INCOME-TAX OFFICER vs. M/S. METAL UNITED ALLOYS FUSION PRODUCTS LTD., NASHIK

आदेश / ORDER PER ANIL CHATURVEDI, AM :

These two appeals filed by the Revenue are emanating out of 1. separate orders of Commissioner of Income Tax (A) – 1, Nashik both dated 04.07.2016 for the assessment years 2009-10 and 2011-12.

ITA Nos.2285 & 2287/PUN/2016

appeals are identical except the assessment years and the

amounts involved and therefore the submissions made by them

while arguing one appeal would be equally applicable to the other

appeal also and thus, both the appeals can be heard together. In

view of the aforesaid submissions of both the parties, we, for the

sake of convenience, proceed to dispose of both the appeals by a

consolidated order but however, proceed with narrating the facts in

ITA No.2285/PUN/2016 for assessment years 2009-10 & 2011-12.

are as under :-

Assessee is a company stated to be engaged in the business

of trading of iron and steel and labour charges. Assessee

electronically filed its return of income for A.Y. 2009-10 on

23.09.2009 declaring total income at Rs.Nil. The return of income

was initially processed u/s 143(1) of the Act. Subsequently, the

case was re-opened by issuing notice u/s 148 of the Act which was

issued on 27.09.2013 and served on the assessee. Thereafter, the

case was taken up for scrutiny and assessment was framed u/s

143(3) r.w.s. 147 of the Act vide order dt.30.03.2015 and the total

income was determined at Rs.93,67,890/-. Aggrieved by the order

of AO, assessee carried the matter before Ld.CIT(A), who vide order

dt.04.07.2016 (in appeal No.Nsk/CIT(A)-1/151/2015-16) granted

partial relief to the assessee. Aggrieved by the order of Ld.CIT(A),

Revenue is now in appeal before us and has raised the following

grounds :

ITA Nos.2285 & 2287/PUN/2016

“1. Whether on the facts and in the circumstances of the case, the Learned CIT(A)-1, Nashik was justified in deleting the addition of Rs.93,67,890/- on account of alleged bogus purchases from Hawala dealers/parties? 2. Whether on the facts and in the circumstances of the case, the Learned CIT(A)-1, Nashik was justified in deleting the addition on the basis of the section 292BB which is mainly for the reference to the notice issue? 3. Whether on the facts and in the circumstances of the case, the Learned CIT(A)-1, Nashik was justified in deleting the purchases treated as bogus on the basis of the objection raised by the assessee and ignoring that the case falls under section 292B which provides that an assessment would not be invalidated simply by an omission or mistake ? 4. Whether the Learned CIT(A)-1, Nashik erred in assuming the objections raised by the assessee as u/s 292BB, which only refers to the issue of notice and the objections raised were regarding the validity of proceedings initiated by the AO u/s 147 and reasons recorded by the AO ? 5. The appellant prays that the order of the Learned CIT(A)-1, Nashik may please be cancelled and the order of Assessing officer may please be restored.”

No.2287/PUN/2016 for A.Y. 2011-12.

together.

Investigation Section wherein Sales Tax Department has informed

that assessee has made purchases aggregating to Rs.69,53,972/-

from party namely Jain Corporation, who was a hawala party.

Based on the aforesaid information, the case of the assessee was

re-opened by issuing notice u/s 148 of the Act. During the course

of re-assessment proceedings, assessee was asked to prove the

purchases and produce the necessary evidence like purchase bills,

delivery challans, payment details, stock register etc., Assessee

ITA Nos.2285 & 2287/PUN/2016

had filed certain details and also submitted that the purchases are

genuine. The submission of the assessee was not found acceptable

to the AO as he was of the view that assessee has failed to

discharge the onus cast upon him and has not produced the

parties nor had provided any details which could help him to verify

the purchases. He accordingly considered the purchases of

Rs.69,53,972/- as to be bogus and added to the income. Aggrieved

by the order of AO, assessee carried the matter before Ld.CIT(A).

Before Ld.CIT(A), assessee objected to the re-opening of the

assessment wherein inter-alia it was submitted that re-assessment

order was framed without disposing the objections filed by the

assessee and relying on the decisions cited before Ld.CIT(A), it was

prayed that the assessment be held to be bad-in-law.

and also the decisions of Bombay High Court in the case of M/s.

