DIPAKKUMAR PUSHKARRAY VYAS,AHMEDABAD vs. THE ITO, WARD-1(3)(1), AHMEDABAD

[3] On the facts and in the circumstances of the case, the Learned AO Ward-1(3)(1), Ahmedabad. Income Tax Department has erred, both on facts and in law, as the assessment was reopened u/s 147 on basis of information received from ITO (Inv.) unit-2 Ahmedabad without application of mind, as the very same information was available in assessment record of assessee on the basis of which the assessment was completed u/s 143(3) and learned A O could not be permitted to change his opinion based on same information.

[4] The Order passed u/s. 143(3) r.w.s. 147 of the IT Act, 1961 on 16/12/2019 for Assessment Year 2012-13, by Learned A.O. Ward-1(3)(1), Ahmedabad, Income Tax Department making addition of Rs. 41,99,500/-is wholly illegal, un-law full proceedings its self were and an abuse of process of law and impugned order has been made in violation of the principals of natural justice.

[5] On the facts and in the circumstances of the case, the Learned A. O Ward-1(3)(1), Ahmedabad, Income Tax Department has erred, both on facts in law in rejecting the contention of the assessee that the initiation of the re-assessment proceedings and the re-assessment order are bad, both on the facts and in law as the Income has been assessed without rejection of Books as unreliable u/s 145 of the IT Act and liable to be quashed, as statutory conditions and procedure prescribed under the statute have not been complied with.

[6] On the facts and in the circumstances of the case, the Learned A.O Ward-1(3)(1), Ahmedabad, Income Tax Department has erred, both on facts in law in rejecting the contention of the assessee that the re-assessment proceedings initiated by the Learned A. O are bad in the eyes of law, as the reasons recorded, which are vague and have been recorded without application of mind on the 2 [7] That the reopening is bad in law since there is mechanical application of mind while granting the approval u/s 151 for issuance of notice u/s 148.

[8] The Learned Assessing Officer has failed to appreciate the various Judgments more particularly CIT v Simit P. Sheth wherein addition sustained was too high considering the fact that assessee was dealing in trading activities and has declared only 0.10% in the Financial year 2010-11 relevant to the AY 2011-12 and 0.07% in the Financial year 2011-12 relevant to the AY 2012- 13.

[9] The Learned Assessing Officer has grievously erred in law and or on facts in not considering fully and properly the explanations furnished and the evidence produced by the appellant.

[10] The Learned Assessing officer has grievously erred in making addition of variation in respect of unexplained Income from undisclosed sources, by not providing cross examination though requested, without giving sufficient and specific opportunity to the appellant and thereby violating the principles of natural justice. The Appellant should therefore be allowed to produce additional evidences during the course of appellant proceeding and should be admitted.

[11] The Learned Assessing officer has grievously erred in making addition of variation in respect of unexplained Income from undisclosed sources though, the sales of Rs.41,99,500/- made to M/s. Akshar Corporation prop. Shripal Pravinchandra Shah was recorded in the Books of Account and the payment has been received through banking channel only, which are audited by Chartered Accountants.

[12] That the learned Assessing officer has grievously erred in not considering the explanation of the appellant in regards to the credit is prima facie reasonable even though the same has been rejected on capricious and arbitrary grounds [13] That the learned Assessing officer has grievously erred in not considering the fact that books of accounts were audited by Chartered Accountants wherein appellant has maintained stock account and there could be no inference on suppression of sales.

[14] That the learned Assessing officer has grievously erred in not considering the fact that after recording purchase and sale in the books of account only profit element should brought to tax which the assessee has already offered to tax. 3 [15] That on the facts and in law, the learned assessing officer erred making an addition without any incriminating material as to a bogus sale though it was accounted for in the books of account.

[16] That on the facts and in law the learned assessing officer ought to have given the benefit of purchase against sales as the Learned A.O. has accepted purchase.

