Madras High Court
M/S. Babu Apparels vs The Income Tax Officer on 7 February, 2022
TC (A) Nos. 585 to 588 of 2009
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 07.02.2022
CORAM :
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR.JUSTICE J. SATHYA NARAYANA PRASAD
Tax Case (Appeal) Nos. 585, 586, 587 and 588 of 2009
---
M/s. Babu Apparels
3(1), Saraswathi Layout
Dharapuram Road
Tirupur - 641 0608
represented by Partner ..Appellant in all the
P. Kumaresan Tax Case Appeals
Versus
The Income Tax Officer
Ward 1 (1) ..Respondent in all the
Tirupur Tax Case Appeals
TC (A) No. 585 of 2009:- Appeal filed under Section 260-A of The
Income Tax Act, 1961 against the Order dated 25.03.2008 passed in ITA (SS)
A.No. 1509/mds/2006 on the file of Income Tax Appellate Tribunal, Madras
"D" Bench, Chennai relating to Assessment year 1999-2000
TC (A) No. 586 of 2009:- Appeal filed under Section 260-A of The
Income Tax Act, 1961 against the Order dated 25.03.2008 passed in ITA (SS)
A.No. 1807/mds/2006 on the file of Income Tax Appellate Tribunal, Madras
"D" Bench, Chennai relating to Assessment year 2000-2001
TC (A) No. 587 of 2009:- Appeal filed under Section 260-A of The
Income Tax Act, 1961 against the Order dated 25.03.2008 passed in ITA (SS)
A.No. 1808/mds/2006 on the file of Income Tax Appellate Tribunal, Madras
"D" Bench, Chennai relating to Assessment year 2001-2002
TC (A) No. 588 of 2009:- Appeal filed under Section 260-A of The
Income Tax Act, 1961 against the Order dated 25.03.2008 passed in ITA (SS)
https://www.mhc.tn.gov.in/judis
TC (A) Nos. 585 to 588 of 2009
A.No. 1809/mds/2006 on the file of Income Tax Appellate Tribunal, Madras
"D" Bench, Chennai relating to Assessment year 2002-2003
For Appellant : Mr. Niranjan Rajagopalan
for M/s. G.R. Associates
in all the appeals
For Respondent : Mr. M. Swaminathan
Senior Standing Counsel
for Ms. V. Pushpa
in all the appeals
COMMON JUDGMENT
(Judgment of the Court was delivered by R. MAHADEVAN, J)
All these appeals are filed by the assessee questioning the validity of the
common order dated 25.03.2008 passed by the Income Tax Appellate
Tribunal, Madras "D" Bench relating to the assessment years 1999-2000,
2000-2001, 2001-2002 and 2002-2003 respectively.
2. The assessee is engaged in the business of manufacture and sale of
hosiery inner garments. During the year 2003-2004, a survey under Section
133A of The Income Tax Act, 1961 was conducted in the business premises of
various establishments in Tiruppur, including the assessee. During such
survey, various purchase bills in the names of non-existing business concerns
were recovered from the premises of the assessee. Thereafter, a notice was sent
to the assessee to explain as to why the value mentioned in the fake bills should
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TC (A) Nos. 585 to 588 of 2009
not be added as income, but, the assessee did not submit any explanation and
therefore, the Assessing Officer passed an orders of assessment and made
additions.
3. Aggrieved by the same, the assessee filed Appeals before the
Commissioner of Income Tax (Appeals) and the appellate authority restricted
the disallowance to 25%.
4. As against the order passed by the Appellate Authority, the
revenue took the matter on appeal before the Tribunal contending that once it
is established that the deduction was claimed on the basis of fake bills, the
disallowance is proper and in such event, the Appellate Authority ought not to
have restricted the disallowance to 25% by treating the fake purchases as cash
purchases. Accepting the aforesaid plea made on behalf of the revenue, the
Tribunal, by the common order dated 25.03.2008, which is impugned in these
appeals, allowed the appeals filed by the Revenue by holding that when it is
proved that the purchases made by the assessee are fake, the appellate
Authority ought not to have invoked Section 40A(3) of the Act for reducing the
disallowance. Aggrieved by the order dated 25.03.2008 passed by the
Tribunal, the assessee is before this Court with these Tax Case Appeals.
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TC (A) Nos. 585 to 588 of 2009
5. On 26.06.2009, these tax case appeals were admitted by this
Court by framing the following substantial questions of law namely
(i) Whether the Assessing Authority can proceed to
assess, solely based on an alleged admission made during a
survey under Section 133-A of the Income Tax Act?
(ii) Whether a statement made during survey under
Section 133-A of the Income Tax Act is admissible in law?
6. When these appeals are taken up for hearing today, the learned
counsel for the assessee brought to the notice of this Court that during the
pendency of these appeals, the assessee has filed Tax Case (Appeal) Nos. 1056
to 1059 of 2009 before this Court contending that the estimated addition at
70% by the Assessing Officer is arbitrary and the appellant alone has been
treated differently. It was also contended that the similarly placed persons like
the assessee, whose business premises were also inspected, have been imposed
with addition of only 20% to 25% of the purchases made by using fake bills
and there is no justification to treat 70% of the purchase made by the assessee
as bogus. Accepting such plea of the assessee, the Division Bench of this
Court, by judgment dated 29.01.2013, remanded the matter back to the
Assessing Officer to compare the case of the assessee with that of similarly
placed assessees and to arrive at a conclusion. It is submitted that pursuant to
the order dated 29.01.2013, the Assessing Officer completed the entire
assessment proceedings and passed final orders of assessment for the relevant
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TC (A) Nos. 585 to 588 of 2009
assessment years. Therefore, the learned counsel for the assessee would submit
that in view of the subsequent developments that had taken place after filing
these appeals, there is nothing survives for adjudication in these appeals.
7. In the light of the submission of the learned counsel for the
assessee, we are of the view that there is nothing survives for adjudication in
these Tax Case Appeals. Accordingly, all the Tax Case Appeals are disposed
of. No costs.
(R.M.D.J.,) (J.S.N.P.J.,)
07.02.2022
Index : Yes/No
Internet : Yes/No
rsh
To
The Income Tax Officer
Ward 1 (1)
Tirupur
https://www.mhc.tn.gov.in/judis
TC (A) Nos. 585 to 588 of 2009
R. MAHADEVAN, J
and
J. SATHYA NARAYANA PRASAD, J
rsh
TC (A) Nos. 585 to 588/2009
07.02.2022
https://www.mhc.tn.gov.in/judis