Bayer Material Sciences Pvt. Ltd., in WP.No.2502 of 2015

dt.27.01.2016 and the decision of Hon’ble Gujarat High Court in

the case of General Motors India reported in 354 ITR 244 held that

AO had not disposed the objections filed by the assessee either

before the completion of the assessment nor during the

assessment. She therefore, following the aforesaid decisions of

Hon’ble Bombay High Court and Gujarat High Court, held that the

assessment order to be bad-in-law. Aggrieved by the order of

Ld.CIT(A), Revenue is now in appeal before us.

ITA Nos.2285 & 2287/PUN/2016

facts in assessee’s own case for A.Y. 2010-11, the Co-ordinate

Bench of the Tribunal (in ITA No.2286/PUN/2016 and

C.O.No.39/PUN/2016 order dt.21.04.2017) has upheld the

quashing of the re-assessment order by holding it to be bad-in-

law. He placed on record the copy of the aforesaid decision and

pointed to the relevant findings. He submitted that the facts of the

case in the year under appeal are identical to that of assessee’s

own case in A.Y. 2010-11 and therefore no interference to the order

of Ld.CIT(A) is called for. Ld.D.R. on the other hand, did not

controvert the submissions made by Ld.A.R. but however

supported the order of AO.

material on record. We find that Ld.CIT(A) after considering the

decision of Hon’ble Bombay High Court in the case of M/s. Bayer

Material Sciences Pvt. Ltd., (supra) and the decision of Gujarat

High Court in the case of General Motors India (supra) held that

the AO did not dispose of the objections filed by the assessee and

therefore held the re-assessment order to be bad-in-law. We find

that on identical facts in assessee’s own case for A.Y. 2010-11 in

ITA No.2286/PUN/2016 & C.O.No.39/PUN/2016 order

dt.21.04.2017 re-assessment order was held to be bad in law by

observing as under :

“5. On perusal of the order of CIT(A), it transpires that the issue which was adjudicated by the CIT(A) was the exercise of jurisdiction under section 147/148 of the Act. The Assessing Officer after recording reasons for reopening the assessment, had issued notice under section 148 of the Act. The assessee in reply, filed the return

ITA Nos.2285 & 2287/PUN/2016

of income and asked for reasons recorded for reopening the assessment. The said reasons were supplied to the assessee, who filed objections against the said reasons. The Assessing Officer was required to dispose of objections by passing a separate and speaking order, which was not passed. The CIT(A) relied on the ratio laid down by the jurisdictional High Court in the case of M/s. Bayer Material Sciences Pvt. Ltd. in W.P. No.2502 of 2015, judgment dated 27.01.2016 and held that where the objections have not been disposed of by the Assessing Officer, then the assessment order passed is bad in law and was quashed.”

stayed or over-ruled by Higher Judicial Authorities. Before us,

Revenue has also not placed any material on record to point out

any distinguishing feature in the facts of the present case and that

of earlier year nor has placed any contrary binding decision in its

support. We therefore following the decision of Co-ordinate Bench

of the Tribunal in assessee’s own case in A.Y. 2010-11, find no

reason to interfere with the order of Ld.CIT(A) and thus the

grounds of the Revenue are dismissed.

No.2285/PUN/2016 for A.Y. 2009-10 is dismissed.

No.2287/PUN/2016 for A.Y. 2011-12 are concerned, in view of the

submissions of both the parties that the facts of the case in the

year being identical to the facts and issue of the case in ITA

No.2285/PUN/2016 for A.Y. 2009-10, we therefore for the reasons

stated herein while disposing of the appeal in ITA

No.2285/PUN/2016 for A.Y. 2009-10, and for similar reasons,

hold that the re-assessment order to be bad-in-law and thus we

ITA Nos.2285 & 2287/PUN/2016

dismiss the grounds of Revenue in ITA No.2287/PUN/2016 for A.Y.

2011-12. Thus, the grounds of the Revenue are dismissed.

No.2287/PUN/2016 for A.Y. 2011-12 is dismissed.

Order pronounced on 25th day of January, 2019.

Sd/- Sd/- (P.S. CHAUDHURY) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER

पुणे Pune; �दनांक Dated : 25th January, 2019. Yamini

आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to :

आदेशानुसार/ BY ORDER

// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.