JAEE VISHWAS JOSHI, MUMBAI V. ASST CIT CIRCLE-21(1), MUMBAI

ITA 1028/MUM/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8898 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 10-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SAMATHA
• Keywords: Reopening of assessment; Depreciation; Additional evidence; Tangible material; Difference of opinion; Accommodation entries; Change of opinion; TDS
• Section: 143(3); 142(1); 133A; 133(6); 143(1); 13; 22; 147; 131; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F, BENCH MUM BAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER & SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.1028/MUM/2020 ( ASSESSMENT YEAR: 2011-12 ) JAEE VISHWAS JOSHI 1002, OM CO-OP.HOUSING SOCIETY LIMITED M.B.RAUT ROAD SHIVAJI PARK, DADAR MUMBAI-400 028 VS. ACIT,CIRCLE-21(1) 8 TH FLOOR, KAUTILYA BHAVAN BKC MUMBAI-400 051 PAN/GIR NO. A ELPA7074L ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY MS. RITIKA AGARWAL, AR REVENUE BY MS. SAMATHA, SR.DR DATE OF HEARING 23/06/2020 DATE OF PRONOUNCEME NT 29 /07/2020 / O R D E R PER G.MANJUNATHA (A.M) : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)33, MUMBAI, DATED 31/01/2020 AND PERTAINS TO ASSESSMENT YEAR 20 11-12. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- '1. NOTICE U/S. 148 WITHOUT JURISDICTION - LD. A.O. ISSUED NOTICE U/S. 148 REOPENING THE ASSESSMENT FOR A.Y. 2011-12. APPELLAN T REQUESTED A.O. TO KINDLY FURNISH REASONS FOR REOPENING ASSESSMENT. LE TTER OF A.O. UNDER THE TITLE REASONS CONTAINED ONLY ALLEGATION AGAINST THE ASSESSEE BUT NO MATERIAL OR DOCUMENTS BEFORE THE A.O. FOR FORMATION OF HIS BELIEF THAT INCOME HAD ESCAPED ASSESSMENT. HOWEVER, THE A.O. HA D ABSOLUTELY NO INFORMATION OR MATERIAL BEFORE HIM FOR ISSUING THE SAID NOTICE. THEREFORE, THE NOTICE IS BAD IN LAW. DETAILED GROUNDS ATTACHED . 2. PROVISIONS OF SECTION 144A VIOLATED - LOOKING AT THE MANNER IN WHICH ASSESSMENT PROCEEDINGS WERE CONDUCTED, APPELLANT PE RCEIVED THAT THE ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 2 A.O. WAS PROCEEDING WITH PREMEDITATED VIEW PREJUDIC IAL TO HER. SHE MOVED APPLICATION BEFORE JCIT U/S. 144A. LD. JCIT I NSTEAD OF GIVING DIRECTIONS TO A.O., LEFT THE DECISION TO A.O., DEFE ATING THE PURPOSE OF SECTION 144A. APPELLANT MADE FURTHER SUBMISSIONS AN D APPLICATIONS TO JCIT ON 26/12/2018. JCIT UNDER THE NAME DIRECTION E VADED HIS RESPONSIBILITY UNDER THE LAW AND TRANSFERRED AUTHOR ITY TO MAKE DECISIONS TO A.O. PROVISIONS OF SECTION 144A STAND VIOLATED R ENDERING ORDER BAD IN LAW. DETAILED GROUNDS ATTACHED. 3. BOTCHED UP INVESTIGATION BY ADIT AND A.O. - TRAN SACTIONS BETWEEN THE APPELLANT AND AVRON AND SARVOTTAM TOOK PLACE IN F.Y . 2010-11. INVESTIGATION BY ADIT(LNV.) WAS DONE IN F. Y. 2017- 18. FURTHER INVESTIGATION WAS DONE BY A.O. IN THE F.Y. 2018-19. THUS THERE WAS A GAP OF 7 YEARS WHICH IS CONSIDERABLY LONG PERIOD DU RING WHICH MANY THINGS CAN CHANGE. COGNIZANCE OF THIS POSSIBILITY H AD TO BE TAKEN INTO ACCOUNT WHILE DOING INVESTIGATION. IT SEEMS THAT NE ITHER ADIT (INV.) NOR A.O. TOOK THESE POSSIBILITIES INTO CONSIDERATION AN D DREW INFERENCE PREJUDICIAL TO THE APPELLANT. DETAILED GROUNDS ATTA CHED. 4. STATEMENT OF MR. DIPAN PATEL RECORDED AT UNREASO NABLY SHORT NOTICE - AFFIDAVIT OF MR. DIPAN PATEL WAS FILED WITH A.O. ON 19/09/2018. A.O. ISSUED SUMMONS AFTER THREE MONTHS ON 19/12/2018 AND CALLED MR. PATEL FOR RECORDING STATEMENT ON 21/12/2018 GIVING ONE DA Y TIME. ONE CANNOT BE EXPECTED TO PROCURE ALL THE DOCUMENTS PERTAINING TO F.Y. 2010-11 IN THE YEAR 2018-19 IN ONE DAY. WAITING FOR THREE MONT HS, THEN ISSUING SUMMONS ON 19/12/2018 AND CALLING HIM TO RECORD A S TATEMENT ON 21/12/2018 FOR TRANSACTIONS OF F.Y. 2010-11 WAS REA LLY AT AN UNREASONABLY SHORT NOTICE. DETAILED GROUNDS ATTACHE D. 5. A.O. OVERLOOKED THE FOLLOWING - A.O. OVERLOOKED PERFORMANCE OF THE APPELLANT IN F.Y. 2011-12 BECAUSE CONTACTS WITH COR PORATE WERE ESTABLISHED DURING F.Y. 2010-11 THROUGH THE INTRODU CTION PROVIDED BY M/S. SARVOTTAM AND AVRON -CORPORATES CAME TO KNOW THE ME RIT AND CALIBER OF THE APPELLANT AND THE APPELLANT GOT ASSIGNMENTS WIT HOUT INVOLVEMENT OF ANY BROKERS. IT IS NECESSARY TO UNDERSTAND THAT HAD BUSINESS COUNSELING FEES NOT BEEN PAID IN F. Y. 2010-11, THE APPELLANT WOULD NOT HAVE MADE ANY INCOME WITHOUT INTRODUCTION BY AVRON AND SARVOT TAM THROUGH MR. DIPAN PATEL. DETAILED GROUNDS ATTACHED.' 