2013 (11) TMI 1051 - HC - Income Tax

Bogus purchases/sales - Held that - The assessee relied upon the decision in Commissioner of Income Tax vs. President Industries 1999 (4) TMI 8 - GUJARAT High Court - The tribunal has failed to consider and/or deal with the decision cited and relied upon by the assessee - All these appeals are required to be remanded to the tribunal to consider the addition made by the Assessing Officer towards alleged bogus purchases/sales and to take appropriate decision in accordance with law and on merits - The issue was restored for fresh decision.

Summary

Issues involved:
1. Whether the Tribunal was correct in confirming addition towards alleged bogus purchases/sales.
2. Whether the Tribunal erred in not referring the matter to Full Bench/Special Bench for deciding the disputed issue.
3. Whether the Tribunal's conclusion for confirming the addition towards purchases and sales was based on relevant material.

Detailed analysis:
Issue 1: The appellant challenged the Tribunal's decision confirming additions towards alleged bogus purchases/sales. The appellant relied on a specific court decision, which the Tribunal did not consider. Both advocates acknowledged this oversight. The High Court emphasized that when a decision is cited, the tribunal must address it. As the Tribunal failed to consider the cited decision, the appeals were remanded to the Tribunal to reevaluate the addition made by the Assessing Officer and consider the court decision cited by the appellant.

Issue 2: The appellant argued that the Tribunal should have referred the matter to a Full Bench/Special Bench for deciding the disputed issue. However, the High Court did not address this specific argument in its judgment. The focus was primarily on the Tribunal's failure to consider the cited court decision. Therefore, the issue of not referring the matter to a Full Bench/Special Bench was not directly dealt with in this judgment.

Issue 3: The High Court reiterated that when a party cites a specific court decision, the tribunal must consider it and determine its applicability to the case at hand. The Court emphasized that the Tribunal's failure to address the cited decision was a crucial oversight. The High Court remanded the appeals to the Tribunal to reconsider the addition towards alleged bogus purchases/sales in light of the cited court decision. The Court clarified that it did not express an opinion on the applicability of the cited decision, leaving it to the Tribunal to decide based on the case's circumstances.

In conclusion, the High Court allowed the appeals in part, remanding them to the Tribunal to reconsider the addition towards alleged bogus purchases/sales and consider the cited court decision. The judgment highlighted the importance of tribunals addressing cited court decisions and making decisions based on relevant legal principles.