[17] That on the facts and in law, the learned assessing officer failed to prove that amount returned back to the assessee, though assessee filed relevant documents, Ledger Accounts, Bank Statements details to prove genuineness of sales and payment were received through banking channel.

[18] That on the facts and in law, the learned assessing officer has made addition against bogus sales of same amount though the same has been recorded in the books of account, no addition could be made for similar amount in the hands of the assessee because it amounted to double taxation.

The Learned A.O had doubted sales as bogus and had made additions, it is not in dispute that, the sum of Rs.41,99,500/-has been credited in the sales account and had been duly included in the profit disclosed by the assessee in its income tax return therefore sales could not be treated as undisclosed income and no addition could be made once again in respect of same.

As long as stock is available and nothing adverse against the sale is found then sales cannot be doubted. Sale is offered as income hence the same cannot be added as it is a double addition.

[19] That the reopening on the basis of borrowed information by the AO from the information received from the ITO (Investigation) Unit-2 Ahmedabad vide letter no ITO(Inv) Unit-2/NV Report- Krupa/2018-19 dated 14/03/2019 received through email on 17/03/2019 against M/s Shripal Pravinchandra Shah Prop. Akshar Corporation without applying his independent mind and therefore was not justified.

[20] That the appellant has not committed default of Section 271(1)(C) of the IT Act as the sales has been recorded in the books of account and therefore there is no concealment of income and therefore proceedings initiated deserves to be cancelled.

[21] That the appellant has not committed default of Section 207 to 219 and interest charged under sections i.e. 234A, 234B,234C and 234D deserves to be deleted.

Dipakkumar Pushkarray Vyas, A.Y. 2012-13 [22] That the appellant craves leave to add, amend or alter any of the grounds of appeal It is therefore prayed that the addition of Rs.41,99,500/- made by the Assessing officer should be deleted.”

Dipakkumar Pushkarray Vyas, A.Y. 2012-13 Shripal Pravinchandra Shah, proprietor of M/s. Akshar Corporation was in the activity of accommodation entry provider. As per the information, Dipakkumar Pushkarray Vyas, prop. of Krupa Jewellers is one of the entities who has made transaction with M/s. Akshar Corporation during 2011-12 which was sham and bogus. As per the bank statement of M/s. Akshar Corporation total amount of Rs. 41,99,500/- is debited in the bank account of M/s. Krupa Jewellers during assessment year 2012-13 and thus the same was held by the Assessing Officer as bogus entered to accommodate the unaccounted income of the assessee. The Assessing Officer treated the same as unexplained income from undisclosed source and added the same to the total income of the assessee.

Dipakkumar Pushkarray Vyas, A.Y. 2012-13 The ld. A.R. submitted that books of accounts were duly audited and the assessee was opening stock account and therefore there was no suppression of sales as contended by Assessing Officer. The ld. A.R. submitted that recording purchase and sales in the books of accounts then only profit element should be taxed which the assessee has already offered to tax. The ld. A.R. submitted that without any incriminating material as to a bogus sale, the Assessing Officer cannot give finding contrary to the same. The Assessing Officer should have given the benefit of purchase against sales as the Assessing Officer has accepted the purchase. The ld. A.R. submitted that amount returned back to the assessee, though assessee filed relevant documents; ledger accounts, bank statement, details to prove genuineness of sales and payments received through banking channel. The ld. A.R. further submitted that the Assessing Officer has made against bogus sales of same amount though the same was recorded in the books of account, therefore no addition could be made for similar amount in the hands of the assessee because it amounted to double taxation. The sum of Rs. 41,99,500/- has been credited in the sales account and was duly included in the profit disclosed by the assessee in its income tax return, therefore, sales could not be treated as undisclosed income and no addition could be made once again in respect of same. As long as stock is available and nothing adverse against sale is found then sales cannot be doubted. Sale is offered as income hence the same cannot be added as it is a double addition.

उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद 9