opportunity of cross examination of the same when requested by the assessee during the assessment proceedings, held to be gross violation of Principle of Natural Justice. Held that addition is to be deleted relying on the decision of Hon'ble SC in the case of Andaman Timber Industries vs. Commissioner of Central Excise[[2015] 281 CTR 241].

Appeal Details

RSA Number 6925617 RSA 2018
Assessee PAN AAHFG5845L
Bench Surat
Appeal Number SA 69/SRT/2018
Duration Of Justice 9 month(s)
Appellant M/s Gopinath Gems, Surat
Respondent The Income Tax Officer, Ward-3(3)(1), Surat
Appeal Type Income Tax (Transfer Pricing) Appeal
Pronouncement Date 01-07-2019
Appeal Filed By Assessee
Tags No record found
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 26-10-2018
Assessment Year 2013-2014
Appeal Filed On 01-10-2018
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH SURAT BEFORE SHRI C.M.GARG JUDICIAL MEMBER AND SHRI O.P.MEENA ACCOUNTANT MEMBER S.A NOS.64 TO 70/SRT/2018 (ARISING IN ITA NOS.637 624 626 627 628 & 629/SRT/2018) / ASSESSMENT YEARS: 2008-09 TO 2014-15 M/S. GOPINATH GEMS 201 SIDDHANRTH COMPLEX HIRA BAUG VARACHHA ROAD SURAT 395 006. [PAN: AAHFG 5845L] VS. INCOME TAX OFFICER WARD-3(3)(1) SURAT. ( / APPELLANT) ( !' /RESPONDENT) / ASSESSEE BY : SHRI MEHUL R. SHAH C.A /RESPONDENT BY : SHRI VINOD KUMAR SR. D.R /DATE OF HEARING : 26-10-2018 /DATE OF PRONOUNCEMENT : 26-10-2018 / ORDER PER C.M.GARG JUDICIAL MEMBER: THESE SEVEN STAY PETITIONS HAVE BEEN FILED SEEKING STAY OF DEMAND OF RS. 40 550/- FOR AY 2008-09 RS. 5 67 750/- FOR AY 2009-10 RS. 7 17 162/- FOR AY 2010-11 RS. 4 06 230/- FOR AY 2011-12 RS. 4 49 045/- FOR AY 2012-13 RS. 8 95 540/- FOR AY 2013-14 & RS. 7 55 690/- FOR AY 2014-15. 2. WE HAVE HEARD THE ARGUMENTS OF THE BOTH SIDES AN D CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE ASSESSEE PAI D MORE THAN 50% OF TOTAL 2 S.A NOS.64 TO 70 /SRT/2018 M/S. GOPINATH GEMS OUTSTANDING DEMAND PERTAINING TO ALL SEVEN AYS THER EFORE STAY OF REMAINING OUTSTANDING DEMAND MAY KINDLY BE GRANTED TO THE ASS ESSEE. 3. THE LD. AR SUBMITTED THAT THE LD. CIT(A) HAS GRA NTED PART RELIEF TO THE ASSESSEE WHEREIN HE HAS RESTRICTED THE DISALLOWANC E ON ACCOUNT OF ALLEGED BOGUS PURCHASES FROM 25% TO 12.5% OF TOTAL PURCHASE S AGAINST WHICH THE ASSESSEE HAS FILED THESE APPEALS HAVING PRIMA FACIE CASE IN FAVOUR OF THE ASSESSEE. THE LD. AR SUBMITTED THAT AS PER DECISIO N OF HON'BLE DELHI HIGH COURT IN THE CASE OF VALVOLINE CUMMINS LTD. VS. DCI T REPORTED IN 307 ITR 103 (DEL.) WHERE IT WAS HELD THAT IF THE ASSESSMENT IS MORE THAN 8 TIMES THE RETURNED INCOME ABSOLUTE STAY SHOULD BE GRANTED. 