TaxTMI 
TaxTMI 
2020 (10) TMI 791
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....ssment simply on the basis of satisfaction recorded by some other authority (i.e. third party) like Sale Tax, Mumbai but did not record his own satisfaction, reopening of the assessment has been held bad. 2. That the Deputy Commissioner Of Income Tax is also not justified by disallowing Rs. 46,52359/- on account of packing materials on the ground that the claim of purchase of packing materials amounting to Rs. 46,52, 359/- from the two parties are bogus. Against the order we preferred an appeal before the CIT Appeal-16 Kolkata. The CIT (Appeal) dismissed the appeal and confirmed the Assessing Officer Order on the ground that the Assessing Officer has clearly made out the case of bogus purchases on the basis of the report from Sale Tax Department and the Assessing Officer made detailed enquiry also and the parties were non-existent. The CIT(A) before passing the order ignored all the related documents, details submission, records and without ascertaining the facts just confirmed the Assessing Officer order and dismissed the appeal. 3. That any other grounds of appeal may kindly be allowed at the time of hearing. 3. The grounds raised in ITA No. 2033/Kol/2017 (AY....
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....ed the AO order on the basis of the predecessor order and dismissed the appeal. 2. That any other grounds of appeal may kindly be allowed at the time of hearing. 5. The brief facts relating to the issue as stated by the AO in his assessment order dated 29.02.2016 at page no. 1 & 2 are reproduced as under:- "The return was filed by the Assessee electronically on 30.9.2009 showing total income of Rs. 6,89,06,990/-. The return was processed by CPC, Bangalore under section 143(1) on 22.02.2011, resulting in a demand of Rs. 92,26,310/-. Thereafter the same was rectified by CPC, Bangalore on 31.01.2013 thereby reducing the previous demand to Rs. 12,54,040/-. The case was reopened under section 147 of the IT Act, 1961 on the basis of information received from DGIT(lnv.), Mumbai that during operation conducted by the Sales Tax Department, Mumbai, against certain entry operators, it was found that M/s Amit Trading Co. and M/s. D. D. Corporation were engaged in providing bogus entries. The list of beneficiary Companies has been forwarded and it is found that Bhotika Trade & Services Pvt. Ltd., the assessee company, is one of the beneficiary companies and had obt....
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....dated 31.07.2017 of the Ld. CIT(A)-16, Kolkata, assessee is in appeal before the Tribunal. 6. At the time of hearing, Ld. Counsel for the assessee reiterated the contentions raised by the Assessee in the written submissions and requested that the reopening of the assessment may be quashed. He further submitted that assessee has filed all the documentary evidences supporting the claim of the assessee and AO has not made any enquiry to falsify the evidences filed by the assessee. Therefore, assessee has discharged his onus as required under the law, therefore, the addition in dispute may be deleted. In support of his arguments, he filed the written submissions in the shape of synopsis which are reproduced as under:- "No Enquiry by the Assessing officer (AO) 1. It is a settled law that if the assessee has produced material evidences, it was upto the AO to make proper enquiry, and if the AO fails to make any effort in this direction, no addition could be made on this ground. 2. In this regard reliance is placed on the judgement of CIT vs Fair Finvest Ltd ITA no. 232/2012 dated 22-11-2012, wherein Hon'ble Delhi High Court has held that where AO doesn't carr....
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....tal added under section 68, the ra:; Lovely Exports (supra) is attracted, irrespective of the facts, evidence and material. substantial question of law arises. The appeal is accordingly dismissed. " 3. Similar view was taken by the jurisdictional High Court in the case of i. CIT vs Goel Sons Goiden Estate P Ltd. ITA no. 212/2012 dated 11-4-2012. ii. CIT vs Gangeshwari Metal Pvt Ltd ITA No. 597/2012 dated 21.1.2013. 4. Relying on the judgement of Delhi High Court, the Delhi bench of the Tribunal in the case of ACIT vs. Panchanan International P. Ltd ITA No. 50/D/2011 dated 23-11-2012 at Page no. 5 Para 8 & 9 held as under: "8. We have heard the rival submissions of both the parties and have gone through the material available on record. We find that the assessee had accepted share application money of '. 10,00,000/- through banking channel and had filed details/documents regarding the above said companies. The Assessing Officer without going into the documents and without conducting any enquiry rejected the details and made the addition. The Ld CIT(A) after going through the submissions made by the Ld AR had rightly deleted the additi....
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.... "14. We have considered the rival submission and perused the entire material available on record. The AO had made addition of Rs. 80 lacs out of the total share application money amounting to Rs. 2,40,00,000/-. Thus, rest of the amount had been accepted by AO. From the assessment order it is evident that AO has merely relied on general information regarding the impugned 4 companies in respect of which addition was made as they were known entry providers. The AO has pointed out that details were provided by these companies but since the directors of these companies were not produced, he made the addition. No inquiries were conducted by AO to find out the genuineness of the transactions and creditworthiness of the companies who had applied for the share application money in ihe assessee company. We find considerable merit in the argument of Id. counsel for the assessee that merely because the directors were not produced the addition could not be made in view of the decision of Hon'ble Delhi High Court in the case of Victor Electrodes Ltd. (supra) and also in the case of Nova Promoters (supra) also Hon'ble Delhi High Court had clearly distinguished between the cases where AO h....