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL, DERIVES INCOME FROM ITS PROPRIETARY CON CERN M/S FINWIZ CONSULTANT, FILED HER RETURN OF INCOME FOR AY 2011- 12 ON 22/09/2011, DECLARING TOTAL INCOME AT RS.2,95,07,190/- AND SAID RETURN WAS PROCESSED U/S 143(1) OF THE I.T.ACT, 1961 ON 08/02/ 2012, ACCEPTING INCOME DECLARED IN THE RETURN. THE ASSESSMENT HAS B EEN ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 3 SUBSEQUENTLY REOPENED U/S 147 OF THE I.T.ACT, 1961 FOR THE REASONS RECORDED, AS PER WHICH INCOME CHARGEABLE TO TAX HAD BEEN ESCAPED ASSESSMENT AND ACCORDINGLY, NOTICE U/S 148, DATED 3 1/03/2018 WAS DULY SERVED ON THE ASSESSEE. IN RESPONSE TO NOTICE, THE ASSESEE HAS SUBMITTED A LETTER ON 09/04/2018 SEEKING REASONS FO R REOPENING OF ASSESSMENT. SIMULTANEOUSLY, THE ASSESSEE SUBMITTED THAT RETURN ALREADY FILED FOR AY 2011-12 SHALL BE TREATED AS RE TURN FILED IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE I.T.ACT, 1 961. THEREAFTER, REASONS RECORDED FOR REOPENING OF ASSESSMENT WAS PR OVIDED TO THE ASSESSEE ON 06/07/2018. THE ASSESSEE HAD FILED HER OBJECTIONS FOR INITIATION PROCEEDINGS U/S 148 OF THE I.T.ACT, 1961 , VIDE LETTER DATED 19/09/2018 AND 22/10/2018. THE LD. AO HAS DISPOSED OF OBJECTIONS FILED BY THE ASSESSEE ON 12/11/2018 AND REJECTED TH E CONTENTIONS OF THE ASSESSEE. 4. THEREAFTER, THE CASE HAS BEEN TAKEN-UP FOR SCRUT INY AND NOTICE U/S 142(1) WAS ISSUED AND CALLED UPON THE ASSESSEE TO FILE NECESSARY EVIDENCES, INCLUDING DETAILS OF INCOME EA RNED FROM ITS PROPRIETARY BUSINESS AND EXPENSES INCURRED AGAINST SAID INCOME. IN RESPONSE TO NOTICES, THE ASSESSEE HAS FILED VARIOUS DETAILS, INCLUDING PAYMENTS MADE TO M/S AVRONS CONSULTANCY SERVICES PV T. LTD. AND M/S SARVOTTAM ADVISORY PVT.LTD. ALONG WITH DETAILS OF BILLS ISSUED BY THE PARTIES. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE LD. AO AFTER CONSIDERING RELEVANT SUBMISSIONS OF THE AS SESSEE AND ALSO TAKEN NOTE OF VARIOUS FACTS BROUGHT OUT BY THE DEPA RTMENT DURING INVESTIGATION CARRIED OUT IN THE CASE OF M/S ALTIU S FINSERVE PVT.LTD., HAS CAME TO THE CONCLUSION THAT EXPENDITURE INCURRE D UNDER THE HEAD BUSINESS COUNSELING CHARGES AND PAID TO M/S SARVOTT AM ADVISORY PVT.LTD AND M/S AVRONS CONSULTANCY SERVICES PVT.LT D IS NON ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 4 GENUINE EXPENDITURE, WHICH IS BOOKED TO REDUCE PROF IT FOR THE YEAR. THE LD. AO HAS DISCUSSED THE FACTS OF THE CASE AND THE MODUS OPERANDI OF THE ASSESSEE IN DETAIL, IN LIGHT OF DETAILED IN VESTIGATION WAS DONE BY THE INVESTIGATION WING OF THE DEPARTMEN T WHEREIN IT WAS FOUND AND ESTABLISHED THAT M/S. SARVOTTAM ADVISORY PVT. LTD. AND M/S. AVRON'S CONSULTANCY SERVICES PVT. LTD. WERE SHE LL ENTITIES AND TRANSACTIONS WITH THEM WERE NOT GENUINE. THE AO FUR THER OBSERVED THAT THE ASSESSEE HAS MADE BOGUS PAYMENTS TO M/S. A VRON'S CONSULTANCY SERVICES PVT. LTD. AND M/S, SARVOTTAM A DVISORY PVT. LTD OF RS. 2,33,35,000/- AND DEBITED UNDER THE HEAD BUS INESS COUNSELING CHARGES. THE RELEVANT OBSERVATIONS OF TH E AO ARE AS UNDER: THE ENQUIRIES DONE BY THE INVESTIGATION WING REVEA LS THAT IN CASE OF AVRON CONSULTANCY PVT. LTD., THE REVENUE OF THE COMPANY DURING THE A.Y. 2011-12 WAS RS.18 CRORES AND PROFIT BEFORE INTEREST AND DEPRECIATION WAS RS.2.30 LAKHS. DURING THE COURSE O F SURVEY ACTION, IT WAS FOUND THAT COMPANY HAS NEVER BEEN OP ERATED AND ALSO PRESENTLY NOT OPERATING FROM THE ADDRESS GIVEN I.E. 704 SAI RATH CHS, KESAR KUNJ BUILDING,TELLY GULLY CROSS LAN E, ANDHERI (E), MUMBAI-69. DURING THE A.Y. 2012-13, ADDRESS OF THE COMPANY WAS CHANGED TO 4A, BBD BAUG, KOLKATA, WEST BENGAL-700001. THE ENQU IRY AT THE SAID ADDRESS AT KOLKATA REVEALED THAT NO SUCH COMPA NY EVER OPERATED FROM THE SAID ADDRESS AND ALSO PRESENTLY N OT OPERATING FROM THE SAID ADDRESS. THE ENQUIRIES DONE BY THE INVESTIGATION WING ALSO R EVEALS THAT IN CASE OF SARVOTTAM ADVISORY PVT. LTD., DURING THE SP OT VERIFICATION, IT WAS FOUND THAT THE SAID COMPANY WAS NOT OPERATING F ROM THE GIVEN ADDRESS I.E. 704 SAI RATH CHS KESAR KUNJ BUILDING, TELLY GULLY CROSS LANE, ANDHERI (E), MUMBAI-69. ENQUIRY AT THE REGISTERED OFFICE OF THE COMPANY (SHOP NO.1, LALWANI BHAVAN, O PPOSITE KASTURBA HOSPITAL, SANE GURUJI ROAD, SAT RASTA, MAH ALAXMI, MUMBAI 400011) ALSO REVEALED THAT THERE WAS NO SUCH COMPANY OPERATING FROM THIS ADDRESS. EVEN THE DIRECTOR KAVI TA PATEL COULD NOT BE LOCATED AT HER GIVEN ADDRESS AND NOBODY IN T HE LOCALITY COULD TELL ABOUT KAVITA PATEL. RESIDENTIAL ADDRESS OF ANO THER DIRECTOR SAMEER PATEL AT B-106,JIYDANI ROAD, VASAI VIRAR (E) THANE WAS ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 5 FOUND TO BE VAGUE AND COULD NOT BE LOCATED. AS PER ITD SYSTEMS ALSO, SAMEER PATEL IS A NON FILER. THE INVESTIGATION WING HAS ALSO RECORDED STATEMENT OF MR. VISHWAS V. JOSHI , PRINCIPAL OFFICER OF M/S. FINWIZ CONSUL TANTS ON 01/02/2018 WHO STATED THAT SINCE THE PROPOSALS WERE INTRODUCED BY THE SHRI DIPAN PATEL M/S. AVRON'S CONSULTANCY SERVI CES 'PVT LTD. AND M/S. SARVOTTAM ADVISORY PVT. LTD., BUSI NESS COUNSELING FEES FOR INTRODUCING ALTIUS FIN SERVE PVT. LTD, AND FOR ENSURING RECEIPT OF BROKERAGE FROM M/S. ALTIUS FINSERVE PVT. LTD. WAS PAID. THE INVESTIGATION WING FINALLY CONCLUDED THAT THE P AYMENTS HAVE BEEN MADE TO ENTITIES WHO ARE NOT IN EXISTENCE AND ARE SHELL ENTITIES, TO