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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI PRAMOD KUMAR & SHRI SANDEEP SINGH KARHAIL
The present appeal has been filed by the Revenue challenging the impugned order dated 30/09/2021, passed under section 250 of the Income Tax Act, 1961 ("the Act") by the learned Commissioner of Income Tax (Appeals)–50, Mumbai [“learned CIT(A)”], for the assessment year 2012–13.
2. In this appeal, the Revenue has raised following grounds:–
Deepak Fertilisers & Petrochemicals Corp. Ltd. ITA. No.2183/Mum./2021 “1. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs.2,71,688, as bogus purchase in the case of M/s. Dipali Enterprises as also confirmed by the Sales Tax (VAT) Department, Govt. of Maharashtra, that M/s. Dipali Enterprises had not done any actual purchase / sales and only bills was issued without actual delivery of the material.
On the facts and in the circumstances of the case and in law, the appeal is being filed in this case, even though the tax effect involved in this case is below monetary limit (tax effect Rs.88,149) considering that issue involved is covered by exception as listed in para 10(e) of Board’s Circular no.3 of 2018, as amended by Board’s letter F. no.279/Misc./142/2007–ITA) dated 20.08.2018.
The only grievance of the Revenue in the present appeal is against deletion of addition of Rs.2,71,688, made on account of bogus purchases by the assessee.
The brief facts of the case, as emanating from the record, are: The assessee is engaged in the business of manufacture and trading of fertilizer and petrochemical products. For the year under consideration, the assessee filed its return of income on 28/09/2012, declaring total income of Rs.182,71,48,540. During the course of assessment proceedings, on the basis of information received from the Investigation Wing of Income Tax Department, Mumbai, it was noticed that the assessee company is one of the beneficiaries of the hawala transactions routed through hawala dealers as informed by the Sales Tax (VAT) Department, State of Maharashtra. From the said information, it was further noticed that the assessee is one of the beneficiaries with regard to the purported transactions of purchases alleged to have been made from M/s Dipali Enterprise amounting to Rs.2,71,688. The information received Page | 2
Deepak Fertilisers & Petrochemicals Corp. Ltd. ITA. No.2183/Mum./2021 from the Sales Tax (VAT) Department was confronted to the assessee and the assessee was asked to furnish copy of purchase orders, bills raised, nature of transaction, etc. In reply, the assessee submitted the details of purchases and stated that the payments are made by account payee cheques in all the cases and the said party is assessed to tax. The assessee further submitted that the material supplied by the said party has been utilised for trading and manufacturing operations. The assessee also submitted that the purchases made were genuine and the same cannot be disallowed on the ground that the applicable VAT was not deposited by the said party. The Assessing Officer vide order dated 23/01/2015, passed under section 143(3) of the Act, inter–alia, did not agree with the submissions of the assessee and made the addition of Rs.2,71,688, on account of bogus purchases by the assessee. The Assessing Officer also noted that the addition on account of bogus purchases from the same supplier was made in assessee’s own case for the assessment year 2011–12 and the said addition was also confirmed by the learned CIT(A).
In appeal before the learned CIT(A), the assessee filed copy of ledger extracts of M/s. Dipali Enterprises, for financial year 2011–12 along with copies of bank payment vouchers, purchase invoices and delivery challan as proof of purchases made from the said party. The learned CIT(A), vide impugned order, after noting that the facts and circumstances for the year under consideration remain the same as that Page | 3
Deepak Fertilisers & Petrochemicals Corp. Ltd. ITA. No.2183/Mum./2021 of the preceding assessment year, deleted the addition made by the Assessing Officer by following the decision of the Co–ordinate Bench of Tribunal rendered in assessee’s own case for assessment year 2011–12. Being aggrieved, the Revenue is in appeal before us.
During the course of hearing, the learned Departmental Representative submitted that in the preceding assessment year, the Co– ordinate Bench of Tribunal has noted the details filed by the assessee in respect of similar transactions. However, no documents were produced by the assessee during the course of assessment proceedings, in the present case, justifying the impugned purchase transaction from M/s. Dipali Enterprises.
On the other hand, the learned A.R. submitted that the details were filed before the Assessing Officer vide letter dated 21/01/2015, which was duly taken note in the assessment order at Page–5.4. The learned A.R. further submitted that the said details was also taken note by the learned CIT(A) at Para–7.3.1, of the impugned order.
We have considered the rival submissions and perused the material available on record. We find that the Co–ordinate Bench of Tribunal in assessee’s own case for assessment year 2011-12 rendered in ITA no. 7583/Mum./2014, etc., vide order dated 20/12/2016, while deleting the Deepak Fertilisers & Petrochemicals Corp. Ltd. ITA. No.2183/Mum./2021 similar addition made on account of similar purchase transaction with M/s. Dipali Enterprises, observed as under:–
“3.4 We have considered the rival submission and perused the relevant material on record. We find that the assessee had submitted before the AO on 04.02.2014 the purchase invoice, payment vouchers, delivery challans. The Id. CIT(A) has mentioned it at para 8 (Page 5) of the appellate order. The AO has mentioned at para 5.7 (page 7) of the assessment order that he had issued notice u/s 133(6) of the act to M/s. Dipali Enterprise but no response was received. The only argument of the AO is that the assessee could not bring on record the requisite documents showing delivery / or receipt of the goods from M/s, Dipali Enterprise. We find that the assessee company had incurred manufacturing and other expenses of Rs. 1,21,460 lacs during the year under consideration. Out of it had incurred an expenditure of Rs. 2192 lacs towards packing materials. We have mentioned herein above that the assessee had furnished before the AO the purchase invoice, payment voucher, delivery challans on 04.02.2014. In view of the above, the assessee-company had filed before the AO the related information with regard to the purchase of packing material worth Rs.3,06,513 from M/s. Dipali Enterprises. On the other hand the findings of the A.O. are not based on material evidence. There was no material evidence before the A.O. to establish that the said party issued bogus vouchers. Moreover, considering the turnover of the assessee, it is highly improbable that to save negligible amount of tax, assessee would have inflated the purchases to the extent of Rs.3,06,513/- only. In view of the above, the addition of Rs.3,06,513/- made by the AO and confirmed by the ld. CIT(A) is deleted.”
We find that the details as taken note in the aforesaid decision was also filed by the assessee for the year under consideration and has been duly taken note by the Assessing Officer as well as by the learned CIT(A). The learned Departmental Representative could not show us any other material to deviate from the aforesaid decision rendered in assessee’s own case for preceding assessment year. Thus, respectfully following the judicial precedent in assessee’s own case, we find no infirmity in the impugned order passed by the learned CIT(A).
Deepak Fertilisers & Petrochemicals Corp. Ltd. ITA. No.2183/Mum./2021
In the result, appeal by the Revenue is dismissed. Order pronounced in the open court on 09/06/2022