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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE
Before: SHRI D. KARUNAKARA RAO, AM
आदेश/ ORDER
PER D. KARUNAKARA RAO, AM :
There are two appeals under consideration relating to assessment years 2009-10 and 2010-11. Both the appeals are in connection with the re-assessment proceedings involving alleged bogus purchases.
Identical grounds raised by the assessee in both the appeals. For the sake of convenience, the grounds of appeal in ITA No.2763/PUN/2017 read as under : - “1. On the facts and circumstances of the case, the reassessment proceedings u/s 147 being initiated in absence of material showing escapement of income in the hands of the appellant is void and may kindly
ITA Nos.2763 & 2765/PUN/2017
be cancelled. The material based for reopening is vague and has no live link with escapement of income in the hands of the appellant. 2. The learned CIT(A) erred in law and on facts in confirming addition of Rs.10,57,705/- on account of inflated purchases alleged to be bogus. 3. The learned CIT(A) erred in law and on facts in confirming the addition inspite of holding that the ld. A.O. has not brought on record any evidence to prove that the purchases were bogus and further ignoring the evidence produced in support of the purchases. 4. The appellant craves to add, alter, modify or substitute any ground of appeal at the time of hearing.”
Briefly stated relevant facts include that the assessee is a company
engaged in the business of manufacture of WTP Plants, reseller in specialty
chemicals and job work charges. The assessee filed its return of income on
29.09.2009 declaring total income of Rs.3,68,020/-. The Assessing Officer
completed the assessment u/s 143(3) r.w.s. 147 on 05.02.2015 and made
an addition of Rs.10,57,705/- on account of bogus purchases.
Aggrieved with the order of Assessing Officer, the assessee filed an
appeal before the CIT(A). Rejecting the various explanations of the
assessee, the CIT(A) sustained the addition made by the Assessing Officer.
Aggrieved with the order of CIT(A) sustaining the addition, the
assessee is in appeal before me raising the aforementioned grounds.
At the outset, deviating from the grounds, ld. Counsel for the
assessee submitted that this is the case of alleged bogus purchase and the
Assessing Officer made addition on entire purchases as additional income
of the assessee in both the years. The CIT(A) confirmed the said additions
ignoring the fact that the GP rates are normally confirmed.
-3- ITA Nos.2763 & 2765/PUN/2017
On these facts, the ld. Counsel for the assessee fairly submitted that
these orders of the CIT(A) were passed in the month of August, 2017
without benefit of assistance of the decision of the Pune Bench of the
Tribunal in the case of M/s Chhabi Electricals Pvt. Ltd. vs. DCIT vide ITA
No.795/PUN/2014, order dated 28.04.2017. The ld. Counsel for the
assessee submitted that the said order was passed by the Tribunal in the
month of April, 2017. The ld. Counsel for the assessee submitted that the
lower authorities did not have the benefit of copy of the same despite the
fact that the order passed by the Tribunal in the month of April, 2017. The
ld. Counsel further submitted that the matter may be remanded to the file
of the Assessing Officer for finding the GP computation of the said bogus
purchases in accordance with the order the of the Tribunal so called.
8. On hearing both the sides, I find such issues on merits are to be On hearing both the sides, I find such issues on merits are to be
decided in the light of the said order of the Co-ordinate Bench of the
Tribunal in the case M/s Chhabi Electricals Pvt. Ltd. (supra). It is a settled
legal proposition that such cases of the bogus purchases are classified into
four groups. The assessee should fall in one of the four categories specified
in the said decision of the Tribunal in the case of M/s Chhabi Electricals
Pvt. Ltd. (supra). In the remand proceedings, I direct the Assessing Officer
to examine the facts of the present case and analyse the details and also
classify the same into one of the four categories already considered by the
Tribunal in the case of M/s Chhabi Electricals Pvt. Ltd. (supra). The
Assessing Officer should grant a reasonable opportunity of being heard to
the assessee in accordance with the principles of natural justice and pass a
speaking order on the issue raised by the assessee. Accordingly, the
-4- ITA Nos.2763 & 2765/PUN/2017
grounds raised by the assessee in both the appeals are allowed for statistical purposes.
In the result, both the appeals of the assessee are allowed for statistical purposes.
Order pronounced on this 20th day of November, 2018.
Sd/- (D. KARUNAKARA RAO) लेखासद�य/ ACCOUNTANT MEMBER पुणे/ Pune; �दनांकDated : 20th November, 2018. Sujeet आदेशक���त�ल�पअ�े�षत/Copy of the Order is forwarded to : अपीलाथ�/ The Appellant; 1. ��यथ�/ The Respondent; 2. 3. 3. The CIT(A)-6, Pune; The CIT(A)-6, Pune; 4. The Pr. CIT-5, Pune; �वभागीय��त�न�ध, आयकरअपील�यअ�धकरण, पुणे“एक-सद�यमामला” / 5. DR ‘SMC’, ITAT, Pune; गाड�फाईल/ Guard file. 6.
// True Copy // आदेशानुसार/ BY ORDER,स
स�या�पत ��त//True Copy// Senior Private Secretary आयकरअपील�यअ�धकरण ,पुणे/ ITAT, Pune