Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “I” MUMBAI
Before: SHRI D.T. GARASIA & SHRI N.K. PRADHAN
ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the assessee. The relevant assessment year is 2009-10. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-51, Mumbai and arises out of the assessment completed u/s 143(3) r.w.s 147 of the Income Tax Act 1961, (the ‘Act’).
The grounds of appeal
filed by the assessee read as under:
1. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in confirming the addition of Rs.11,28,149/- on account of alleged bogus purchase transaction.
2. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in ignoring the fact that reopening made by Ld. A.O in the present case u/s 147 is merely on the basis of the statement of certain parties made before the sales-tax authorities. The Ld. ought to have formed an independent belief that there is an escapement of income rather than merely relying on the information forwarded by the Sales Tax Authorities and the Investigation Wing of the Income Tax Department.
3. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in sustaining the addition made by the Ld. A.O without appreciating the fact that the appellant has not been specifically named in the confession or also the opportunity to the appellant has not been given for cross-examination of the statement / confession of the alleged parties which would have been recorded by the Sales Tax Department during the course of investigation.
4. On the facts and circumstances of the case and in law the Ld. CIT (A) erred in not considering the submissions of the appellant that the purchases are genuine purchases for which the Appellant had duly furnished the invoices, copies of bank statement supporting the payment made through banking channel i.e. by account payee cheque only and thereby discharged the onus regarding purchases made by Appellant.
5. On the facts and circumstances of the case and in law the Ld. CIT (A)erred in appreciating that the Ld. A.O. has not doubted the subsequent sale of such goods, the purchases of which has been alleged to be bogus. Therefore, the sustained addition of bogus purchases would tantamount to a dual addition which is not permissible.
3. Briefly stated, the facts of the case are that the assessee filed his return of income for the AY 2009-10 on 23.09.2009 declaring total income at Rs.48,80,750/-. The AO completed the assessment u/s 143(3) on 27.12.2011 assessing the total income at Rs.53,67,706/-. The AO then received information from the Director General of Income Tax (Inv.), Mumbai that the assessee had availed bogus purchases amounting to Rs.11,28,429/- from nine hawala dealers. On the basis of the above information, the AO reopened the earlier assessment by issuing notice u/s 148. In the reassessment proceedings, the AO issued notice u/s 133(6) to the said parties to verify the genuineness of transactions. However, the said notices were returned unserved by the postal authorities. The AO then requested the assessee to produce the above parties for verification. However, the assessee failed to do so. The AO observed that the assessee failed to produce before him any stock register. In view of the above, the AO made an addition of Rs.11,28,429/- on account of accommodation entries.
4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that the Ld. CIT(A) has agreed with the reasons given by the AO and dismissed the appeal filed by the assessee. 5. Before us, the Ld. counsel of the assessee files copy of the ledger account of the said parties, chart of purchases and corresponding payment, sample copy of invoices, bank statement. It is submitted by him that the assessee should have been given opportunity to cross- examine the said parties.
6. On the other hand, the Ld. DR submits that as the assessee failed to produce the said parties for examination and as no stock register was maintained, the AO has rightly made an addition of Rs.11,28,429/- on account of accommodation entries. He supports the order passed by the Ld. CIT(A).
We have heard the rival submissions and perused the relevant materials on record. We begin with the 2nd ground of appeal. We find that the AO had received specific information that the assessee had obtained bogus purchases to the extent of Rs.11,28,429/- from nine hawala traders, detected by the Sales Tax Department, Government of Maharashtra. Therefore, the AO has rightly reopened the assessment made earlier by issuing notice u/s 148. In view of the above, we dismiss the 2nd ground of appeal. 7.1 Now we deal with the 1st, 3rd, 4th and 5th ground of appeal together as they address a common issue. The fact remains that after the notice u/s 133(6) issued by the AO came back unserved by the postal authorities, he had requested the assessee to produce the above parties for examination. The assessee failed to produce the above parties before the AO. We are of the considered view that the contentious issues in the instant case could be resolved by examining the above parties. It is the duty of the AO to enforce attendance of a witness if his evidence is material. At the same time the assessee must furnish the complete address of such person.