Income Tax Appellate Tribunal - Delhi
Sh. Sandeep Aggarwal,, Delhi vs Dcit, New Delhi on 9 January, 2019
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IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI 'B' BENCH,
NEW DELHI
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND
MS. SUCHITRA KAMBLE, JUDICIAL MEMBER
ITA No. 2272/DEL/2015
[A.Y 2007-08]
The Dy. C.I.T Vs. Shri Sandeep Aggarwal
Central Circle -19 34, Shanti Vihar
New Delhi Delhi
PAN : AAJPK 8226 B
CO No. 319/DEL/2015
[A/o ITA No. 2272/DEL/2015
[A.Y 2007-08]]
Shri Sandeep Aggarwal Vs. The Dy. C.I.T
34, Shanti Vihar Central Circle -19
Delhi New Delhi
PAN : AAJPK 8226 B
[Appellant] [Respondent]
Date of Hearing : 07.01.2019
Date of Pronouncement : 09.01.2019
Assessee by : None
Revenue by : Ms. Nidhi Srivastava, CIT- DR
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ORDER
PER N.K. BILLAIYA, ACCOUNTANT MEMBER,
This appeal by the Revenue and cross objection by the assessee are preferred against the order of the CIT(A)- 25, New Delhi dated 04.02.2015 pertaining to A.Y 2007-08.
2. None appeared on behalf of the assessee, though on 05.11.2018, the counsel was aware of the date of hearing. We decide to proceed ex parte. We heard the ld. DR at length and have carefully perused the orders of the authorities below.
3. The solitary grievance raised by the Revenue is that the CIT(A) erred in restricting the addition to Rs. 5,92,279/- from total addition of Rs. 1,62,26,036/-.
3. Briefly stated, the facts of the case are that a search and seizure operation was conducted by the INV Wing on 26.04.2010 in M/s Pilot Group of cases. The assessee's premises were also covered u/s 132(1) 3 of the Income-tax Act, 1961 [hereinafter referred to as 'the Act']. During the course of search and seizure operation in the case of Shri Rakesh Gutpa, Shri Vishesh Gupta, Shri Vaibhav Jain and Shri Navneet Jain, it was found that these persons are engaged in the business of providing accommodation entries through bogus purchase bills from the firms owned and controlled by them.
4. In their respective submissions, these persons gave names of the firms which were engaged in providing accommodation bills in respect of bogus purchases.
5. The Assessing Officer found that the assessee had made purchases of Rs. 1,62,26,036/- from Shree Goverdhan International which was engaged in providing accommodation bills in respect of bogus purchases. Taking a leaf out of the statement recorded during the course of search and seizure operation, the Assessing Officer came to the conclusion that the purchases of Rs. 1,62,26,036/- are bogus and, accordingly, made addition of the same.
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6. The assessee carried the matter before the CIT(A) and vehemently stated that the copies of statements from which the Assessing Officer drew conclusion were never supplied to the assessee nor any opportunity of cross examination was given. It was pointed out to the CIT(A) that the assessee has submitted complete quantitative details of opening stock, purchases, sales and closing stock. It was brought to the notice of the CIT(A) that the books of account of the assessee have been audited and the same has not been rejected by the Assessing Officer.
7. After considering the facts and submissions and factual details brought on record and drawing support from various judicial decisions, the CIT(A) was of the opinion that the Assessing Officer was not justified in disallowing the purchases of Rs. 1,62,26,036/-. The CIT(A) was of the firm belief that the profit @ 5% on the alleged bogus purchase would meet the ends of justice and accordingly, directed the Assessing Officer to restrict the addition to Rs. 5,92,279/-. 5
8. Aggrieved by this, the Revenue is before us. The ld. DR strongly supported the findings of the Assessing Officer and read the relevant observations of the Assessing Officer.
