C I T JAIPUR vs. M/S B A INTERNATIONAL

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ITA/367/2011HC RajasthanRJHC02019781201024 July 20175 pages
AI SummaryDismissed

What did the High Court hold?

The High Court, by its order dated February 15, 2017, deleted the second question of law as framed. The Court held that the view taken by the Tribunal was just and proper. Crucially, the High Court observed that the questions which had been raised had not been argued before the Income Tax Appellate Tribunal. Regarding the first question of law, the High Court stated that it would be open for the appropriate authority under relevant acts to take action if permissible, and that this would not be required to be considered under the Income Tax Act. Consequently, the appeals stood dismissed. The ratio decidendi is that appeals can be dismissed if the core issues were not argued before the lower appellate authority, and that matters outside the purview of the Income Tax Act should be pursued under the relevant statutes.

What were the facts?

These are appeals by the Commissioner of Income Tax (CIT) against the order of the Income Tax Appellate Tribunal (ITAT). The ITAT had dismissed the department's appeal and allowed the assessee's appeal, modifying the order of the CIT(A). The assessee is M/s B.A. International. The appeals pertain to multiple assessment years, though not explicitly stated in the provided text. The High Court admitted the matters and framed questions of law. Subsequently, by an order dated February 15, 2017, the High Court deleted one of the framed questions and observed that the questions raised had not been argued before the ITAT. The High Court also noted that it would be open for the appropriate authority under relevant acts to take action regarding the first question, if permissible, and that this would not be required to be considered under the Income Tax Act.

What were the issues?

The High Court framed two questions of law for each of the five appeals: 1. Whether, in the facts and circumstances of the case, the ITAT acted illegally and perversely in not taking cognizance of inquiries conducted by CBDT/DRI/Customs authorities which clearly indicate that export sales were not genuine? 2. Whether, in the facts and circumstances of the case, the ITAT acted illegally and perversely in law and was justified in not sustaining an addition made under Section 69C of the Income Tax Act on account of bogus purchases, without appreciating that the claimed purchases were proved to be bogus solely on the basis that since export was there, corresponding purchases must be there, and without taking judicial notice of the fact that the persons managing the affairs of the firm are not in the trade of Gem & Jewellery and Garments but in the trade of manufacturing ceramic waves? Arguments: Assessee: The judgment does not record any specific arguments made by the assessee before the High Court. However, the High Court's order implies that the questions raised were not argued before the ITAT. Revenue: The judgment does not record any specific arguments made by the revenue before the High Court. However, the revenue is the appellant, indicating their disagreement with the ITAT's decision.

Which sections of the Income-tax Act were involved?

Section 69C

AI-generated summary — verify with the full judgment below

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 367 / 2011 Commissioner of Income Tax, Jaipur-ii Jaipur ----Appellant Versus M/s B.A. International, B-12, M.G.D. Market Jaipur ----Respondent Connected With D.B. Income Tax Appeal No. 85 / 2011 Commissioner of Income Tax, Jaipur -II, Jaipur ----Appellant Versus M/s B.A. International, B-12, M.G.D. Market, Jaipur ----Respondent D.B. Income Tax Appeal No. 90 / 2011 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus M/s B.A. International, B-12, M.G.D. Market, Jaipur ----Respondent D.B. Income Tax Appeal No. 125 / 2011 Commissioner of Income Tax, Jaipur -II, Jaipur ----Appellant Versus M/s B.A. International, B-12, M.G.D. Market, Jaipur ----Respondent D.B. Income Tax Appeal No. 566 / 2011 Commissioner of Income Tax, Jaipur -II, Jaipur ----Appellant Versus

(2 of 5) [ITA-367/2011]

M/s B.A. International, B-12, M.G.D. Market, Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Mr. R.B. Mathur For Respondent(s) : Mr. Suresh Sahani with Mr. R.M. Sharma, Mr. Mahendra Gargeiya _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Order 24/07/2017

By way of these appeals, the appellant has assailed the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department and allowed the appeal of the assessee modifying the order of CIT(A). This court while admitting the matter has framed the following questions of law:- “D.B. ITA No. 367/2011 (i) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in not taking cognizance of inquiries conducted by CBDT/DRI/Customs authorities which clearly indicate that export sales were not genuine? (ii) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in law and the Hon’ble ITAT was justified in not sustaining addition made u/s 69C of the Act on account of bogus purchases without appreciating that the claimed purchases were proved to be bogus solely on the basis that since export was there corresponding purchases must be there and not taking judicial notice of the fact that the persons managing the affairs of the firm are not in the trade of Gem & Jewellery

(3 of 5) [ITA-367/2011]

and Garments but in the trade of manufacturing of ceramic waves? “D.B. ITA No. 85/2011 (i) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in not taking cognizance of inquiries conducted by CBDT/DRI/Customs authorities which clearly indicate that export sales were not genuine? (ii) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in law and the Hon’ble ITAT was justified in not sustaining addition made u/s 69C of the Act on account of bogus purchases without appreciating that the claimed purchases were proved to be bogus solely on the basis that since export was there corresponding purchases must be there and not taking judicial notice of the fact that the persons managing the affairs of the firm are not in the trade of Gem & Jewellery and Garments but in the trade of manufacturing of ceramic waves? “D.B. ITA No. 90/2011 (i) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in not taking cognizance of inquiries conducted by CBDT/DRI/Customs authorities which clearly indicate that export sales were not genuine? (ii) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in law and the Hon’ble ITAT was justified in not sustaining addition made u/s 69C of the Act on account of bogus purchases without appreciating that the claimed purchases were proved to be bogus solely on the basis that since export was there corresponding purchases must be there and not taking judicial notice of the fact that the persons managing the affairs of the firm are not in the trade of Gem & Jewellery and Garments but in the trade of manufacturing of ceramic waves? “D.B. ITA No. 125/2011 (i) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in not taking cognizance of inquiries conducted by CBDT/DRI/Customs authorities which clearly indicate that export sales were not genuine?

(4 of 5) [ITA-367/2011]

(ii) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in law and the Hon’ble ITAT was justified in not sustaining addition made u/s 69C of the Act on account of bogus purchases without appreciating that the claimed purchases were proved to be bogus solely on the basis that since export was there corresponding purchases must be there and not taking judicial notice of the fact that the persons managing the affairs of the firm are not in the trade of Gem & Jewellery and Garments but in the trade of manufacturing of ceramic waves? “D.B. ITA No. 566/2011 (i) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in not taking cognizance of inquiries conducted by CBDT/DRI/Customs authorities which clearly indicate that export sales were not genuine? (ii) Whether in the facts and circumstances of the case the ITAT has acted illegally and perversely in law and the Hon’ble ITAT was justified in not sustaining addition made u/s 69C of the Act on account of bogus purchases without appreciating that the claimed purchases were proved to be bogus solely on the basis that since export was there corresponding purchases must be there and not taking judicial notice of the fact that the persons managing the affairs of the firm are not in the trade of Gem & Jewellery and Garments but in the trade of manufacturing of ceramic waves?” The order dated 15th February, 2017 passed by this Court reads as under:- “In view of amendment applications, question No. 2 which has been referred by the Court is deleted as prayed for. All applications are allowed. In our considered opinion, the view taken by the Tribunal is just and proper. The question which has been raised have not been argued before the Income Tax Appellate Tribunal.

(5 of 5) [ITA-367/2011]

It will be open for the appropriate authority under relevant act to take action regarding question no.1, if it is permissible. This will not be required to consider under Income Tax Act. The appeals stand dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. A.Sharma/68-72

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