4. REPLYING TO THE ABOVE THE LD. DEPARTMENTAL REPR ESENTATIVE (DR) STRONGLY OPPOSED TO THE STAY OF RECOVERY OF OUTSTAN DING DEMAND AND SUBMITTED THAT THERE ARE CONCURRENT FINDING OF AO A ND LD. CIT(A) AND THERE IS NO SCOPE OF ANY FURTHER RELIEF FOR THE ASSESSEE. TH EREFORE STAY CANNOT BE GRANTED AGAINST RECOVERY OF OUTSTANDING DEMAND AS T HE LD. CIT(A) HAS ONLY RESTRICTED THE ADDITION FROM 25% TO 12.5% AND IT IS NOT A CASE WHERE THE ASSESSMENT IS MORE THAN 8 TIMES OF THE RETURNED INC OME THEREFORE THE BENEFIT OF THE RATIO OF DECISION OF HON'BLE HIGH COURT OF D ELHI (SUPRA) CANNOT BE GRANTED TO THE ASSESSEE . THE LD. DR SUBMITTED THAT IF IT IS FOUND JUST AND PROPER THEN ASSESSEE MAY KINDLY BE DIRECTED TO PAY SOME ADDITIONAL PART OF OUTSTANDING DEMAND FOR GRANT OF SHORT TERM STAY. 5. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS FIRST OF ALL WE MAY OBSERVE THAT THE LD. DR HAS NOT DISPUTED THE FACT T HAT THE ASSESSEE HAS PAID 3 S.A NOS.64 TO 70 /SRT/2018 M/S. GOPINATH GEMS MORE THAN 50% AMOUNT OF TOTAL OUTSTANDING DEMAND IN ALL SEVEN ASSESSMENT YEARS BUT FOR THE PAYMENT OF OUTSTANDING DEMAND THE SE ASSESSMENT YEARS HAS TO BE TAKEN CARE INDEPENDENTLY AND THE AY IN WH ICH SUBSTANTIAL PAYMENT HAS BEEN MADE NO FURTHER PAYMENT FOR GRANT OF STAY IS REQUIRED BUT IN THE AYS WHERE THE ASSESSEE HAS NOT PAID SUFFICIENT PART OF OUTSTANDING DEMAND THEN THE STAY IS REQUIRED TO BE GRANTED ONLY AFTER SUFFI CIENT PART PAYMENT OUT OF OUTSTANDING DEMAND. THE AO MADE ADDITION ON THE ALL EGATION OF BOGUS PURCHASES WHICH WAS REDUCED FROM 25% TO 12.5% BY TH E LD. CIT(A) AND THE ASSESSEE IS FURTHER CHALLENGING THE ADDITION CONFIR MED BY THE LD. CIT(A) IN THESE APPEALS. WE ARE NOT REQUIRED TO ADJUDICATE TH E ISSUE IN DETAIL ON MERITS HOWEVER WE FIND THAT THE ASSESSEE AS A PRIMA FACIE ARGUABLE CASE AND HAS PAID SUBSTANTIAL PORTION OF OUTSTANDING DEMAND. T HEREFORE WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAS A GOOD ARG UABLE PRIMA FACIE CASE AND LOOKING INTO THE ENTIRE FACTS AND CIRCUMSTANCES WE FIND IT APPROPRIATE TO GRANT STAY AGAINST OUTSTANDING DEMAND FOR A PERIOD OF SIX MONTHS FROM TODAY OR TILL DISPOSAL OF RELEVANT APPEALS WHICHEVER IS EARLIER ON FOLLOWING TERMS AND CONDITIONS: I) SINCE FROM AY 2009-10 TO 2012-13 THE ASSESSEE HAS PAID SUBSTANTIAL PART OF OUTSTANDING DEMAND BUT IN THE O THER YEARS PART PAYMENT IS NOT SUFFICIENT. THEREFORE WE DIREC T THE ASSESSEE TO DEPOSIT RS. 3 40 550/- ON OR BEFORE 15 TH NOVEMBER 2018 AS MENTIONED BELOW; A) FOR AY 2008-09 RS. 40 550/- B) FOR AY 2013-14 RS. 1 00 000/- C) FOR AY 2014-15 RS. 2 00 000/- II) THE ASSESSEE SHALL NOT SEEK ADJOURNMENTS WITHOU T ANY GOOD BONAFIDE AND REASONABLE CAUSE IN THE MAIN REL EVANT APPEALS; 4 S.A NOS.64 TO 70 /SRT/2018 M/S. GOPINATH GEMS III) THE APPEAL OF THE ASSESSEE WILL BE HEARD BEFOR E REGULAR BENCH ON 26.11.2018 ON SUBMITTING PROOF OF PAYMENT OF RS. 3 40 550/- ON OR BEFORE 15 TH NOVEMBER 2018. 5. IN THE RESULT ALL THE STAY APPLICATIONS OF THE ASSESSEE ARE ALLOWED ON THE AFORESAID TERMS AND CONDITIONS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 6 TH OCTOBER 2018. SD/- SD/- / SURAT ; DATED : 26 TH OCTOBER 2018 EDN ! $ / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. # ( ) / THE CONCERNED CIT(A); 4. THE CONCERNED PRL. CIT; 5. / DR ITAT SURAT; 6. / GUARD FILE . ( ) (O.P.MEENA) / ACCOUNTANT MEMBER ( ) (C.M.GARG) / JUDICIAL MEMBER