9. The details of purchases and their corresponding sales can be understood from the following chart:
Date Particulars Item unit
Purchase Sale
Quantity Quantity Amount
Amount (excl (excl Tax)
Tax)
3/22/2007 Lead Kg's 20,023.40 1,471,720
Shree Goverdhan
International
3/22/2007 Lead Kg's 20,131.70 1,479,680
Shree Goverdhan
International
3/22/2007 Lead Kg's 20,077.80 1,475,674
Shree Goverdhan
International
Pilot Industries
3/22/2007 Ltd Lead Kg's 20,023.40 1,475,725
Pilot Industries
3/22/2007 Ltd Lead Kg's 20,131.70 1,483,706
Pilot Industries
3/22/2007 Ltd Lead Kg's 20,077.80 1,479,734
Lead Kg's 20,026.25 1,471,929
3/23/2007 Shree Goverdhan
International
Lead Kg's 20,073.55 1,475,406
3/23/2007 Shree Goverdhan
International
Lead Kg's 20,093.20 1,476,850
3/23/2007
Shree Goverdhan
International
Lead Kg's 20,054.85 1,474,031
3/23/2007 Shree Goverdhan
International
Pilot Industries
3/23/2007 Ltd Lead Kg's 20,026.25 1.475,935
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1.479,421
3/23/2007 Pilot
Ltd
Industries Lead Kg's 20.073.55
3/23/2007 Pilot Industries Ltd Lead Kg's 20,093.20 1,480,869
3/23/2007 Pilot Industries Ltd Lead Kg's 20,054.85 1,478,042
3/24/2007 Lead Kg's 20,063.70 1,474,682
Shree Goverdhan
International
3/24/2007 Lead Kg's 20,033.65 1,472,473
Shree Goverdhan
International
3/24/2007 Lead Kg's 20,086.70 1,476,372
Shree Goverdhan
International
3/24/2007 Lead Kg's 20,098.20 1,477,218
Shree Goverdhan
International
3/24/2007 Pilot Industries Ltd Lead Kg's 20,063.70 1,478,695
3/24/2007 Pilot Industries Ltd Lead Kg's 20.033.65 1,476,480
3/24/2007 Pilot Industries Ltd Lead Kg's 20,086.70 1,480,390
3/24/2007 Pilot Industries Ltd Lead Kg's 17,760.65 1,481,237
3/24/2007 Pilot Industries Ltd Lead Kg's 861.36 66,324
Total 220,763.00 16,226,035 219286.81 16,336,558
10. The undisputed fact is that sales of Rs. 1,63,36,558/- was accepted by the Assessing Officer. Assuming, yet not accepting, the purchases of Rs. 1,62,26,035/- are bogus purchases, then we fail to 7 understand how the assessee has booked sales of Rs. 1,63,36,558/- since no adverse inference has been drawn by the Assessing Officer in so far as sales are concerned.
11. There are definitely movement of goods and, therefore, in our considered opinion, entire purchases cannot be treated as income of the assessee. Profit of 5% taken by the CIT(A) in this line of trade should meet the ends of justice. The CIT(A) has rightly restricted the addition to Rs. 5,92,279/- and, therefore, no interference is called for.
12. In the result, the appeal of the Revenue in ITA No. 2272/DEL/2015 as well as the cross objection of the assessee in CO No. 319/DEL/2015 are dismissed.
The order is pronounced in the open court on 09.01.2019.
Sd/- Sd/-
[SUCHITRA KAMBLE] [N.K. BILLAIYA]
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated: 09th January, 2019
VL/
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Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar,
ITAT, New Delhi
Date of dictation
Date on which the typed draft is placed before the dictating Member Date on which the typed draft is placed before the Other Member Date on which the approved draft comes to the Sr.PS/PS Date on which the fair order is placed before the Dictating Member for pronouncement Date on which the fair order comes back to the Sr.PS/PS Date on which the final order is uploaded on the website of ITAT Date on which the file goes to the Bench Clerk Date on which the file goes to the Head Clerk The date on which the file goes to the Assistant Registrar for signature on the order Date of dispatch of the Order