2017 (4) TMI 1593 - AT - Income Tax

Assessment u/s 153A - Bogus purchases - 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 - HELD THAT - 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 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. Appeals of the revenue and the assessee are treated as allowed for statistical purposes.

Summary

Issues involved:
Appeals filed by revenue and assessee against common order dated 29-12-2011 by Ld CIT(A)-41, Mumbai regarding addition made on account of bogus purchases.

Detailed Analysis:

1. Non-Appearance of Assessee:
The assessee did not appear despite multiple notices sent by registered post, returned by postal department. The revenue was directed to serve notice to the assessee, which was done through affixture. As the appeals were filed in 2012, the Tribunal proceeded ex-parte without the presence of the assessee.

2. Bogus Purchases and Search Action:
Issues contested by both parties related to addition made on account of bogus purchases. The assessee's group was subjected to search action in connection with brokers who admitted providing bogus accommodation bills. Sworn statements by key individuals admitted additional income towards bogus purchase bills, leading to reopening of assessments under section 153A of the Act.

3. Decisions by Ld CIT(A):
In the appellate proceedings, Ld CIT(A) deleted additions related to purchases made through certain brokers, citing reasons such as no fault found by assessing officers of the brokers and previous deletions by the Tribunal. However, disallowance of purchases made from other parties in specific assessment years was confirmed. This led to appeals by both the revenue and the assessee.

4. Arguments by Ld D.R:
The Ld D.R argued that the orders in the hands of certain brokers were revised, and additions were made on a protective basis. It was contended that relief granted by Ld CIT(A) should not stand as the issues were not final in the brokers' hands. Additionally, the disallowance of purchases was justified as the genuineness was not proven by the assessee.

5. Tribunal's Decision:
After hearing the submissions, the Tribunal decided that all additions made by the AO needed re-examination in light of subsequent developments in the assessments of the brokers and other parties. Consequently, the common order passed by Ld CIT(A) was set aside, and all matters were restored to be considered afresh, taking into account relevant facts and developments.

6. Outcome:
As a result, all appeals by the revenue and the assessee were treated as allowed for statistical purposes, and the matters were remanded back to Ld CIT(A) for fresh consideration based on subsequent developments.

This detailed analysis of the judgment highlights the key issues, decisions, arguments, and the Tribunal's final decision, providing a comprehensive overview of the legal proceedings and outcomes.