Ravjibhai Becharbhai Dhameliya Vs ACIT (Gujarat High Court)
The Gujarat High Court heard appeals filed by the assessees under Section 260A of the Income-tax Act, 1961 challenging the Income Tax Appellate Tribunal’s order dated 06.01.2022 for Assessment Year 2013-14. The appeals questioned the Tribunal’s findings partly confirming additions relating to alleged bogus purchases, its conclusion that the purchases were bogus, enhancement of the addition to 6% of the disputed purchases from 5% sustained by the Commissioner of Income Tax (Appeals), and the Tribunal’s appreciation of the evidence on record.
At the outset, the Revenue submitted that Tax Appeal No. 109 of 2024 arising from the same Tribunal order had already been dismissed by the High Court on 27.02.2024. In that appeal, the Revenue had challenged the Tribunal’s decision restricting the addition from 100% of the alleged bogus purchases to 6% of such purchases. The Revenue submitted that the present appeals, arising from the same Tribunal order and involving the same issue, should also be dismissed. It relied on the High Court’s decision in Principal Commissioner of Income Tax vs. Pankaj K. Chaudhary.
The High Court examined its judgment dated 27.02.2024 in Tax Appeal No. 109 of 2024. It noted that, in that appeal, the Revenue had questioned the Tribunal’s restriction of the addition to 6% of the purchases instead of sustaining the Assessing Officer’s disallowance of 100% and had also challenged the Tribunal’s reliance on Mayank Diamonds Pvt. Ltd.
The Court observed that, after considering the decision in Principal Commissioner of Income Tax vs. Pankaj K. Chaudhary, it had already dismissed the Revenue’s appeal and confirmed the Tribunal’s decision restricting the addition to 6% of the purchases.
Since the present appeals were filed by the assessees against the very same Tribunal order and raised the same issue, the High Court held that the proposed questions of law already stood answered by its earlier decision in Tax Appeal No. 109 of 2024.
Accordingly, the High Court dismissed the assessees’ appeals in view of its earlier order.
Cases Discussed
- Principal Commissioner of Income Tax vs. Pankaj K. Chaudhary, Tax Appeal No.617 of 2022
- Mayank Diamonds Pvt. Ltd., (2014)(11) TMI 812
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. These appeals are filed by the appellants assesses under Section 260(A) of the Income Tax Act, 1961 (for short ‘the Act’), proposing the following substantial questions of law arising out of the judgment and order dated 06/01/2022 passed by the Income Tax Appellate Tribunal (for short ‘the Tribunal’) in ITA No.1525/AHD/2017 for the assessment year 2013-2014.
“(i) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in partly confirming the addition in respect of alleged bogus purchases based on material and statements which were admittedly not provided to the appellant for rebuttal and cross examination?
(ii) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding the impugned purchases as bogus purchases?
(iii) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in enhancing the addition on alleged bogus purchases to 6% of the amount of disputed purchases as against 5% confirmed by the Commissioner of Income Tax (Appeals) without giving any cogent reasons?
(iv) Whether, in the facts and circumstances of the case, the order passed by the Income Tax Appellate Tribunal was perverse in as much as the same has been passed without appreciating the facts of the case, documentary evidences forming part of record and the settled legal principles in the correct perspective?
2. At the outset, learned Senior Standing Counsel Mr.Karan Sanghani appearing for the respondent revenue submitted that the Tax Appeal No.109/2024 arising from the impugned order of the Tribunal filed by the appellant revenue therein is dismissed by this Court vide order dated 27/02/2024 wherein also the issue of addition of 100% of purchase was raised which was restricted by the Tribunal to 6% of the purchases made by the assesses. It was therefore submitted that both these appeals filed by the assesses from the same order which raised the same issue may also be dismissed as this Court has referred to and relied upon the decision in case of Principal Commissioner of Income Tax vs. Pankaj K. Chaudhary in Tax Appeal No.617 of 2022 decided on 07/03/2023.
3. We have perused the judgment and order dated 27/02/2024 in Tax Appeal No.109 of 2024 in case of the appellant therein rendered by this Court.
4. In the Tax Appeal No.109 of 2024, following substantial questions of law were proposed by the appellant revenue.
“(i) Whether, on the facts and in the circumstances of the case and in law, the learned Tribunal was justified in estimating the addition in respect of bogus purchases at the rate of 6% of such purchases as against disallowance made by the AO at the rate of 100% of such purchases amounting to Rs.7,80,47,828/- ignoring that these purchases are sham transactions fabricated through bogus paper concerns of Shri Rajendra Jain Group companies which were engaged in providing accommodation entries?
(ii) Whether, on the facts and in the circumstances of the case and in law, the learned Tribunal was justified in estimating the addition in respect of bogus purchases at the rate of 6% of such purchases by relying on the decision of the Hon’ble Gujarat High Court in the case of Mayank Diamonds Pvt. Ltd. (2014)(11) TMI 812 as against the direction of the the Hon’ble High Court in that case to make addition at the rate of 5% of the total turnover?”
5. After considering the decision in case of Principal Commissioner of Income Tax vs. Pankaj K. Chaudhary in Tax Appeal No.617 of 2022, the Tax Appeals filed by the revenue were dismissed as the question of addition of purchases made by the Assessing Officer was restricted by the Tribunal to 6% was already confirmed by this Court.
6. Therefore, proposed questions in these Tax Appeals are also stand answered as the assesses being aggrieved by the very same order has preferred these appeals raising the questions of law.
7. These appeals are accordingly dismissed in view of the order passed in Tax Appeal No.109 of 2024.
