GGS DESIGNERS & FABRICATORS PRIVATE LIMITED,KALYAN vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KALYAN

ACIT Circle - 1 GGS Designers & Kalyan, Kalyan- Fabricators Pvt. Ltd. बिधम/ Dombivali, C/1/6, Godrej Park, Near Maharashtra Barave Village, Vs. Kalyan(w), Kalyan- Pin- Dombivali, Maharashtra-421301 स्थायीलेखासं./जीआइआरसं./PAN No. AAACG6142Q (अपीलाथी/Appellant) (प्रत्यथी / Respondent) : अपीलाथीकीओरसे/ Appellant by : Shri K. Lal Kaka, AR प्रत्यथीकीओरसे/Respondentby : Ms. N. Hemlatha, DR सुनवाईकीतारीख/ : 17.04.18 Date of Hearing घोषणाकीतारीख / : 16.05.18 Date of Pronouncement आदेश / O R D E R

Per Sandeep Gosain, Judicial Member:

GGS Designers & Fabricators Pvt. Ltd. Ground No. 1: Re-opening of Assessment Proceedings: - The Learned Assessing officer erred on facts and in Law in re-opening the said assessment uls 148 of the Income Tax Act 1961. The assessment was re-opened and made merely on the basis of information from the sales tax department.

Ground No. 2: - Addition on account of disallowance of Expenditure on Ad-hoc basis: - On the facts and circumstances of the case, the learnedCommissioner of Income Tax (Appeals-2), Pune, erred in facts and in law in confirming the addition ofRs.3, 00,000/- to the total income of the Company, on account of disallowance of expenditureon ad-hoc basis.

The learned Commissioner of Income Tax (Appeals-2), Punehas not taken into consideration the fact that the said expenditure is made purely as a business expediency.

As such the addition made on account of ad-hoc disallowance ofexpenditure amounting to Rs. 3, 00,000/- be deleted in totality.

GGS Designers & Fabricators Pvt. Ltd. Ground No.3: - Addition on account of unsubstantiated purchases: - On the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals-2), Pune, erred in facts and in law in confirming the addition of Rs. 2, 93,537/- to the total income of the Company, on account of disallowance of purchases on the basis of information received from Sales Tax department.

The learned Commissioner of Income Tax (Appeals-2), Pune has not taken into consideration the fact that the said creditors are genuine and the transactions are in the normal course of business.

As such the addition made on account of unsubstantiated purchases amounting to Rs. 2,93,537/- be deleted in totality.

Ground No. 4: - Summary Ground: - The appellant craves leave to add, alter and/or to amend the above grounds of appeal.

2. At the very outset, Ld. AR appearing on behalf of the assessee drawn our attention towards letter dated 20th Dec 2017 which relates to condonation of delay in filing appeal before GGS Designers & Fabricators Pvt. Ltd. Hon’ble ITAT. Ld. AR submitted that the present appeal could not be filed within time because the assessee was under a bonafide impression that the jurisdiction for filing the appeal lies with the ITAT, Pune and when the said appeal petition was not accepted in Pune, on the ground that the address of assessee is in Kalynaand due to which, there was a delay in filing the present appeal.

GGS Designers & Fabricators Pvt. Ltd.

Subsequently, information was received by the AO from the Sales Tax Department, Maharashtra who gave names and addresses and other relevant details of certain persons who had provided entries for bogus purchase bills to a large number of tax payers. This information also contained the details of the beneficiaries of such bogus purchases. Since the name of the assessee also appeared in the list of persons who had obtained such purchase bills from these entry providers.

In view of above, reopening proceedings were initiated by the AO. After providing opportunity of hearing to the assessee, assessment was reopened and additions were made on account of GGS Designers & Fabricators Pvt. Ltd. unsubstantial purchase and disallowance on account of unverifiable expenses vide order of assessment dated 23.03.15 passed u/s 144 r.w.s 147 of the I.T. Act.

Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties, dismissed the appeal of the assessee.

Now before us, the assessee has preferred the present appeal by raising the above grounds.

Ground No. 1. 6. This ground raised by the assesseerelates to challenging the order of Ld. CIT(A) in confirming the action of AO in re- opening the said assessment u/s 148 of the Income Tax Act 1961.