REDUCE THE TAX LIABILITIES OF DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE FIL ED DETAILS RELATING TO PAYMENTS MADE TO AVRON CONSULTANCY SERV ICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. BY BANKS AND OTHER D ETAILS LIKE INVOICE RECEIVED FROM THE PARTIES, TDS DETAILS ETC. HOWEVER, NO DETAILS WERE PROVIDED TO THE A.O, AS TO WHAT SERVIC ES HAVE BEEN PROVIDED BY THE ENTITIES TO THE ASSESSEE, DOCUMENTA RY EVIDENCE IN SUPPORT OF SERVICES RENDERED AND ANY CORRESPONDENCE BETWEEN THESE TWO ENTITIES AND THE ASSESSEE. NOTICE U/S. 133(6) WERE ISSUED TO AVRON CONSULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. (BOTH LOCATED A T MUMBAI) TO VERIFY THE SERVICES RENDERED BY THEM. HOWEVER, THES E NOTICES WERE UNSERVED AND RETURNED BY THE POSTAL AUTHORITIES WHI CH PROVES THAT THESE COMPANIES ARE SHELL COMPANIES AND ACCOMMODATI ON TRANSACTIONS HAVE BEEN ENTERED TO REDUCE THE TAX LI ABILITY OF FINWIZ CONSULTANTS WITHOUT PROVIDING ANY SERVICES. THE ASS ESSEE WAS ALSO INFORMED THAT THE NOTICES U/S. 133(6) WERE RETURNED BACK. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ST ATEMENT OF THE ASSESSEE I.E. MRS. JAEE VISHWAS JOSHI U/S. 131 WAS RECORDED ON 26/11/2018 WHICH HAS BEEN REPRODUCED IN THE ASSESSM ENT ORDER. IN HER STATEMENT, SHE STATED THAT ONE MR. DIPAN PATEL INTRODUCED M/S. ALTIUS FINSERVE PVT. LTD. TO FINWIZ CONSULTANTS AND AN AFFIDAVIT WAS SIGNED BY MR. DIPAN PATEL TO THIS EFFECT. ON THE QU ESTION REGARDING SERVICES RENDERED BY AVRON CONSULTANCY SERVICES PVT . LTD. & SARVOTTAM ADVISORY PVT. LTD., IT WAS STATED THAT MR . DIPAN PATEL REPRESENTED THE ABOVE MENTIONED TWO COMPANIES. HE N OT ONLY INTRODUCED THE ASSESSEE TO ALTIUS FINSERVE BUT ALSO ENSURED THAT THE ASSESSEE RECEIVED BROKERAGE ONCE THE PROPOSALS WENT THROUGH. SHE RELIED ON INVOICES ISSUED BY AVRON CONSULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. IN SUPPORT OF H ER CLAIM. IT WAS ALSO STATED THAT THE ASSESSEE HAS RENDERED SERVICES OF ARRANGING LOAN FACILITIES FOR CORPORATES NAMELY DLF, ERA INFR A ENGINEERING LTD., AMTEK AUTO LTD. AND SERVICES WERE ALSO RENDER ED TO M/S. ALTIUS FINSERVE DURING F.Y. 2009-10 & 2010-11. ON T HE QUESTION OF PROVIDING ADDRESSES OF AVRON CONSULTANCY SERVICES P VT. LTD. & ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 6 SARVOTTAM ADVISORY PVT. LTD. AND THE NAMES OF THE D IRECTORS OF THE TWO COMPANIES, SHE STATED THAT SHE IS AWARE OF THE WHEREABOUTS OF THE PERSON REPRESENTING AVRON CONSULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. AND MR. VISHWAS JOSHI, PR. OFFICER OF M/S. FINWIZ CONSULTANTS MAY BE ABLE TO TELL THE NAM E OF DIRECTORS OF THE TWO COMPANIES. ON THE QUESTION OF ANY AGREEMENT FOR RECEIVING OR PAYING BROKERAGE/COMMISSION OR CONSULTANCY, IT W AS STATED THAT THE PRINCIPAL OFFICER VISHWAS JOSHI MAY BE ABLE TO ANSWER THIS QUESTION. ON THE ABOVE-MENTIONED STATEMENT OF THE ASSESSEE, I T WAS HELD THAT THE ASSESSEE IS NOT AWARE OF ANYTHING ABOUT TH E TWO COMPANIES TO WHOM PAYMENTS HAVE BEEN MADE. SHE IS N OT ABLE TO PROVE AS TO WHAT SERVICES HAS BEEN PROVIDED BY THE TWO ENTITIES FOR MAKING SUCH HUGE PAYMENTS. NO DOCUMENTARY EVIDENCE SUCH AS ANY CORRESPONDENCE BETWEEN ASSESSEE AND TWO ENTITIES, A NY CORRESPONDENCE WITH BANKS REGARDING PROGRESS OF PRO POSAL ETC. HAS BEEN SUBMITTED BY THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, LETTER S WERE FILED ON ALLEGED LETTER HEADS OF THESE TWO ENTITIES SIGNED B Y SOME UNKNOWN PERSON WHO DOES NOT SEEM TO BE AUTHORISED PERSONS O F THE COMPANY, REQUESTING THAT NOTICE ISSUED U/S. 133(6) COULD NOT BE SERVED BECAUSE OFFICE WAS LOCKED AND IT WAS REQUEST ED TO SEND NOTICES AGAIN. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE JC IT RANGE 21(1), MUMBAI ISSUED DIRECTION U/S. 144A TO CARRY O UT FURTHER INVESTIGATION BY CONDUCTING FIELD VERIFICATION IN A LL THE KNOWN ADDRESSES OF AVRON CONSULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD., LOCATED AT MUMBAI AND ALSO ATTE MPT TO GATHER INFORMATION FROM KOLKATA WHOSE ADDRESS IS MENTIONED IN THE FILE ESPECIALLY IN VIEW OF THE DATA SUBMITTED BY THE ASS ESSEE. FURTHER, AS THE ASSESSEE HAS PRODUCED THE AFFIDAVIT DATED 28 /08/2018 SIGNED BY MR. DIPAN PATEL, HIS STATEMENT SHOULD BE RECORDED TO VERIFY THE SAID AFFIDAVIT AS MR. DIPAN PATEL WAS NE ITHER AN M.D. NOR PRINCIPAL OFFICER OF EITHER OF THE ENTITIES TO WHOM PAYMENTS WERE MADE. THE NEXUS OF SHRI DIPAN PATEL WITH THE TWO CO NCERNS SHOULD BE EXAMINED. PROMOTERS AND MANAGING DIRECTORS OF AV RON CONSULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. SHOULD ALSO BE LOCATED AND EXAMINED. THEREFORE, NOTICE U/S. 133(6) WERE ISSUED TO AVRON CONSULTANCY SERVICES PVT. LTD. (KOLKATA) & SARVOTTAM ADVISORY P VT. LTD. (MUMBAI). THE NOTICE SENT TO KOLKATA IN RESPECT OF AVRON CONSULTANCY SERVICES PVT. LTD. RETURNED UNSERVED WI TH A COMMENT INSUFFICIENT ADDRESS