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Income Tax Appellate Tribunal, “F” Bench, Mumbai
O R D E R PER BENCH: The revenue has filed appeals for assessment years 2004-05 to 2010-11 and the assessee has filed appeals for assessment years 2008-09 to 2010-11. All these appeals are directed against the common order dated 29-12-2011 passed by Ld CIT(A)-41, Mumbai.
None appeared on behalf of the assessee, even though the notices were sent by registered post on more than one occasion. We also notice that the letters have been returned back by the postal department. Hence the bench has directed the revenue to serve the notice to the assessee. The Ld D.R has informed that the notices have been served upon by the assessee by way of affixture. Since the appeals have been filed way back in 2012, we proceed to dispose of the appeals ex-parte, without the presence of the assessee.
We have heard Ld D.R and perused the record. The issues contested by both the parties relate to addition made on account of bogus purchases. The assessee’s group was subjected to search action on 23.07.2009. The search was consequent to the survey/search operations conducted in the hands of brokers named Shri Atul Sanghavi and Dilip Shah on 05-02-2007. These brokers appear to have admitted that they have been providing bogus accommodation bills. During the course of search action in the hands of the assessee, sworn statements were taken from Shri Kiran N Mehta, CMD and Shri Kailash Agarwal, Joint MD. In the sworn statement, they admitted additional income of about 72.16 crores towards bogus purchase bills. Accordingly the assessments under consideration were reopened u/s 153A of the Act and the additions were made in AY 2004-05 to 2009-10 in respect of purchases made through Shri Atul
3 M/s. Varun Industries Ltd.
Sanghavi and Shri Dilip Shah. In assessment years 2008-09 to 2010-11, the purchases made from some other persons were also disallowed by the AO.
In the appellate proceedings, the Ld CIT(A) deleted the additions relating to the purchases made through Shri Atul Sanghavi and Shri Dilip Shah in AYs 2004- 05 to 2010-11 on the reasoning that (a) the assessing officer of the above said brokers had examined the transactions in their respective hands and did not find any fault therein.
(b) The purchases made in AY 2004-05 and 2005-06 were already under scrutiny by the AO in an earlier proceeding and the said additions have been deleted by the Tribunal.
Aggrieved by the orders passed by the Ld CIT(A) granting relief to the assessee, the revenue has filed these appeals before us. The Ld CIT(A), however, confirmed the disallowance of purchases made from some other parties in AY 2008-09 to 2010-11. Aggrieved, the assessee has filed these three appeals before us.
The Ld D.R submitted that the orders passed by the AO in the hands of Shri Atul Sanghavi and Shri Dilip Shah has been revised by the Ld CIT and the additions have been made in their hands on protective basis. Accordingly she submitted that the Ld CIT(A) should not have granted relief to the assessee on the basis of orders passed in the hands of the above said brokers, since the issues have not become final in their hands. In respect of additions confirmed by the Ld CIT(A), the Ld D.R submitted that the Ld CIT(A) has rightly confirmed the addition, since the assessee has failed to prove the genuineness.
Having heard rival submissions, we are of the view that all the additions made by the AO require re-examination at the end of Ld CIT(A) in the light of subsequent developments that happened in the assessments of two brokers and 4 M/s. Varun Industries Ltd.
the other parties. Accordingly we set aside the common order passed by Ld CIT(A) and restore all the matters to his file for considering them afresh by duly considering the relevant facts and subsequent developments.
In the result, all the appeals of the revenue and the assessee are treated as allowed for statistical purposes. Order has been pronounced in the Court on 24.4.2017.