ITO-19(3)(1), MUMBAI vs. SURENDRA KUMAR LADURAM GUPTA, MUMBAI

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ITA 3537/MUM/2023Status: DisposedITAT Mumbai09 December 2024AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed the Revenue's appeal. The primary reason for dismissal was that the tax effect relating to the grounds of appeal, as stated in column 10 of Form No. 36, was Rs. 54,02,573. This amount was below the monetary limit of Rs. 60 lakh applicable to appeals before the Tribunal, as per CBDT Circular No. 9 of 2024, dated 17/09/2024. Therefore, the appeal was dismissed on this procedural ground. The Revenue was granted liberty to seek recall of the order if it was later found that the appeal fell under any exceptions provided in the said circular. The Tribunal did not adjudicate on the merits of the grounds raised by the Revenue regarding the deletion of the addition for bogus purchases.

What were the facts?

The Revenue has filed an appeal against the order dated 07.08.2023 of the learned CIT(A) for the assessment year 2012-13. The appeal challenges the deletion of an addition of Rs. 1,79,77,391 made by the Assessing Officer (AO) on account of bogus purchases from two parties, M/s. A2 Jewels and M/s. Nice Diamonds. The AO's action was based on information received from the DGIT(Inv.), Mumbai, and a statement recorded under section 132(4) of the Act from Mr. Bhanwarlal Jain, who allegedly admitted to managing these entities for providing accommodation entries without actual delivery of goods. The assessee is Surendra Kumar Laduram Gupta.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the entire addition of Rs. 1,79,77,391 made on account of bogus purchases from M/s. A2 Jewels and M/s. Nice Diamonds, by ignoring that the DGIT(Inv.) had proved the involvement of Mr. Bhawarlal Jain and his group concerns in providing accommodation entries for sales and purchases without actual delivery of goods, and that the assessee was a beneficiary? 2. Whether, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 1,79,77,391 made on account of bogus purchases from M/s. A2 Jewels and M/s. Nice Diamonds, without appreciating that Mr. Bhanwarlal Jain's statement under section 132(4) categorically stated that these entities were managed by him for providing accommodation entries only? 3. Whether, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 1,79,77,391 made on account of bogus purchases from M/s. A2 Jewels and M/s. Nice Diamonds, by ignoring that the AO's action was based on credible information from DGIT(Inv.) and that the assessee failed to prove the genuineness of the purchase transactions during assessment proceedings? 4. Whether, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in deleting the addition of Rs. 1,79,77,391 made by the AO, without appreciating the ratio in N.K. Proteins Ltd., wherein it was held that entire purchases are liable to be disallowed when from bogus suppliers? 5. Whether, on the facts and in the circumstances of the case and in law, the learned CIT(A) erred in accepting facts by relying on Andaman Timber Industries Vs CCE, which are distinct from the present case, while ignoring the AO's relied upon case which was squarely applicable? Assessee's contentions: Not recorded. Revenue's contentions: The learned CIT(A) erred in deleting the addition by ignoring the findings of DGIT(Inv.), the statement of Mr. Bhanwarlal Jain, the failure of the assessee to prove genuineness of purchases, and by misapplying the ratio of N.K. Proteins Ltd. and Andaman Timber Industries.

Which sections of the Income-tax Act were involved?

Section 250,Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI

Before: SHRI AMARJIT SINGH & SHRI SANDEEP SINGH KARHAIL

For Appellant: Shri S.L. Piddar
For Respondent: Shri Bhangepatil Pushkaraj Ramesh, Sr. DR
Hearing: 07.10.2024Pronounced: 09.12.2024

O R D E R

PER AMARJIT SINGH, ACCOUNTANT MEMBER:

1.

The Revenue has filed the present appeal against the impugned order dated 07.08.2023 of the ld. CIT(A) passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“learned CIT(A)”], for the assessment year 2012–13.

2.

In its appeal, the Revenue has raised the following grounds: - “1. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in deleting the entire addition of Rs. 1,79,77,391/ made on account of bogus purchases from two parties namely, M/s. A2 Jewels and M/S. Nice Diamonds, by ignoring the fact that DGIT) Inv.) had proved beyond doubt that Mr. Bhawarlal Jain & His Group concerns were Surendra Kumar Laduram Gupta A.Y. 2012-13 involved in providing accommodation entry of Sales and purchases without actual delivery of goods and the assessee was one of the beneficiary who accepting accommodation entries for the purchases of goods ?

2. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in deleting the entire addition of Rs. 1,79,77,391/ made on account of bogus purchases from two parties namely, M/s. A2 Jewels and M/S. Nice Diamonds, without appreciating the facts that during the Search Operation an statement recorded u/s 132(4) of the Act, of Mr. Bhanwarlal Jain, in which he has categorically stated that those two entities to whom the assessee claimed to have made purchases are managed and controlled by him for providing the accommodation entry only with no real business ?

3. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in deleting the entire addition of Rs. 1,79,77,391/ made on account of bogus purchases from two parties namely, M/s. A2 Jewels and M/S. Nice Diamonds, by ignoring the fact that the action of the Assessing Officer was based on credible Information received from the DGIT(Inv.), Mumbai and that the assessee during the course of assessment proceedings failed to prove the genuineness of the of the purchase transactions?

4. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in deleting the addition made by the Assessing Officer amounting to Rs.1.79,77,391/-without appreciating the ratio in the decision of the Hon'ble Supreme Court in the case of N.K. Proteins Ltd., wherein the Court has held that when the purchases are from bogus suppliers, the entire purchases are liable to be disallowed?

5. Whether on the facts and in the circumstances of the case and in law, the Ld CIT(A) has erred in accepting the facts by relying on the decision of Hon'ble Supreme Court in the case of Andaman Timber Industries Vs CCE in CIVIL APPEAL No. 4228 of 2006 dated. 02.09.2015 which are totally distinct and distinguishable from the facts of the instance case, whereas has ignored the case on which the AO has relied upon was squarely applicable in this case?

6. The appellant craves leave to amend or alter any grounds or add a new ground which may be necessary?”

Surendra Kumar Laduram Gupta A.Y. 2012-13 3. At the outset, we find that in column 10 of Form No. 36 filed by the Revenue, the tax effect relating to the grounds of appeal raised by the Revenue is mentioned as Rs.54,02,573/-, which is below the monetary limit of Rs.60 lakh, applicable to appeals before the Tribunal, as per CBDT Circular no.9 of 2024, dated 17/09/2024. Therefore, in view of the aforesaid, Revenue’s appeal deserves to be dismissed. However, the Revenue is granted the liberty to seek recall of this order if, at a later point in time, it is found that the appeal falls under any of the exceptions provided in the Circular referred to above.

4.

In the result, the appeal of the Revenue is dismissed.

Order pronounced in the open court on 09.12.2024.

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