WANTING ROOM NO. THEREFORE, ON E MORE EFFORT WAS MADE TO SERVE THE NOTICE THROUGH INCOME TAX INS PECTOR SHRI S.B. PANDIT. THE REPORT OF INSPECTOR WAS REPRODUCED IN THE ASSESSMENT ORDER WHO REPORTED THAT NO OFFICE/BUSINE SS WAS CARRIED OUT FROM THE RESIDENTIAL ADDRESS AND SHRI DIPAN PAT EL GENERALLY VISIT ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 7 THE FLAT WHICH REMAINS LOCK OTHERWISE. ON THE BASIS OF ABOVE ENQUIRIES, THE A.O. OPINED THAT THESE COMPANIES ARE SHELL COMPANIES. COMMISSIONS U/S. 131(1)(D) OF THE IT. ACT WAS ISSUE D TO THE ACIT CIR. 6(2), KOLKATA WHO HAPPENS TO BE JURISDICTIONAL A.O. OF AVRON CONSULTANCY SERVICES PVT. LTD. THE SUMMONS ISSUED B Y HIM COULD NOT BE SERVED AND THE INSPECTOR ON FIELD VERIFICATI ON GAVE A REPORT THAT HE COULD NOT FIND ANY SUCH COMPANY IN THE STAT ED ADDRESS. SUMMONS U/S. 131 WAS ISSUED TO M/S. SARVOTTAM ADVIS ORY PVT. LTD. AT THEIR KNOWN ADDRESS 704, SAIRATH CHS, KESAR KUNJ BUILDING, TELLY GULLY, CROSS LANE, ANDHERI (E), MUMBAI-69. TH IS TIME THE SUMMON WAS RECEIVED BY A PERSON SITTING IN THE PREM ISES CLAIMING HIS NAME AS CHINTAN SHAH BUT SARVOTTAM ADVISORY PVT . LTD. DID NOT RESPOND THE SUMMONS EVEN TILL DATE OF PASSING THE A SSESSMENT ORDER. NOTICE U/S. 133(6) DATED 18/12/2018 WAS ISSUED TO T HE PR. OFFICER OF M/S. CLIENT BRIGHT CONSULTANTS PVT. LTD. (FORMERLY KNOWN AS M/S. AVRON CONSULTANCY SERVICES PVT. LTD.) AT THEIR ADDR ESS 4A, COUNCIL HOUSE ESTATE, KOLKATA -1. THIS NOTICE HAS ALSO BEEN RECEIVED BACK AS UNSERVED. THE ASSESSEE WAS SHOW CAUSE VIDE NOTICE U/S. 142(1) DATED 4/12/2018 AS TO WHY THE EXPENSES DEBITED IN THE NAM E OF AVRON CONSULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. BE NOT TREATED AS HER INCOME SINCE IT WAS MADE TO SHEL L COMPANY. THE ASSESSEE HOWEVER, FAILED TO SUBMIT ANY SATISFACTORY EXPLANATION. TO VERIFY THE CONTENTS OF THE AFFIDAVIT OF SHRI DIP AN PATEL, HIS STATEMENT WAS RECORDED ON 21/12/2018 WHICH IS REPRO DUCED IN THE ASSESSMENT ORDER FROM PAGE 13 TO 16. SHRI DIPAN PAT EL STATED THAT AS A BUSINESS CONSULTANT HE HAD FINALIZED TWO THREE BUSINESS DEALS FOR AVRON CONSULTANCY SERVICES PVT. LTD. & SARVOTTA M ADVISORY PVT. LTD. WHICH WERE IN NATURE OF BROKERAGE OR COMMISSIO N OR REFERRAL FEES. HE FURTHER STATED THAT HE WAS NOT CARRYING AN Y EVIDENCE FOR THE SAME AND COULD PROVIDE LATER ON E-MAIL OR BY PO ST. HE STATED THAT SHRI ARUN KEDIA IS DIRECTOR IN AVRON CONSULTAN CY SERVICES PVT. LTD. AND SHRI TAPAN DOSHI IS A DIRECTOR IN SARVOTTA M ADVISORY PVT. LTD. BUT HE WAS NOT HAVING ANY CURRENT CONTACT DETA ILS OF THE TWO COMPANIES. HE WAS NOT AWARE OF THE RESIDENTIAL ADDR ESSES OF THE DIRECTORS OF THE TWO COMPANIES. SHRI DIPAN PATEL WA S C.A. AND HAD DECLARED THE ADDRESS OF 704, SAIRATH CHS KESAR KUNJ BUILDING, TELLY GULLY CROSS LANES, ANDHERI (E) AS HIS RESIDEN TIAL ADDRESS WHICH WAS ALSO THE BILLING ADDRESS OF THE TWO CONCE RNS. HE FURTHER STATED THAT BOTH THE COMPANIES RECEIVED THE PAYMENT S AS HE HAD DONE THE CANVASSING ON BEHALF OF BOTH THE COMPANIES . HE ALSO STATED THAT HE DOES NOT KNOW THE EXACT AMOUNT OF LO ANS ARRANGED BY FINWIZ CONSULTANTS THROUGH HIM BUT IN THE CASE O F DLF {THROUGH ALTIUS FINSERVE PVT. LTD.), IT WAS APPROXIMATELY RS .1000 CRORES. ON ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 8 THE EXISTENCE OF ANY AGREEMENT IT WAS STATED BY SHR I DIPAN PATEL THAT THERE WAS NO FORMAL AGREEMENT BUT SEVERAL E-MA ILS AND OTHER COMMUNICATION WITH BOTH THE PARTIES ARE AVAILABLE W HICH HE PROMISED TO ORGANIZE AND SUBMIT LATER. ON THE BASIS OF ANSWERS GIVEN BY SHRI DIPAN PATEL T O VARIOUS QUESTIONS, THE A.O. CONCLUDED THAT HIS REPLIES ARE EITHER EVASIVE OR INCONCLUSIVE LEADING TO NO EVIDENCE AND HE WAS NOT CONNECTED WITH THE TWO PARTIES AND HE EXPRESSED HIS INABILITY TO P ROVIDE CONTACT/DETAILS OF DIRECTORS/PROMOTERS OF AVRON CON SULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. S HRI DIPAN PATEL FAILED TO PRODUCE ANYTHING TILL THE DATE OF PASSING THE ORDER WHICH HE HAD PROMISED IN THE STATEMENT TO FILE AND HENCE THE A.O. HELD AFFIDAVIT OBTAINED FROM MR. DIPAN PATEL BY THE ASSE SSEE TO MISLEAD THE DEPARTMENT. THE ASSESSEE MADE ANOTHER APPLICATION U/S 144A ON 2 6.12.2018 BEFORE THE RANGE HEAD WHO DIRECTED THE AO TO GO THR OUGH CERTAIN POINTS HIGHLIGHTED BY THE ASSESSEE AND ALSO PERUSE THE CASE LAWS RELIED ON BY THE ASSESSEE AND TAKE APPROPRIATE DECI SION AS PER LAW VIS-A-VIS THE FACTS AND CIRCUMSTANCES OF THE PRESEN T CASE. THE AO TAKING INTO CONSIDERATION THE DIRECTION OF T HE JCIT U/S 144A EXAMINED THE MATTER AND CAME TO CONCLUSION THAT THE ALLEGATIONS MADE BY THE ASSESSEE ARE FUTILE AND BASELESS. IN VIEW OF ABOVE DISCUSSION AND ON THE BASIS OF INV ESTIGATION CARRIED OUT BOTH INDEPENDENTLY AND THROUGH ACIT KOL KATA, THE A.O. HELD THAT AVRON CONSULTANCY SERVICES PVT. LTD. & SA RVOTTAM ADVISORY PVT. LTD. ARE NOTHING BUT SHELL COMPANIES AND ACCORDINGLY AMOUNTS PAID TO THEM TO THE EXTENT OF RS.2,33,35,00 0/- WAS DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSE SSEE. 5. