DY. C.I.T. CIR-.1, NAGPUR vs. SHRI HEMRAJ PUNEKAR,

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ITA 515/NAG/2016Status: DisposedITAT Nagpur10 January 2017AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found the CIT(Appeals)'s observation contradictory, as the assessee had not provided details to the AO. The Tribunal held that the matter should be remitted to the AO for examination of the submissions made before the CIT(Appeals) and to provide the assessee an opportunity to be heard.

What were the facts?

The Revenue appealed the deletion of an addition for bogus purchases made by the assessee. The Assessing Officer (AO) made the addition as the assessee did not respond to notices regarding purchases from two parties who denied making sales. The CIT(Appeals) deleted the addition, stating the assessee provided details and the AO did not examine them.

What were the issues?

Whether the CIT(Appeals) was justified in deleting the addition for bogus purchases without proper examination by the AO, and if the assessee's non-response to the AO warranted a remand.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

1 ITA No. 515/Nag/2016.

IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. (S.M.C.) I.T.A. No. 515/Nag/2016 Assessment Year : 2009-10. Dy. Commissioner of Income-tax, Shri Hemraj Punekar, Circle-1,Nagpur. Vs. Nagpur. PAN AHYPP 2118H. Appellant. Respondent. Appellant by : Shri A.R. Ninawe. Respondent by : Shri Mahavir Atal. Date of Hearing : 20-12-2016 Date of Pronouncement : 10th January, 2017.

O R D E R. This appeal by the Revenue is directed against order of Learned CIT(Appeals)-I, Nagpur dated 14/07/2016 and pertains to assessment year 2009-10. The ground of appeal reads as under :

“ On the facts and circumstances of the case, the Ld. CIT(Appeals) has erred in deleting the addition of Rs.35,48,955/- on account of bogus purchases from M/s P.M. Trading Co. and M/s Reliance Metal allow.” 2. In this case the assessment was reopened on information received from the Sales Tax Department that the purchases shown by the assessee from two parties namely. M/s. P.M. Trading Co. amounting to Rs.30,63,270 and M/s Reliance Metal Alloy amounting to Rs.4,85,685/- during F.Y. 2008-09 in his books were bogus. These parties had denied making any sales to the assessee. In the course of assessment Assessing Officer gave notice to the assessee asking for the necessary details including a copy of bills etc. of these parties for

2 ITA No. 515/Nag/2016.

transportation and the necessary receipt. However despite repeated reminders there was no response from the assessee. Hence Assessing Officer made the impugned addition concluding as under :

“ The assessee did not submit his say on the query, more over no transportation details and details of octroi paid have been filed by the assessee. The suppliers have, before the Sales Tax Authorities, confessed that they have not sold any material to the assessee and only bills were issued and there was no delivery of goods. In view of these facts and the non submission of reply by the assessee to the show cause notice dated 24.12.2014, it is held that the assessee had not actually purchased these goods and same were just the books entries. This amount of Rs.35,48,955/- is disallowed and added to the total income of the assessee. Penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 are initiated separately for furnishing inaccurate particulars of income.” 3. Upon assessee's appeal Learned CIT(Appeals) deleted the addition by holding that copies of denials of the parties were not given to the assessee and that assessee has given all the necessary details and the Assessing Officer had not examined them. Hence learned CIT(Appeals) deleted the addition.

4.

Against above order Revenue is in appeal before the ITAT 5. I have heard both the counsel and perused the records. I find that assessee has not given any details whatsoever regarding the enquiry during assessment proceedings despite notice from the Assessing Officer. However Learned CIT(Appeals) has given a finding that all the details were given before the Assessing Officer, but the Assessing Officer has not examined the same. I find that this is a very contradictory observation. How after being detected by the Sales Tax Department for bogus purchases, assessee can be granted relief if he fails to respond to AO. Notice in this regard is beyond comprehension. When the assessee had not provided the necessary details before the Assessing Officer it was incumbent upon the Learned CIT(Appeals) to remand the matter before the Assessing Officer.

3 ITA No. 515/Nag/2016.

6.

Accordingly in the interest of justice in my considered opinion the matter needs to be remitted to the file of the Assessing Officer. Assessing officer is directed to examine the veracity of the submissions made before the Learned CIT(Appeals). Needless to add assessee should be granted adequate opportunity of being heard.

7.

In the result this appeal by the Revenue stands allowed for statistical purposes

Order pronounced in the Open Court on this 10th day of January., 2017.

Sd/- ( SHAMIM YAHYA) ACCOUNTANT MEMBER.

Nagpur, Dated: 10th January, 2017.

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