Iapl/58/2017 Of Pr. Commissioner Of Income Tax-I Kanpur v. M/S Kushal Foods Pvt. Ltd. Kanpur

Court No. - 35 Case :- INCOME TAX APPEAL No. - 58 of 2017 Appellant :- Pr. Commissioner Of Income Tax-I KanpurRespondent :- M/S Kushal Foods Pvt. Ltd. KanpurCounsel for Appellant :- Ashish Agarwal,Ashish ACounsel for Respondent :- Ashish Bansal Hon'ble Bharati Sapru,J.Hon'ble Piyush Agrawal,J. (Delivered by Hon'ble Piyush Agrawal, J.) The present appeal has been preferred undersection 260 (A) of the Income Tax Act, 1961 against thejudgement & order dated 27.07.2016/19.09.2016 passedby the Income Tax Appellate Tribunal, Lucknow Bench“A”, Lucknow (hereinafter referred to as, 'the Tribunal')in Income Tax Appeal No. 840/LKW/2014 for theAssessment Year 2009-10. The present appeal was admitted by this Court on 09.01.2018 on the following question of law: “(I) Whether, the learned ITAT is justified in law and on facts indeleting the addition of Rs. 4,19,94,000/- made by the AssessingOfficer on account of bogus purchases without taking intoconsideration the facts and circumstances of the case and all thematerial on record?” The facts of the case are that the respondent – assessee is running a roller flour mill unit formanufacturing & trading of Aatta, Maida and Suji andalso, running manufacturing unit of biscuits on job work basis for Parle Biscuit Private Limited, Mumbai. On 26.10.2012, the respondent – assessee filed itsincome tax returns showing income of Rs.1,07,12,440/-. On 23.08.2011, the assessment wascompleted under section 143(3) of the Income Tax Act,1961 at a total income of Rs. 1,10,64,630/-. Thereafter, information was received from ADIT-3, Kanpur that one Shri Har Narayan Gupta, the Proprietorof M/s Annapurna Trading Company, Kanpur, has statedduring the course of statement under section 131(1-A)of the Income Tax Act that during the relevant period,he had raised bills to the respondent – assessee withoutany actual sale and received commission. On the said statement, proceedings under section 147 of the Income Tax Act were initiated. On10.10.2012, notice was issued under section 148 of the Income Tax Act for making reassessment. In the saidprocess, the respondent – assessee was required toproduce certain tax details to verify the facts thatpurchases, shown to the extent of Rs. 4,19,94,000/-,were not bogus purchases. On 21.02.2014, summons were issued undersection 131 of the Income Tax Act to Shri Har NarayanGupta, the Proprietor of M/s Annapurna TradingCompany to produce certain documents and to cross-examine the matter. Thereafter, order dated 28.02.2014under sections 147/148 of the Income Tax Act waspassed and addition of Rs. 4,19,94,000/- was made inthe income of the respondent – assessee making totaltaxable income of Rs. 5,30,58,630/-. The assessment order was assailed before theCommissioner of Income Tax (Appeals), who by orderdated 25.08.2014, partly allowed the appeal of therespondent – assessee. The order of the Commissionerof Income Tax (Appeals) was further assailed by the Revenue as well as by the respondent – assessee before the Tribunal. The Tribunal, by the impugned order, hasdismissed the appeal. We have heard learned counsel for the parties andperused the records of the case. The proceedings under sections 147/148 of the Income Tax Act have been initiated against therespondent – assessee on the basis of informationreceived from ADIT-3 and statement of Shri HarNarayan Gupta, the Proprietor of M/s AnnapurnaTrading Company, was recorded to the effect that he hasonly received commission from the respondent –assessee without there being any actual sale. In turn,the purchases of Rs. 4,19,94,000/- shown by therespondent – assessee were bogus and only a boguspurchase entry was made to reduce actual tax liabilities. In pursuance of the summons and on cross-examination of Shri Har Narayan Gupta, he has clearlyand categorically denied that he indulged in any kind of The proceedings under sections 147/148 of the Income Tax Act have been initiated against therespondent – assessee on the basis of informationreceived from ADIT-3 and statement of Shri HarNarayan Gupta, the Proprietor of M/s AnnapurnaTrading Company, was recorded to the effect that he hasonly received commission from the respondent –assessee without there being any actual sale. In turn,the purchases of Rs. 4,19,94,000/- shown by therespondent – assessee were bogus and only a boguspurchase entry was made to reduce actual tax liabilities. In pursuance of the summons and on cross-examination of Shri Har Narayan Gupta, he has clearlyand categorically denied that he indulged in any kind of mal-practice. He also denied to make any statement that he was only getting commission for issuing billswith actual sale to respondent – assessee. In view of the categorical findings of fact recorded by the Commissioner of Income Tax in favour of therespondent – assessee in appeal and confirmed by theTribunal vide impugned order, no question of law arisesin the present appeal. Moreover, the authorities below have recorded that M/s Annapurna Trading Company has produced itsbooks of account in the reassessment proceedings andthe same were verified by the Assessing Authority. Thequantity and details, furnished by the respondent –assessee, were neither disturbed nor rejected.Moreover, the respondent – assessee has shownpurchases from 13 parties, including M/s AnnapurnaTrading Company, and none of the parties, from whompurchases have been shown by the respondent –assessee, was found bogus purchases by the Assessing Authority. The payments have been made throughcheques and all the entries were duly made in the booksof account and the same were verified. In view of the findings of fact recorded in favour of the respondent – assessee, that the purchases werebeing made from M/s Annapurna Trading Company, nosubstantial question of law arises in the present appeal.The present appeal lacks merits and it is herebydismissed. The question of law is answered, accordingly, in favour of the respondent - assessee and against theRevenue. Order Date :-18.02.2019Amit Mishra