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Income Tax Appellate Tribunal, DELHI BENCH ‘A’ : NEW DELHI
Before: SHRI KULDIP SINGH & SHRI PRASHANT MAHARISHI
ASSESSEE BY : S/Shri Neeraj Jain & P.K. Mishra, CAs REVENUE BY : Shri S.K. Jain, Senior DR Date of Hearing : 09.01.2017 Date of Order : 16.01.2017
O R D E R PER KULDIP SINGH, JUDICIAL MEMBER :
The Appellant, Income-tax Officer, Ward 25 (1), New Delhi (hereinafter referred to as ‘the Revenue’) by filing the present appeal sought to set aside the impugned order dated 28.01.2014, passed by the Commissioner of Income-tax (Appeals)-XXIV, New Delhi under section 143(3)/147 of the Income-tax Act, 1961 (for short ‘the Act’) qua the assessment year 2005-06 on the grounds inter alia that :-
“On the facts and circumstances of the case and in law CIT (A) has erred in –
Restricting the addition of Rs.1,26,60,000/- to Rs.7,75,816/- made by AO on account of non- genuine purchase.
The appellant craves the right to add, alter or amend any ground of appeal.”
2. Briefly stated facts of this case are : the assessee is into manufacturing and trading of stainless steel utensils, circle, patta, scrap etc. and has filed return by declaring total income of Rs.2,14,140/- for Assessment Year 2005-06. Subsequently, by issuing a notice u/s 148 of the Act on 28.03.2012, the AO reopened the case. AO made an addition of Rs.1,26,60,000/- as undisclosed income of the assessee on the ground that the assessee has failed to produce documentary evidence in support of its claim of purchase of S.S. Utensils alleged to have been purchased from Vee Kay International and Navneet Kumar Jain & Sons and completed the assessment u/s 147/143(3) of the Act at Rs.1,28,74,140/-.
3. Assessee carried the matter before the ld. CIT (A) by way of filing the appeal who has partly allowed the assessee’s appeal by restricting the addition on account of non-genuine purchases of Rs.7,75,816/- as against Rs.1,26,60,000/- made by the AO. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal.
We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case.
At the very outset, it is brought to our notice by ld. DR for the Revenue that the ld. CIT (A) has entertained numerous documents filed by the assessee during appellate proceedings, mentioned in para 5.3 of the impugned order, without providing an opportunity of being heard to the AO and proceeded to restrict the addition on the basis of guesswork and surmises.
Undisputedly, the CIT (A) have entertained copies of sales- tax assessment order for the period relevant to AY 2005-06, copies of purchase bills and copies of sales bills along with supporting documents evidencing the movement of goods and has also entertained copies of bills, GIR by the transporters and other statutory forms to prove the movement of goods inter-state and overseas, but has not preferred to get all these documents verified or by calling upon a remand report from the AO. Not only this, in para 5.3 at page 10 of the impugned order, ld. CIT (A) has himself recorded that, “the appellant has made total purchase of Rs.6,43,35,241/- out of which purchases to the tune of Rs.4,30,75,433/- are from alleged entry operators out of which Rs.1,26,60,000/- have been treated to be non-genuine, then remaining purchases of Rs.3,04,15,433/- were also not free from doubt and the same should have been held to be non-genuine which he has not done so. Hence, the action of AO is contradictory on the facts and in the circumstances of the case.”
7. When ld. CIT (A) himself was not satisfied with the findings of the AO qua the entire purchases of Rs.4,30,75,433/- (out of which AO treated the purchases to the tune of Rs.1,26,60,000/- as non-genuine) then how he has proceeded to restrict the addition to Rs.7,75,816/-. Ld. CIT (A) was required to get the entire purchases made by the assessee to the tune of Rs.4,30,75,433/- verified by providing an opportunity of being heard to the AO and not to proceed on the basis of guesswork in order to restrict the addition to Rs.7,75,816/- as against Rs.1,26,60,000/- made by the AO. In these circumstances, the impugned order is not sustainable in the eyes of law and the matter is required to be restored to ld. CIT (A) to decide afresh after providing an opportunity of being heard to the parties.
In view of what has been discussed above, present appeal filed by the revenue is allowed for statistical purposes and the file is restored to the file of ld. CIT (A) in the light of the observations made herein before.
Order pronounced in open court on this16th day of January, 2017.