Commissioner Of Income Tax v. Shri Badri Narain Modi

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH ATJAIPUR D.B. Income Tax Appeal No. 174 / 2008 Commissioner Of Income Tax ----Appellant Versus Shri Badri Narain Modi ----Respondent Connected With D.B. Income Tax Appeal No. 200 / 2008 Commissioner Of Income Tax ----Appellant Versus Shri Badri Narain Modi ----Respondent _____________________________________________________ For Appellant(s) : Mr. Sameer Sharma for Mr. Anil MehtaFor Respondent(s) : Mr. Naresh Gupta _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 18/05/2017 1.In both these appeals, identical questions of law and factsarises, therefore, they are decided by this common judgment. 2.By way of these appeals, the appellant has challenged thejudgment of the Tribunal whereby the Tribunal has dismissed theappeal of the Department and allowed the appeal filed by theassessee. 2.1While admitting the appeals, this Court framed the following substantial question of law: Appeal No. 174/2008 (I) whether on the facts and circumstances of thecase, the ITAT was justified in deleting the addition ofRs. 15,13,657/- made on account of bogus purchasesinspite of the AO’s detailed investigation and findingthat the sellers are non existing and ITAT’s ownobservation that inspite of summons being issued,some have returned unserved and in some casesinspite of services the sellers had not appeared? (ii) Whether in the facts and circumstances of thecase, the ITAT was justified in deleting the additionmade on account of payment of commission forpurchasing bogus purchase bills worth Rs.61,50,297/-, when all the parties from whom the saidpurchase were made were not existing? Appeal No. 200/2008 “(I) whether on the facts and circumstances of thecase, the ITAT was justified in deleting the addition ofRs. 67,85,860/- made on account of bogus purchasesinspite of the AO’s detailed investigation and findingthat the sellers are non existing and ITAT’s ownobservation that inspite of summons being issued,some have returned unserved and in some casesinspite of services the sellers had not appeared? (ii) Whether in the facts and circumstances of thecase, the ITAT was justified in deleting the additionmade on account of payment of commission forpurchasing bogus purchase bills worth Rs.61,50,297/-, when all the parties from whom the saidpurchase were made were not existing? (iii) Whether the ITAT was justified in allowing theforeign travel expenses to Nairobi of Rs.1,37,848/- asbusiness expenditure merely by holding that theassessee is an exporter and therefore the expensesincurred on foreign trips can not be doubted?” 3Heard learned counsel for the parties. 3.1It is not in dispute that controversy regarding boguspurchase involved in this case is squarely covered by the decisionof this Court in CIT, Jaipur-II, Jaipur Vs. M/s Aditya Gems, D.B.Income Tax Appeal No. 234/2008, decided on 2.11.2016, whereinit has been held as under: (iii) Whether the ITAT was justified in allowing theforeign travel expenses to Nairobi of Rs.1,37,848/- asbusiness expenditure merely by holding that theassessee is an exporter and therefore the expensesincurred on foreign trips can not be doubted?” 3Heard learned counsel for the parties. 3.1It is not in dispute that controversy regarding boguspurchase involved in this case is squarely covered by the decisionof this Court in CIT, Jaipur-II, Jaipur Vs. M/s Aditya Gems, D.B.Income Tax Appeal No. 234/2008, decided on 2.11.2016, whereinit has been held as under: “Considering the law declared by the SupremeCourt in the case of Vijay Proteins Ltd. Vs.Commissioner of Income Tax, Special Leave toAppeal (C) No.8956/2015 decided on 06.04.2015whereby the Supreme Court has dismissed the SLPand confirmed the order dated 09.12.2014 passedby the Gujarat High Court and other decisions ofthe High Court of Gujarat in the case of SanjayOilcake Industries Vs. Commissioner of IncomeTax (2009) 316 ITR 274 (Guj) and N.K. IndustriesLtd. Vs. Dy. C.I.T., Tax Appeal No.240/2003decided on 20.06.2016, the parties are bound bythe principle of law pronounced in the aforesaidthree judgments.Court in the case of Vijay Proteins Ltd. Vs.Commissioner of Income Tax, Special Leave toAppeal (C) No.8956/2015 decided on 06.04.2015whereby the Supreme Court has dismissed the SLPand confirmed the order dated 09.12.2014 passedby the Gujarat High Court and other decisions ofthe High Court of Gujarat in the case of SanjayOilcake Industries Vs. Commissioner of IncomeTax (2009) 316 ITR 274 (Guj) and N.K. IndustriesLtd. Vs. Dy. C.I.T., Tax Appeal No.240/2003decided on 20.06.2016, the parties are bound bythe principle of law pronounced in the aforesaidthree judgments. 4.We remit back the case to the AssessingOfficer for deciding afresh on the factual matrix.The authority will accept the law but thetransaction whether it is genuine or not will beverified by the Assessing Officer on the basis ofthe aforesaid three judgments.” 3.2Therefore, in appeal No. 174/2008 the issues are answeredin favour of Department and matter is remitted back to theAssessing Officer to decide the same afresh and in Appeal No.200/2008, the first two issues are answered in favour ofDepartment. 3.3However regarding third issue in Appeal No. 200/2008, theexpenses were in assessee’s individual name and expenses wereincurred for expansion of business. Hence, the view taken by the Tribunal is required to be accepted, hence the third issue isanswered in favor of assessee. 4.Both the appeals stand disposed of as indicated above. A copy of this judgment be placed in each file. (INDERJEET SINGH),J. (K.S. JHAVERI),J. /bm gandhi 4-5