BASIR AHMED SISODIYA versus THE INCOME TAX OFFICER

Citation: [2020] 4 S.C.R. 581 · Decided: 24-04-2020 · Supreme Court of India · Bench: A.M. KHANWILKAR · Disposal: Appeal(s) allowed

Judgment (excerpt)

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[2020] 4 S.C.R. 581
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BASIR AHMED SISODIYA
v.
THE INCOME TAX OFFICER
(Civil Appeal No. 6110 of 2009)
APRIL 24, 2020
[A.M. KHANWILKAR AND DINESH MAHESHWARI, JJ.]
Income Tax Act, 1961 – ss.68, 143, 144, 145, 271 – Assessing
Officer, inter alia, relying on the Balance Sheet and the books of
account, added the credits amounting to Rs.2,26,000/- in declared
income of the appellant-assessee – Appellant filed appeal – Partly
allowed by Commissioner of Income Tax (Appeals) – CIT(A) upheld
the assessment order by Order dtd. 09.01.2003 – ITAT partly allowed
the appellant’s appeal however, the order regarding credits of
Rs. 2,26,000/- was upheld – High Court dismissed the appeal by
Order dated 21.08.2008 – Held: At the time of assessment, the
appellant failed to produce any explanation or evidence in support
of entries regarding purchases of marbles from unregistered dealers
to the extent of Rs. 2,26,000/- – Thus, the said transactions were
assumed as bogus entries (standing to the credit of named dealers
who were non-existent creditors of the assessee) – However, it has
now come on record that in the penalty proceedings, the appellant
produced affidavits of 13 unregistered dealers out of whom 12 were
examined by the Officer, who recorded their statements and did not
find any infirmity including about their credentials – Dealers stood
by the assertion made by appellant about the purchases on credit
from them; and which explanation has been accepted by the
appellate authority in the order dtd 13.01.2011 – Appellate authority
by Order dtd. 13.01.2011, had not only accepted the explanation
offered by the appellant but also recorded a clear finding of fact
that there was no concealment of income or furnishing of any
inaccurate particulars of income by the appellant – Addition of
Rs.2,26,000/- by the officer u/s.68 towards cash credit amount shown
against the names of concerned unregistered dealers for the
assessment year 1998-99 is set aside – Rest of the assessment Order
dtd. 30.11.2000 as modified by the CIT(A) by Order dtd. 09.01.2003
remains undisturbed.
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SUPREME COURT REPORTS
[2020] 4 S.C.R.
Allowing the appeal, the Court
Held: 1.1 In I.A.No. 57442/2011 permission has been
sought to bring on record subsequent events. By this application,
the appellant/assessee has placed on record an order passed by
the CIT(A) dated 13.1.2011, which considered the challenge to
the order passed by the Income Tax Officer u/s. 271(1)(c) dated
17.11.2006 qua the appellant for the self-same assessment year
1998-1999. The Income-Tax Officer had passed the said order
as a consequence of the conclusion reached in the assessment
order which had by then become final upto the stage of ITAT
vide order dated 27.4.2006- to the effect that the stated purchases
by the appellant from unregistered dealers were bogus entries
effected by the appellant. Resultantly, the penalty proceedings
u/s. 271 were initiated by the Officer. That order, however, has
now been set aside by the appellate authority [CIT(A)] in the
appeal preferred by the appellant, vide order dated
13.1.2011.[Para 10][589-E-H][590-A-C]
1.2 The appellant/assessee despite being given sufficient
opportunity, failed to prove the correctness and genuineness of
his claim in respect of purchases of marbles from unregistered
dealers to the extent of Rs. 2,26,000/- (Rupees two lakhs twenty-
six thousand only). Resultantly, the said transactions were
assumed as bogus entries (standing to the credit of named dealers
who were non-existent creditors of the assessee). However, it
has now come on record that the appellant/assessee in penalty
proceedings offered explanation and caused to produce affidavits
and record statements of the concerned unregistered dealers
and establish their credentials. That explanation has been
accepted by the CIT(A) vide Order dated 13.1.2011. In paragraph
17 of the said decision reproduced hitherto, it has been noted
that the Officer recorded statements of 12 unregistered dealers
out of 13 and their identity was also duly established. After
analyzing the evidence so produced by the appellant/assessee,
the appellate authority [(CIT(A)] noted that the Officer had neither
doubted the identity of those dealers nor any adverse comments
were offered in reference to their version regarding sale of marble
slabs by them to the appellant/assessee in the financial year
relevant to assessment year 1998-1999 and receipt of payments
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aft

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