Moreover, no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld. CIT(A). Therefore, there are no reasons for us to interfere into or deviate from the findings so recorded by the Ld.CIT(A). Hence, we are of the considered GGS Designers & Fabricators Pvt. Ltd. view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, this ground raised by the assessee stands dismissed.

Ground No. 2. 8. This ground raised by the assessee relates to challenging the order of Ld. CIT(A) in confirming the addition ofRs.3, 00,000/- to the total income of the Company, on account of disallowance of expenditure on ad-hoc basis.

Before we decide the merits of the case, it is necessary to evaluate the orders passed by Ld. CIT(A). The Ld. CIT(A) has dealt with the above grounds raised by the revenue in its order. The operative portion of the order of Ld. CIT(A) is contained in para no. 6 of its order and the same is reproduced below:-

GGS Designers & Fabricators Pvt. Ltd.

After having gone through the facts of the present case as well as considering the orders passed by revenue authorities and submissions made by both the parties, we find that AO in the assessment order has clearly mentioned that although the assessee has claimed various expenses, but the same could not be verified as no documentary evidence was filed by the assessee in support of claim of his expenses. Now, before us, Ld. AR reiterated the same arguments as were raised before the revenue authorities.

GGS Designers & Fabricators Pvt. Ltd. From the orders passed by revenue authorities, it is clearly mentioned that assessee had not filed any documentary evidence in support of his claim. Ld. AR submitted that no opportunity was granted by the revenue authorities to submit the documentary evidence. Be that as it may, considering the facts and circumstances of the present case, we restore the matter back to the file of AO with a direction to pass afresh order on this ground after providing opportunity of the assessee. It is needless here to mention that assessee shall not take adjournment without a valid reason. It is also made clear that assessee shall extend all necessary cooperation to the AO in expeditious disposal of this matter. Before parting, we may make it clear that our decision to restore the matter back to the file of AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the AO independently in accordance with law. Resultantly this ground raised by the assessee are allowed for statistical purposes.

GGS Designers & Fabricators Pvt. Ltd. Ground No. 3. 10. This ground raised by the assessee relates to challenging the order of Ld. CIT(A) in confirming the additions of Rs. 2,93,537/- being disallowance of purchase from entry providers.

GGS Designers & Fabricators Pvt. Ltd. During the appellate proceedings, the assessee relied upon all the facts filed alongwith Form No. 35 and the same is reproduced at para no 5.2 of the order of Ld. CIT(A). We further notice that assessee had not filed any fresh documents in support of genuineness of its claim, whereas on the contrary, Ld. AR while drawing our attention to the facts of the case, had submitted that the purchases were made by the assessee in an ordinary course of business and thus the same were bonafide, genuine and were made in good faith. It was further argued that such suppliers had issued tax invoices which contains details such as VAT details, serial no, date, challan no, etc. Copies of ledger account, tax invoices, purchase orders, delivery challans and bank statements were also enclosed alongwith written submissions before Ld. CIT(A). Ld. AR while drawing our attention towards written submissions had categorically submitted that supporting documents were filed, but no considered by Ld. CIT(A). Whereas Ld. CIT(A) has categorically denied filing any fresh documents in support of the genuineness of the claim raised by the assessee.

GGS Designers & Fabricators Pvt. Ltd. Be that as it may, we find that the entire controversy in the present case revolves around the documents which were allegedly filed by the assessee. Ld. CIT(A) has taken a specific stand that no documents were filed by the assessee during the assessment proceedings as well as appellate proceedings. In such circumstances, we are of the considered view that the interest of justice will be met in case, we restore this ground back to the file of AO for passing afresh order. Accordingly, we restore this ground back to the file of AO with a direction to allow the assessee to file the documents in support of his claim and to verify such documents, if so filed by the assesses and thereafter pass afresh order. It is needless here to mention that assessee shall not take adjournment without a valid reason. It is also made clear that assessee shall extend all necessary cooperation to the AO in expeditious disposal of this matter.

Before parting, we may make it clear that our decision to restore the matter back to the file of AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the AO independently GGS Designers & Fabricators Pvt. Ltd. in accordance with law. Resultantly this ground raised by the assessee is allowed for statistical purposes.

Ground No. 4 12. This ground is general in nature, thus requires no specific adjudication.