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A). BEFORE TH E LD.CIT(A), THE ASSESSEE HAS CHALLENGED REOPENING OF ASSESSMENT, ON THE GROUND THAT REASONS FOR REOPENING CONTAINED ONLY ALLEGATIO NS AGAINST M/S ALTIUS FINSERVE PVT.LTD. AND AGAINST THE ASSESEE, T HERE IS NO TANGIBLE MATERIALS/DOCUMENTS/EVIDENCE OR ANY INFORMATION BEF ORE THE LD. AO IN SUPPORT OF THE ALLEGATIONS FOR FORMATION OF HIS BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. THE ASSES EE HAD ALSO CHALLENGED ADDITIONS MADE BY THE LD. AO TOWARDS DIS ALLOWANCES OF BUSINESS COUNSELING CHARGES PAID TO M/S SARVOTTAM A DVISORY ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 9 CONSULTANCY SERVICES PVT.LTD. AND M/S AVRONS CONSUL TANCY SERVICES PVT.LTD ALONG WITH AFFIDAVIT OF SHRI DIPEN PATEL, WHO WAS THE THEN DIRECTOR OF TWO COMPANIES AND ARGUED THAT BUSINESS COUNSELING CHARGES HAS BEEN PAID TO THOSE TWO COMPANIES FOR RE FERRING ASSESEE TO M/S ALTIUS FINSERVE PVT.LTD. AND ALSO, FOR DOIN G NECESSARY WORK IN CONNECTION WITH SERVICES RENDERED TO M/S ALTIUS FIN SERVE PVT.LTD. 6. THE LD.CIT(A) AFTER CONSIDERING RELEVANT SUBMISS IONS OF THE ASSESSEE AND ALSO BY RELIED UPON VARIOUS JUDICIAL P RECEDENTS REJECTED LEGAL ARGUMENTS TAKEN BY THE ASSESSEE CHAL LENGING VALIDITY OF REOPENING OF ASSESSMENT BY OBSERVING THAT THE LD . AO HAD CORRECTLY ARRIVED AT REASONS TO BELIEVE THAT EXPENS ES OF RS.2.33 CORES WERE PRIMA-FACIE NOT GENUINE AFTER APPLYING HIS MIND WITH REFERENCE TO RECORDS OF THE ASSESSEE AND ON EXAMINI NG THE INFORMATION OF THE ADIT, WHICH WAS BASED ON SURVEY/ SPOT VERIFICATION OF M/S ALTIUS FINSERVE PVT.LTD. AND ST ATEMENT OF SHRI VISHWAS JOSHI. THEREFORE, HE OPINED THAT THE REOPEN ING OF ASSESSMENT IN THE GIVEN FACTS OF PRESENT CASE IS ON SOUND FOOTING AND THERE IS NO MERIT IN THE ARGUMENTS OF THE ASSES SEE THAT THE LD. AO HAS FAILED TO APPLY HIS MIND AND MECHANICALLY RE OPENED THE ASSESSMENT ON THE BASIS OF INFORMATION RECEIVED FRO M THE ADIT. THE RELEVANT OBSERVATIONS OF THE LD.CIT(A) ARE AS UNDER :- 29. I HAVE CAREFULLY GONE THROUGH THE FINDINGS GIV EN IN THE ASSESSMENT ORDER AND THE STATEMENT OF FACTS AND GROUNDS OF APP EAL AND THE WRITTEN SUBMISSION OF THE APPELLANT. 29.1 FIRST OF ALL, IT IS DEEMED PROPER TO ADJUDICAT E ON VALIDITY OF RE- OPENING. NONE OF THE JUDICIAL PRONOUNCEMENTS RELIED ON BY THE APPELLANT ARE SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. HOWEVER, THE PRINCIPLES WHICH EMANATE FROM THE DECISIONS RELIED ON BY THE APPELLANT AND VARIOUS OTHER DECISIONS ON VALIDITY OF RE-OPENI NG IS ENUMERATED AS UNDER: ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 10 A) THE AO HAS TO APPLY HIS MIND TO THE INFORMATION, IF ANY, COLLECTED AND MUST FORM A BELIEF THEREON BEFORE ISSUING ANY NOTIC E U/S 148. B) ASSESSING OFFICER HAS POWER TO REOPEN, PROVIDED THERE IS TANGIBLE MATERIAL / INFORMATION TO COME TO THE CONCLUSION TH AT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. C) THE ASSESSING OFFICER CANNOT PROCEED MECHANICALL Y AND ALSO ON ERRONEOUS INFORMATION THAT MAY HAVE BEEN SUPPLIED T O HIM. THE AO CANNOT MECHANICALLY ISSUE NOTICE U/S 148 OF THE ACT , WITHOUT COMING TO AN INDEPENDENT CONCLUSION THAT HE HAS REASON TO BELIEV E THAT THE INCOME HAS ESCAPED ASSESSMENT DURING THE AY IN QUESTION. D) THEREFORE, THERE SHOULD BE TANGIBLE MATERIAL / I NFORMATION BEFORE THE AO AND HE SHOULD ANALYSE IT BY APPLYING HIS MIND AN D THERE SHOULD BE A PROCESS IN HIS MIND BY WHICH HE SHOULD FORM A BELIE F AND COME TO AN INDEPENDENT CONCLUSION THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. E) REOPENING OF ASSESSMENT BASED ON SUSPICION, PRES UMPTION, CONJECTURES AND SURMISES IS NOT PERMISSIBLE IN LAW. F) AT THE TIME OF COMMENCEMENT OF THE ASSESSMENT PR OCEEDINGS, THE AO HAS TO SEE WHETHER THERE IS PRIMA FACIE MATERIAL. T HE SUFFICIENCY OF MATERIAL IS NOT RELEVANT. G) THE REPORT OF THE INVESTIGATION WING MIGHT CO NSTITUTE MATERIAL. THE DECISION TO REOPEN A CASE ON THE BASIS OF REPORT OF THE INVESTIGATION WING CANNOT ALWAYS BE CONDEMNED OR DUBBED AS A FISHING A ND ROVING INQUIRY. THE EXPRESSION ' REASONS TO BELIEVE ' APPEARING IN SECTION 147 SUGGESTS THAT IF THE AO ACTS AS A REASONABLE AND PRUDENT MAN ON THE BASIS OF INFORMATION SECURED BY HIM THAT THERE IS A CASE FOR REOPENING, THEN SECTION 147 CAN WELL BE PRESSED INTO SERVICE AND AS SESSMENT CAN BE REOPENED. H) IT IS NOT NECESSARY THAT THE AO SHOULD HOLD A QUASI-JUDICIAL ENQUIRY BEFORE ACTING U/S 147. IT IS ENOUGH IF HE ON THE IN FORMATION RECEIVED BELIEVED IN GOOD FAITH THAT INCOME HAS ESCAPED ASSE SSMENT. 30. NOW, IT IS TO BE ADJUDICATED AS TO WHETHER TH E AO HAS COMPLIED WITH BASIC JURISDICTIONAL REQUIREMENT UNDER THE LAW BEFO RE ISSUING NOTICE U/S 148 TO THE APPELLANT. IN THIS REGARD, THE APPELLANT HAS STATED THAT THE AO WAS NOT HAVING ANY INFORMATION/ TANGIBLE MATERIAL B EFORE HIM WARRANTING ISSUANCE OF THE NOTICE. THE AO HAD RECEIVED A REPOR T FROM THE ADIT (INV.), UNIT 3(1) ON 26/02/2018 AND THE NOTICE U/S 148 GIVEN BY THE AO ON 31/03/2018 WAS ONLY ON THE BASIS OF THAT REPORT. TH E REPORT WAS MAINLY AND ALMOST WHOLLY ABOUT M/S. ALTIUS FINSERVE PVT. L TD. AND CONTAINED ONLY FEW LINES ABOUT THE APPELLANT. A COPY OF REPORT OF THE ADIT WAS NOT MADE AVAILABLE TO THE APPELLANT. ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 11 30.1 I HAVE EXAMINED THE REASONS FOR RE-OPENIN G. THE RETURN OF THE APPELLANT WAS PROCESSED U/S 143(1} AND NO SCRUTINY ASSESSMENT U/S 143(3) HAD TAKEN PLACE EARLIER AND HENCE IT IS NOT A CASE OF CHANGE OF OPINION. SUBSEQUENTLY, THE CASE WAS RE-OPENED WHEN THE AO RECEIVED INFORMATION FROM ADIT(LNV.), UNIT-3(1), MUMBAI VIDE LETTER DATED 26/02/2018. THE AO HAS RECORDED HIS SATISFACTION AN D HOW HE HAS FORMED BELIEF ON INFORMATION FROM THE ADIT. THE REA SONS TO BELIEVE HAS BEEN REPRODUCED AT PAGE 2 OF THE ASSESSMENT ORDER W HICH HAS ALREADY BEEN COPIED IN THIS APPELLATE ORDER ALSO. THE FINDI NGS OF THE INVESTIGATION WING IS ALSO BEEN GIVEN AT PARA 7 OF THE ASSESSMENT ORDER. 30.2 ON PERUSAL OF REASONS FOR RE-OPENING, IT IS FOUND THAT THE ADIT (INV.) HAD CONDUCTED SURVEY ACTION AND SPOT VERIFIC ATION IN THE CASE OF M/S. ALTIUS FINSERVE PVT. LTD. AND NOTICED THAT THE SAID COMPANY WAS RECEIVING HIGH FEES/COMMISSION BUT SUBSTANTIALLY AL SO BOOKING CERTAIN EXPENSES WHICH WERE NON-GENUINE IN THE FORM OF COMM ISSION/REFERRAL FEES/CONSULTANCY FEES. THE ADIT HAD ALSO MENTIONED IN HIS LETTER THAT THE ASSESSEE'S PROPRIETARY CONCERN I.E. M/S. FINWIZ CON SULTANTS HAD RECEIVED AN AMOUNT OF RS.5.35 CRORE FROM ALTIUS FINSERVE PVT . LTD. AND HAS ALSO DEBITED AN AMOUNT OF RS.2.35 CRORE AS OTHER EXPENSE S IN HER P & L A/C. AND THE SAID AMOUNT INCLUDES RS.2.33 CRORES PAID TO ONE MR. DIPAN PATEL OF M/S AVRON'S CONSULTANCY SERVICES PVT. LTD. AND M /S SARVOTTAM ADVISORY PVT. LTD. FOR REFERRING ASSESSEE TO M/S. A LTIUS FINSERVE PVT. LTD. SINCE DURING THE COURSE OF SURVEY U/S. 133A AND SPO T VERIFICATION IT WAS ESTABLISHED THAT M/S. ALTIUS FINSERVE PVT. LTD. WAS GETTING SUBSTANTIALLY HIGH FEES/COMMISSIONS FROM ITS OPERATION AND TO RED UCE THE PROFIT BY INDULGING IN BOOKING NON-GENUINE EXPENSES, THE CLAI M OF THE ASSESSEE FOR AMOUNT DEBITED TO P & L A/C. FOR GETTING COMMISSION FROM M/S. ALTIUS FINSERVE PVT. LTD. SEEMS TO BE NON-GENUINE AS ALSO IT IS SEEM THAT NO SUCH DEBIT IS MADE IN A.Y. 2012-13. MOREOVER, IT IS EVIDENT FROM THE STATEMENT OF SHRI VISHWAS V. JOSHI, HUSBAND OF THE ASSESSEE AND PR. OFFICER OF M/S. FIN WIZ CONSULTANTS THAT M/S, FINWIZ CONSULTANTS, PROPRIETARY CONCERN OF SMT . JAEE VISHWAS JOSHI DID NOT TRANSACT ANY BUSINESS AND DID NOT PROVIDE A NY CONSULTANCY SERVICES TO M/S. ALTIUS FINSERVE PVT. LTD. HOWEVER, IT IS RECEIVED BROKERAGE FROM THEM FOR WHICH IT PAID FEES TO SHRI DIPAN PATEL OF M/S AVRON CONSULTANCY SERVICES PVT. LTD. AND M/S SARVOT TAM ADVISORY PVT. LTD. THIS IS COLOURABLE DEVICE TO BOOK BOGUS EXPENS ES BY ALTIUS FINSERVE PVT. LTD. IN WHICH THE ASSESSEE 30.3 THE AFORESAID FACTS COMMUNICATED BY THE INV ESTIGATION WING HAS BEEN REPRODUCED BY THE AO IN THE REASONS FOR REOPEN ING AND THEREAFTER THE AO HAS CLEARLY APPLIED HIS MIND ON THE SAID INF ORMATION AND CONCLUDED AS UNDER :- '5. FROM THE ABOVE IT IS CRYSTAL CLEAR THAT THE SUB -BROKING FEES PAID BY THE ASSESSEE FOR GETTING INCOME FROM M/S. ALTIUS FINSER VE PVT. LTD. AMOUNTING TO RS.2.33 CRORES IS NOT GENUINE AS APART FROM THE INCOME ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 12 FROM M/S. ALTIUS FINSERVE PVT. LTD., NO OTHER INCOM E IS SHOWN BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. 6. IN VIEW OF ABOVE NARRATED FACTS, I HAVE REASON S TO BELIEVE THAT INCOME CHARGEABLE TO TAX FOR A.Y. 2011-12 BEING RS.2.33 CR ORES HAS ESCAPED FROM ASSESSMENT. SINCE THE INCOME HAS ESCAPED FROM ASSESSMENT, NOTICE U/S. 148 OF THE I. T. ACT, 1961 IS REQUIRED TO BE ISSUED FOR THE ABOVE YEAR AND THE TIME LIMIT TO ISSUE SUCH NOTICE IS 31/ 03/2018.' 30.4 THUS, PERUSAL OF REASONS FOR REOPENING CLEARL Y REVEAL THAT THE A.O. HAS APPLIED HIS MIND ON THE INFORMATION RECEIVED FR OM THE ADIT AND HAS INCORPORATED HIS OWN VIEW IN THE LAST TWO PARAGRAPH S OF THE REASONS FOR REOPENING. THE AO HAS REFERRED TO THE ACCOUNTS OF T HE ASSESSEE AND NOTED THAT APART FROM INCOME FROM ALTIUS FINSERVE P VT. LTD., NO OTHER INCOME IS SHOWN BY THE ASSESSEE DURING THE YEAR UND ER CONSIDERATION. SO THIS IS THE OBSERVATION OF THE AO AND NOT THAT O F THE ADIT. 30.5 SO FAR THE INFORMATION RECEIVED FROM THE ADI T IS CONCERNED, THE SAID INFORMATION WAS VERY MUCH SPECIFIC, TANGIBLE A ND CONCRETE BASED ON SURVEY AND SPOT VERIFICATION IN CASE OF M/S. ALTIUS FINSERVE PVT. LTD. AND ALSO ON THE BASIS OF STATEMENT OF SHRI VISHWAS V. J OSHI, HUSBAND OF THE ASSESSEE AND PRINCIPAL OFFICER OF M/S. FINWIZ CONSU LTANTS, PROPRIETARY CONCERN OF ASSESSEE. NOT ONLY THAT, THE INVESTIGATI ON WING HAS ALSO CONDUCTED ENQUIRIES AND SPOT VERIFICATION IN CASE O F M/S AVRON CONSULTANCY SERVICES PVT. LTD. AND M/S SARVOTTAM AD VISORY PVT. LTD. WHICH ARE REPRODUCED IN PARA 7 OF THE ASSESSMENT OR DER AND FOUND THAT NONE OF THE TWO ENTITIES EVER OPERATED FROM THEIR A DDRESSES. EVEN THE DIRECTORS OF M/S SARVOTTAM ADVISORY PVT, LTD. COULD NOT BE LOCATED AND M/S AVRON CONSULTANCY SERVICES PVT. LTD. HAS SHOWN NEGLIGIBLE INCOME IN THE RELEVANT AY. 30.6 THE INFORMATION OF THE ADIT ALSO REVEALED TH AT THE CLAIM OF THE ASSESSEE FOR AMOUNT DEBITED TO PROFIT AND LOSS ACCO UNT FOR GETTING COMMISSION FROM M/S. ALTIUS FINSERVE PVT. LTD. SEEM S TO BE NON-GENUINE AS ALSO IT IS SEEN THAT NO SUCH DEBIT IS MADE IN AY 2011-13. OBVIOUSLY, THIS INFORMATION WAS ABOUT THE NON-GENUINE EXPENSE BOOKED BY THE APPELLANT. FURTHER, INVOLVEMENT OF DIPEN PATEL HAS ALSO BEEN MENTIONED IN THE INFORMATION ON BEHALF OF THE TWO COMPANIES W HICH ALSO INDICATES BOGUS NATURE OF TRANSACTIONS. NOT ONLY THAT THE STA TEMENT OF SHRI VISHWAS V. JOSHI WHO WAS PRINCIPAL OFFICER OF M/S. FINWIZ C ONSULTANTS ALSO HAS BEEN NOTED AND COMMUNICATED IN THE INFORMATION WHIC H ALSO INDICATE BOGUS NATURE OF TRANSACTIONS. 30.7 THEREFORE, IT IS FOUND THAT THE APPELLANT I S NOT CORRECT IN SAYING THAT THE SAID INFORMATION IS MAINLY RELATED TO M/S. ALTI US FINSERVE PVT. LTD. FOR THE REASON THAT THE APPELLANT WAS ALSO A PART OF SA ME CHAIN OF TRANSACTION AND EVEN THE PAYMENTS MADE BY THE ASSESSEE AMOUNTIN G TO RS.2.33 CRORES TO ONE MR. DIPAN PATEL OF M/S AVRON CONSULTA NCY SERVICES PVT. LTD. AND M/S.SARVOTTAM ADVISORY PVT. LTD. HAS ALSO BEEN CLEARLY MENTIONED IN THE SAID INFORMATION. THUS IT IS NOT A CASE THAT THE AO HAS ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 13 REOPENED THE ASSESSMENT BASED ON ABSOLUTELY VAGUE A ND UNSPECIFIED INFORMATION. THEREFORE, IT IS HELD THAT THE A.O. HAD CORRECTLY A RRIVED AT REASONS TO BELIEVE THAT EXPENSES OF RS.2.33 CRORES WERE PRIMA FACIE NOT GENUINE AFTER APPLYING HIS MIND AFTER EXAMINING THE RECORD OF THE APPELLANT AND ON EXAMINING THE INFORMATION OF T HE ADIT WHICH WAS BASED ON SURVEY/SPOT VERIFICATION OF M/S. ALTIU S FINSERVE PVT. LTD. AND STATEMENT OF SHRI VISHWAS V. JOSHI. IN VIE W OF ABOVE, THE RE-OPENING IS HELD AS LEGALLY VALID AND THE GROUND CHALLENGING ITS VALIDITY IS DISMISSED. 7. INSOFAR AS, MERITS IS CONCERNED, THE LD.CIT(A) O BSERVED THAT THE FACTS GATHERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS COUPLED WITH INFORMATION COLLECTED DURING SURVEY PR OCEEDINGS U/S 133A IN THE CASE OF M/S ALTIUS FINSERVE PVT.LTD. AN D STATEMENT OF ASSESSEE AND OTHER PERSONS CLEARLY INDICATES THAT T HE SO CALLED BUSINESS COUNSELING CHARGES HAS BEEN PAID TO TWO NO N EXISTING ENTITIES TO AVOID OR REDUCE TAX LIABILITIES. THE LD .CIT(A), FURTHER NOTED THAT ALTHOUGH, THE ASSESSEE CLAIMS TO JUSTIFY PAYME NT OF BUSINESS COUNSELING CHARGES TO M/S AVRONS CONSULTANCY SERVIC ES PVT.LTD. AND M/S.SARVOTTAM ADVISORY PVT.LTD IN LIGHT OF AFF IDAVIT OF SHRI DIPEN PATEL BUT, ON PERUSAL OF FACTS BROUGHT OUT BY THE L D. AO, IT IS CLEARLY EVIDENT THAT AFFIDAVIT FILED BY THE ASSESEE IS ONLY AN AFTERTHOUGHT AND TO CIRCUMVENT FINDINGS RECORDED BY THE LD. AO, IN L IGHT OF EVIDENCES COLLECTED DURING THE COURSE OF SURVEY PROCEEDINGS. HE, FURTHER NOTED THAT THE ENQUIRIES AND SPOT VERIFICATION DONE BY TH E INVESTIGATION WING REVEALS THAT M/S AVRONS CONSULTANCY SERVICES P VT.LTD AND M/S SARVOTTAM ADVISORY PVT.LTD. WAS NOT OPERATING FROM ANY OF ITS ADDRESS IN MUMBAI AND THE TWO DIRECTORS OF THIS SAI D COMPANY WERE NOT HAVING PROPER ADDRESS. FURTHER, EVEN ENQUIRIES CONDUCTED AFTER DIRECTIONS OF THE JCIT GIVEN U/S 144 CLEARLY REVEAL S THAT THOSE TWO COMPANIES ARE SHELL COMPANIES AND THE REPORT OF THE INSPECTOR CLEARLY BROUGHT OUT THE FACT THAT THOSE COMPANIES A RE NOT CARRYING OUT ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 14 ANY BUSINESS ACTIVITY IN THE GIVEN ADDRESS. EVEN, V ERIFICATION DONE THROUGH COMMISSIONS U/S 131(1)(D) OF THE I.T.ACT, 1 961 CLEARLY INDICATES THAT THE PARTIES ARE NOT AVAILABLE OR TRA CEABLE IN THE GIVEN ADDRESS. FROM THE ABOVE, IT IS VERY CLEAR THAT THE ASSESSEE HAS BOOKED BOGUS EXPENSES OF RS.2,33,35,000/- IN THE N AME OF TWO BOGUS CONCERNS, WHO HAD NO REAL EXISTENCE AND WHO D ID NOT RENDER ANY SERVICE TO THE ASSESSEE. ACCORDINGLY, HE OPINE D THAT THERE IS NO ERROR IN THE FINDINGS RECORDED BY THE LD. AO TO COM E TO THE CONCLUSION THAT EXPENDITURE INCURRED UNDER THE HEAD BUSINESS COUNSELING CHARGES IS NON GENUINE EXPENDITURE. THE RELEVANT FINDINGS OF THE LD.CIT(A) ARE AS UNDER:- 31. ON MERITS, IT WAS SUBMITTED BY THE APPELLANT T HAT THE RECEIPTS AND