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....ic- CIT(A)] as well as with the learned Authorised Representative, because no such addition can be made in the hands of the assessee on the basis of observations made by a third party. In this case, the addition rests mainly only on the observations of the Sales-tax Department. The assessee was never associated with the enquiries made by the Sales-tax Department to that extent. The satisfaction of the AO himself is of the prime importance while making assessment of an income and these duties cannot be performed by substituting the satisfaction of someone else. The assessee did pay for the purchases he made from the above two parties through cheque as is evident from the above chart. The statements or even the affidavits of the sellers named abovecannot be utilized against the assessee in view of the decision of the Hon'ble Supreme Court given in the case of Kish an Chand Chella Ram vs. CIT (1980) 19 CTR (SC) 360 : (1980) 125 ITR 713 (SC). Their Lordships of the Hon'ble Supreme Court in the above case (and in so many other cases) has given a ruling that a statement made by a third party cannot be relied in the case of the assessee unless an opportunity is given to him to con....
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....missioner (Appeals) in his detailed independent Judgment while deleting additions made by the Assessing Officer, made following observations: "5.5 I have carefully considered the observations of the A.O. in assessment order as well as in remand report; the submissions of the appellant along with cross-objection against the remand report and the case iaws referred to and relied upon by the appellant. The only issue in all the grounds of appeal is the disallowance of purchase amounting to 1,63,15,869/u/ s. 69C of the income Tax Act, 1961 as unexplained expenditure. That the appellant has furnished the copy of Tax Invoice prepared under MVAT Act, 2002 with full details and signature. When the sale is made by the person registered under MVAT Act, 2002 then he is duty bound to issue his tax invoice w'th date, Name and Address of Purchase party, particulars of goods, calculation of MVAT with rate as applicable declaration under MVAT Act, 2002 and accordingly the three invoice produced by the appellant from the supplier M/s. Shree Enterprise reflects Date, Name of the Purchaser with Address, TIN Number, PAN and declaration under MVAT Aci, 2002, the said Tax Invoices ....
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....e case of INCOME TAX OFFICER vs. PERMANAND (2007) 107 TTJ (Jd)395 it was held that, "AO could not make addition in the hands of the assessee merely on the basis of observations made by the Sales-tax Department that the purchases made by the assessee from certain parties were bogus, without conducting independent enquiries ITO v. Vinod Chand, Prop. Vinod Brothers (ITA No.623/Jd/2005, dt. 17th Dec. 2005) followed; Kishan Chand Chella Ram vs. CIT(1980) 19 CTR (SC) 360: (1980) 125 ITR 713 (SC) applied."" 5. It can, thus, be seen that the Commissioner (Appeals) and the Tribunal concurrently came to the factual finding that the Department has no independent material to come to the conclusion that the purchases made by the assessee of gold and silver were either non genuine or that the same were made out of assessee'sknown source. As noted by the Commissioner (Appeals), the purchases were made through banking channel The Assessing Officer had not rejected the books of accounts of the assessee. 6. Being a pure question of fact, no question of law arises. The learned counsel for the Revenue, however, attempted strenuously to contend that the findings are perverse relying o....
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.... assessee, copy of purchase bills, copy of assessee's bank statement showing the payment; copy of letter issued by the AO dated 21.5.2014; copy of statement recorded in the case of M/s DD Corporation; copy of rely submitted before the AO dated 27.7.2015 alongwith enclosures i.e. copy of confirmation of accounts by Amit Trading Company, copy of confirmation of accounts by DD Corporation and copy of written submissions filed before CIT(A) dated 28.3.2017. No doubt that Ld. Counsel for the assessee has raised the legal ground challenging the reopening of the assessment on the basis of satisfaction recorded by some other authorities i.e. 3rd party (Sales Tax Department). As per the arguments advanced by the Ld. Counsel for the assessee that AO has reopened the assessment on the basis of the specific information and made assessment u/s. 143(1) of the Act. We have gone through the orders passed by the revenue authorities as well as arguments advanced by both the parties and also perused the judgement passed by the Hon'ble Supreme Court of India in the case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. dated 23.05.2007 in Appeal (Civil) No. 2830 of 2007 (Supra), the relevant paras of....
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....me Court of India in the case of ACIT vs. Rajesh Jhaveri Stock Brokers Pvt. Ltd. dated 23.05.2007 in Appeal (Civil) No. 2830 of 2007 (Supra), we are of the view that the reopening of the assessment on the basis of the specific information is legally valid. Hence, respectfully following the aforesaid judgment of the Hon'ble Supreme Court of India in the case of ACIT vs. Rajesh Jhaveri (Supra), the legal issue raised by the assessee in ground no. 1 in assessment year 2009-10 & 2010- 11 is dismissed. 9. As regards the merits of the case, after hearing both the parties and perusing the documentary evidences filed by the assessee alongwith written submissions as well as the case laws relied upon by both the parties, we are of the considered view that the Assessee has filed all the documentary evidences for the purchase of packaging material amounting to Rs. 46,52,359/- from two parties namely (i) M/s DD Corporation and (ii) M/s Amit Trading Co. The assessee has also filed the copy of the purchase bill with challan of both the parties, party confirmation, registration certificate and statement of payment with bank statement which the assessee has already submitted before the AO as wel....