MAGAN V PRAJAPATI,MUMBAI vs. INCOME TAX OFFICER 19(2)(3), MUMBAI

PDF · subscribers
ITA 5639/MUM/2019Status: DisposedITAT Mumbai10 February 2020AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the ex parte order of the CIT(A) due to the lack of justification for the enhancement and the failure to provide the assessee with a reasonable opportunity of hearing. The matter was restored to the CIT(A) for a fresh decision on merits.

What were the facts?

The assessee, engaged in metal trading, was found to have taken accommodation bills for purchases without receiving goods. The AO added 12.5% of these bogus purchases, and the CIT(A) dismissed the appeal ex parte, enhancing the addition to 100%.

What were the issues?

Whether the CIT(A) was justified in enhancing the addition ex parte without proper justification and whether the assessee was denied a reasonable opportunity of hearing.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 37(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”, BENCH

Before: SHRI R.C.SHARMA, AM & SHRI VIKAS AWASTHY, JM

For Appellant: Shri Bharat Kumar (AR)
For Respondent: Shri Amit Pratap Singh (DR)
Hearing: 10/02/2020Pronounced: 10/02/2020

Assessee by Shri Bharat Kumar (AR) Revenue by Shri Amit Pratap Singh (DR) Date of Hearing 10/02/2020 Date of Pronouncement 10/02/2020 आदेश / O R D E R PER: R.C. SHARMA, A.M. These are the appeals filed by the assessee against the separate ex parte orders of the ld. CIT(A)-30, Mumbai dated 26/06/2019 and 25/06/2019 for the A.Y. 2009-10 and 2010-11 respectively in the matter of order passed U/s 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short, the Act).

2.

Rival contentions have been heard and record perused. Facts in brief are that the assessee is engaged in trading of ferrous and non- ferrous metals. The A.O. got information regarding assessee involved in taking accommodation bill with regard to purchases without delivery of purchases in assessee’s income. Against the order of the A.O., the assessee approached to the ld. CIT(A) who by passing ex parte order has dismissed the appeals of the assessee and also enhanced the addition to the extent of 100% of alleged bogus purchases.

3.

In the appeal order, the ld. CIT(A) has mentioned that various notices were issued to the assessee, however, there was no compliance by the assessee. Thereafter notices of enhancement were issued but there was no compliance. From the order of the ld. CIT(A), it appears that he has discussed various judicial pronouncements including the decision of the Hon’ble Bombay High Court in the case of M/s Mohommad Haji Adam & Co. wherein the Hon’ble High Court has upheld the order of the Tribunal for making addition only to the extent of differences between the gross profit offered in case of normal purchases vis a vis bogus purchases. However, the ld. CIT(A) did not accept the decision of the Hon’ble Bombay High Court on the plea that this decision is not based on an argument with respect of Section 37(1) of the Indian Evidence Act.

Accordingly, the ld. CIT(A) has observed that “with utmost respect, this decision, though no cited by the appellant, cannot be relied upon”.

4.

The ld. CIT(A) has not given any justification for enhancement of addition from 12.5% to 100%, therefore, in the substantial interest of justice, we set aside the ex parte order of the ld. CIT(A) and restore the merit after providing due and reasonable opportunity of hearing to the assessee.

5.

Since the facts and circumstances of both the years are same, therefore, by following the reasoning given in the appeal for the A.Y. 2009-10, I also restore the matter for the A.Y. 2010-11 to the file of the ld. CIT(A).

6.

In the result, both the appeals of the assessee are allowed for statistical purposes only.

Order pronounced in the open court on 10th February, 2020.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →