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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER PER R.S.SYAL, VP :
These three appeals filed by the Revenue relate to assessment years 2009-10 to 2011-12. Since common issues are raised in these appeals, we are, therefore, proceeding to dispose them off by this consolidated order for the sake of convenience.
A.Y. 2009-10 : 2. The first issue raised in this appeal is against the deletion of addition of Rs.2,03,58,071/- in respect of bogus purchases.
2 ITA Nos.218 to 220/PUN/2017 M/s. Steel Point
Briefly stated, the facts of the case are that an information
was received from the Director of Income-tax (Investigation), Pune
regarding the beneficiaries in hawala transactions detected by the
Sales Tax Department of Maharashtra Government. One of the
beneficiaries, in a such list, was the assessee also. A survey action
was taken u/s.133A of the Income-tax Act, 1961 (hereinafter also
called ‘the Act’) on 21-03-2013 at the business premises of the
assessee firm. The information received from the Director of
Income-tax (Investigation), Pune was verified in as much as the
assessee had recorded purchases from the hawala parties to the
tune of Rs.2,03,58,071/-. The AO made addition for the equal
amount, which came to be deleted by the ld. CIT(A). Aggrieved
thereby, the Revenue has come up in appeal before the Tribunal.
We have heard both the sides and gone through the relevant
material on record. It is seen that several assessees had obtained
bogus purchases from such hawala parties. The Pune Benches of
the Tribunal has disposed off a group of similar cases. Vide the
lead order in the case of M/s. Chhabi Electricals Pvt. Ltd. and
others Vs. DCIT dated 28-04-2017 in ITA No.795/PUN/2014 and
others, the Tribunal has made certain categories. Finding in
ITA Nos.218 to 220/PUN/2017 M/s. Steel Point
respect of category No. IV of the said order, which is germane to
the instant appeal, is as under :
“IV. The next instance is the case of goods which have been admittedly sold by the hawala dealer and has been received by the assessee, who in turn had maintained quantitative details and also evidence of its movement i.e. transportation details and quality control details of consumption of the said material or exact details of sale of the same consignment through same transporter directly to the party, then the total purchases cannot be added in the hands of assessee. However, since the purchases are made from the grey market, some estimation needs to be made in the hands of assessee. The Tribunal in M/s. Chetan Enterprises Vs. ACIT (supra) has already held that the addition be made by estimating the same @ 10% of the alleged hawala purchases, over and above the GP shown by the respective assessee.”
Going by the ratio laid down in the case of M/s. Chhabi
Electricals Pvt. Ltd. and others (supra), which has been followed in
innumerable cases, we hold that the addition should have been
sustained on the amount of hawala purchases @10% plus the
normal GP rate shown by the assessee for the year. We, therefore,
set aside the impugned order and remit the matter to the file of AO
for re-computing the amount of addition @10% plus the normal
gross profit rate shown by the assessee for this year on the bogus
purchases.
The only other effective Ground No.4 reads as under :
“4. On the facts and circumstances of the case, whether the ld.CIT(A)-2, Nashik was justified in holding that notice u/s.143(2) is mandatory before passing the order u/s.147, when the Act has given immunity to the AO u/s.292BB that
4 ITA Nos.218 to 220/PUN/2017 M/s. Steel Point
when no objection is taken regarding this during the assessment proceeding, the objection is not sustainable.”
Facts apropos this ground are that the assessee contended
before the ld. CIT(A) for the first time that no notice u/s.143(2) of
the Act was issued and hence, the proceedings be quashed. The ld.
CIT(A) called for a report from the AO. Vide the remand report
dated 15-09-2016, the AO wrote that notice u/s.143(2) was issued
on 22-11-2013 but acknowledgement for service of above notice
was not found on record. Even the order sheet entry dated 22-01-
2013 properly recorded that notices u/s.143(2) and 142(1) were
issued fixing the case for hearing on 29-01-2013 at 4.30 pm. The
ld. CIT(A) observed that the AO has not made a mention of issuing
notice u/s.143(2) in the assessment order. He, however, did not
adjudicate on the issue of validity of reassessment on this score in
view of the fact that addition itself was deleted.
We have heard both the sides and gone through the relevant
material on record. It is seen that the ld. CIT(A) has not adversely
adjudicated on the so-called non-issuance of notice u/s.143(2) qua
the Revenue, though he recorded in the impugned order that the
AO admitted to have issued such a notice. As such, the Revenue
can have no grievance against such non-adjudication. The assessee
5 ITA Nos.218 to 220/PUN/2017 M/s. Steel Point
has neither preferred any cross objection nor taken recourse to any
other legal remedy challenging the validity of assessment in view
of the alleged non-issuance of notice u/s.143(2). As such, the
ground raised by the Revenue is dismissed.
A.Yrs. 2010-11 and 2011-12 :
Both sides are in agreement that the facts and circumstances
for these years are mutatis mutandis similar to those of the
preceding year 2009-10. But for the difference in the amount of
hawala entries recorded by the assessee, the facts are admittedly
similar. Following the view taken hereinabove for the A.Y. 2009-
10, we direct the AO to re-compute the amount of addition in the
light of our above observations, that is, 10% over and above the
normal G.P. rate of the respective year on the amount of hawala
purchases.
The other ground on the validity of reassessment for the
reason of non-issuance of notice is similar to that of the preceding
year. The same is dismissed as not arising out of the impugned
order.
6 ITA Nos.218 to 220/PUN/2017 M/s. Steel Point
In the result, all the three appeals are partly allowed for
statistical purposes.
Order pronounced in the Open Court on 07th March, 2019.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT
पुणे Pune; �दनांक Dated : 07th March, 2019 सतीश
आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: अ�ेिषत
अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. 3. The CIT(A)-2, Nashik 4. The Pr.CIT-2, Nashik िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे 5. “बी” / DR ‘B’, ITAT, Pune; 6. गाड� फाईल / Guard file. / True copy // आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
ITA Nos.218 to 220/PUN/2017 M/s. Steel Point
Date 1. Draft dictated on 06-03-2019 Sr.PS 2. Draft placed before author 06-03-2019 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *