Income Tax Appellate Tribunal - Indore
M/S Shree Balaji Landmark Hotels Pvt. ... vs The Acit 3(1), Indore on 8 June, 2018
Shri Balaji Landmark
ITA No. 865/Ind/2016
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
Before Shri Kul Bharat, Hon'ble Judicial Member and
Shri Manish Borad, Hon'ble Accountant Member
ITA No. 865/Ind/2016
A.Y. 2011-12
M/s Shree Balaji Landmark Hotel
Private Limited
Indore ::: Appellant
Vs
ACIT 3(1)
Indore ::: Respondent
Appellant by Shri Pankaj Shah
Respondent by Shri K.G. Goyal
Date of hearing 4.6.2018
Date of pronouncement 8.6.2018
O R D E R
PER SHRI MANISH BORAD, AM
This appeal filed by the assessee pertaining to Assessment Year 2011-12 is directed against the order of ld. Commissioner of Income-tax (Appeals)-2, Indore dated 30.06.2016 which is arising out of the order u/s 143(3) of the Income Tax Act dated 27.03.2014 framed by the JCIT, Range 3, Indore.
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2. Briefly stated, the facts, as culled out from record, are that the assessee declared total income of Rs.2,50,50,083/- and the return of income filed for the assessment year 2011-12 on 30.9.201. The assessment u/s 143(3) of the Act was completed after making few additions totaling Rs. 3,55,150/- which, inter alia, included addition towards bogus purchases of Rs. 2,55,150/- from a concern M/s Omkar Enterprises, Mumbai. The Assessing Officer investigated the issue of bogus purchases on the basis of information received from DGIT (Inv.), Mumbai. During the course of assessment proceedings the assessee furnished details of purchases from the said party at Rs.1,27,575/-. However, the Assessing Officer on the basis of information made an addition for bogus purchases of Rs. 2,55,150/-. The assessee did not file any appeal against these additions of Rs. 3,55,150/- before the learned Commissioner of Income Tax (Appeals).
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3. Subsequently, penalty proceedings were initiated and the Assessing Officer imposed penalty of Rs. 2 lacs on the alleged addition of bogus purchases of Rs. 2,55,150/-.
4. Aggrieved, the assessee preferred appeal before the learned Commissioner of Income Tax (Appeals) who restricted the penalty to 150% as against 250% levied by the Assessing Officer. Now the assessee is in appeal before the Tribunal against confirmation of penalty @ 150% of the alleged tax sought to be evaded.
5. The learned counsel for the assessee submitted that the assessee has duly disclosed the purchases of Rs.1,27,575/- made from Shri Omkar Enterprises but the Assessing Officer has made an addition of the double amount i.e. Rs. 2,55,150/- without giving any basis. He also contended that no opportunity of cross-examination was provided to the assessee. The learned counsel for the 3 Shri Balaji Landmark ITA No. 865/Ind/2016 assessee also submitted that mere non-filing of quantum appeal does not lead to presumption of concealment or furnishing of inaccurate particulars of income. Reliance was further placed on the following decisions :-
(i) Babulal C. Borana vs. ITO (2006) 282 ITR 251 (Bom)
(ii) ACIT vs. Kishan Lal Jewels Pvt. Ltd. (2012) 147 TTJ 308(Del) (Tri.)
(iii) Kishinchand Chellaram vs. CIT; 125 ITR 713
(iv) Manjunath Cotton & Ginning Factory 395 ITR 565)
6. On the other hand, the learned DR vehemently argued supporting the orders of the lower authorities.
7. We have heard both the parties and perused the material available on record as also the judgments relied upon by the learned counsel for the assessee.
8. The sole grievances relates to penalty imposed on the alleged bogus purchases of Rs. 2,55,150/-. From the perusal of record we find that the assessee declared 4 Shri Balaji Landmark ITA No. 865/Ind/2016 income of Rs. 2,50,50,083/- and is engaged in the business of running hotels. The books of accounts are audited and complete details including books of accounts, cash book, ledger, vouchers were produced before the learned Commissioner of Income Tax (Appeals). The books of accounts have not been rejected. The Assessing Officer on the basis of information from the office of DGIT(Inv.), Mumbai, called for the reply from the assessee about the purchases. The assessee duly furnished complete details of purchases of Rs.1,27,575/- made from M/s Omkar Enterprises which were duly recorded in the books and the payment was duly made. The learned Assessing Officer further made an inquiry from Sunil Gupta, proprietor of M/s Omkar Enterprises who in his statement recorded on oath stated that no such sales have been made to the assessee. We are unable to understand that at one point of time the revenue is alleging that the assessee has made 5 Shri Balaji Landmark ITA No. 865/Ind/2016 bogus purchases from M/s Omkar Enterprises and on the other M/s Omkar Enterprises refused to have made any sale to the assessee and thirdly the assessee has furnished details of purchases of Rs. 1,27,575/- from the very same party. There are three different versions of the same transaction except the amount of purchase which the Assessing Officer has taken at double the amount shown by the assessee. This is also a fact that the assessee was not provided an opportunity of cross examination which has been requested by him during the course of penalty proceedings. The Assessing Officer has also not provided copy of report of DGIT, Mumbai, to the assessee nor the copy of the statement was provided. We observe that in the case of C. Vasantlal & Co.; 45 ITR 2006 the Supreme Court has held that "it is open to the ITO to collect material to facilitate assessment even by private enquiry but he if he desires to use the material so collected, the assessee must 6 Shri Balaji Landmark ITA No. 865/Ind/2016 be informed of the material and must be given an adequate opportunity of explaining it". Similar view has been taken in the case Kishanchand Chellaram (supra), New Kashmir & Oriental Transport Co. (P) Ltd.; 92 ITR 334(All) and CIT vs. Permanand; 107 TTJ 395 (Jd)(Tri). We, therefore, respectfully following the judgment of the Hon'ble Supreme Court as well as in the facts and circumstances of the case wherein the assessee has duly furnished details of purchases made in its books of accounts, the books of accounts have not been rejected, the assessee has not been provided opportunity of cross examination of the alleged seller M/s Omkar Enterprises, are of the view that both the lower authorities were not justified in confirming the penalty u/s 271(1)(c) of the Act on the alleged bogus purchases. We accordingly delete the penalty imposed on the alleged bogus purchases of Rs. 2,55,150/- and allow the appeal of the assessee.
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9. In the result, the appeal of the assessee is allowed.
Order pronounced in open Court on 8th June, 2018.
Sd/- sd/-
(KUL BHARAT) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
June 8, 2018
Copy to : Appellant/Respondent/CIT/CIT(A)/DR Dn/-
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