PAYMENTS SHOWN IN THE BOOKS OF A/CS. OF THE ASSESSE E ARE SUPPORTED BY TAX INVOICES. THE PAYMENTS HAVE BEEN MADE THROUGH B ANKING CHANNEL. SERVICE TAX AND PROVISIONS OF TDS ARE ALSO COMPLIED WITH. THE ASSESSEE VIDE HER SUBMISSION DATED 19/09/2018 HAD FURNISHED DETAILS OF SERVICES RENDERED BY THE TWO PARTIES TO THE A.O. APPELLANT M OVED AN APPLICATION U/S. 144A BEFORE JCIT WHO DID NOT TOUCH THE ISSUE O F JURISDICTION. IT WAS CLAIMED BY THE APPELLANT THAT THE INVESTIGATION OF TRANSACTION TOOK PLACE AFTER A GAP OF SEVEN YEARS AND IN SUCH A LONG PERIO D MANY THINGS CAN CHANGED. SMT. KAVITA PATEL, WIFE OF SHRI DIPAN PATE L CEASED TO BE DIRECTOR OF THE COMPANIES W.E.F. 16.12.2012 AND SHR I DIPEN PATEL ALSO CEASED TO BE THE PRINCIPAL OFFICER OF THE COMPANIES AT THE SAME TIME. 31.1 THE AFORESAID CONTENTION OF THE APP ELLANT IS WITHOUT ANY MERITS. IN ANY ARRANGEMENT EVEN IN THE CASE OF ACCOMMODATION ENTRIES, ALL THE PAPER FORMALITIES ARE COMPLETED. T HE TAX IS DEDUCTED AND PAYMENTS ARE MADE THROUGH BANK. BUT IT IS SETTLED T HAT MERELY PAPER FORMALITIES ARE NOT SUFFICIENT PROOF PARTICULARLY I N THE FACTS OF THE PRESENT CASE WHERE THE TWO COMPANIES TO WHOM HUGE PAYMENTS WERE MADE WERE NOT FOUND TRACEABLE AND THEIR EXISTENCE, THEIR PRES ENCE, THEIR INFRASTRUCTURE, THE SERVICES RENDERED BY THEM ARE N OT PROVED AT ALL. 31.2 THE ROLE OF DIPAN PATEL IN THE ENTIRE TRANSACT IONS IS OBVIOUS. SHRI DIPAN PATEL IS A C.A. AND HAD DECLARED THE ADDRESS OF 704, SAIRATH CHS KESAR KUNJ BUILDING, TELLY GULLY CROSS LANES, ANDHE RI (E) AS HIS RESIDENTIAL ADDRESS WHICH WAS ALSO THE BILLING ADDR ESS OF THE TWO CONCERNS. HIS WIFE SMT. KAVITA PATEL HAS BEEN CLAIM ED TO BE ONE OF THE DIRECTORS IN THE TWO COMPANIES WHO CEASED TO BE DIR ECTOR W.E.F. 16.12.2012, AS PER ASSESSEE, SHRI DIPEN PATEL ALSO CEASED TO BE PRINCIPAL DIRECTOR OF THE COMPANIES AT THE SAME TIM E. THUS , SHRI DIPEN PATEL ALLOWED HIS RESIDENTIAL ADDRESS TO BE USED FO R THE ADDRESS OF THE TWO COMPANIES. SUCH TYPE OF ARRANGEMENT CLEARLY PRO VE THAT THE TWO ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 15 COMPANIES WERE CONTROLLED AND OPERATED BY DIPAN PAT EL FOR PROVIDING ACCOMMODATION ENTRIES AS THE FIELD ENQUIRY REVEALED THAT THE TWO COMPANIES NEVER OPERATED FROM THEIR STATED ADDRESSE ES I.E. THE SAME AS RESIDENTIAL ADDRESS OF DIPAN PATEL OR THE RESIDENTI AL FLAT WHICH WAS FREQUENTLY VISITED BY SHRI DIPEN PATEL. 32. THE APPELLANT HAS ENCLOSED A LETTER DATED 20.11 .2011 WHEREIN IT WAS MENTIONED THAT THE ASSESSEE APPROACHED THE TWO PART IES AND OBTAINED LETTERS FROM THEM THAT THE AMOUNT PAID WAS ACCOUNTE D BY THEM ALONG WITH THEIR BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND TH E LEDGER ACCOUNTS OF THE ASSESSEE. THE APPELLANT ALSO DOWNLOADED COMPANY MASTER DATA FROM ROC ON 01/01/2019 AND STATED THAT THE NAME OF AVRON 'S CONSULATANCY SERVICES PVT. LTD. WAS CHANGED TO CLIENT BRIGHT CON SULTANTS PVT. LTD. AND THE LAST BALANCE SHEET FILED BY THE COMPANY WITH RO C WAS 31,3.2015 AND IN SOME YEAR THEREAFTER, THE COMPANY WAS TRUCK OFF FROM THE RECORDS OF ROC. SO WHEN ADIT CARRIED OUT INVESTIGATION, THE CO MPANY APPEARS TO BE NON- FUNCTIONAL AS PER RECORD OF THE ROC. THE MASTER DATA FURTHER REVEALS THAT SARVOTTAM ADVI SORY PVT. LTD. WAS ACTIVE WITH THE REGISTERED ADDRESS AT SHOP NO. 1 ,L ALWANI BHAWAN, OPP. KASTURBA HOSPITAL, SANE GURUJI ROAD, SATRASTA, MAHA LAXMI, MUMBAI- 400011. 32.1 ON CONSIDERING THE ABOVE CONTENTION OF THE APP ELLANT, IT IS APPARENT THAT CLAIM OF THE APPELLANT IS CONTRADICTORY. ON TH E BASIS OF ROC DATA DOWNLOADED ON 01/01/2019, THE APPELLANT CLAIMS THAT THE COMPANY APPEARS TO HAVE NON-FUNCTIONAL WHEN THE ADIT CONDUC TED INVESTIGATION. ON THE OTHER HAND, IN HIS LETTER DATED 20.11.2018 F ILED BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE MEN TIONS THAT SHE APPROACHED THE TWO PARTIES AND OBTAINED LETTERS FRO M THEM THAT THE AMOUNT PAID WAS ACCOUNTED BY THEM ALONG WITH THEIR BALANCE SHEET, PROFIT AND LOSS ACCOUNT AND THE LEDGER ACCOUNTS OF THE ASSESSEE. IT IS NOT UNDERSTOOD AS TO HOW THE ASSESSEE IS ABLE TO HAVE C ONTACT WITH THE SAID COMPANY WHEN THE COMPANY WAS NON-FUNCTIONAL FOR A L ONG PERIOD. IF THE ASSESSEE COULD CONTACT AVRON'S CONSULATANCY SERVICE S PVT. LTD. [CLIENT BRIGHT CONSULTANTS PVT. LTD.] IN THE YEAR 2018 WHY NOT THE ADIT OR AO COULD CONTACT THE SAID COMPANY IN THE SAME PERIOD. IN FACT THE FIELD ENQUIRIES REVEALED THAT THE TWO COMPANIES WERE NEVE R OPERATIONAL FROM ANY OF THE ADDRESSES. FURTHER, THE FIELD ENQUIRIES ON THE ADDRESS MENTION ED IN ROC DATA IN CASE OF SARVOTTAM ADVISORY PVT. LTD. WAS ALSO CONDU CTED AND IT WAS FOUND THAT THE SAID COMPANY NEVER OPERATED FROM THE SAID ADDRESS. 33. SO FAR STATEMENT OF THE APPELLANT IS CONCERNE D, IT HAS BEEN CONTENDED THAT SHE GAVE CORRECT ANSWERS TO QUESTION S PUT TO HER AND SHE WAS CONDUCTING HER PROPRIETARY BUSINESS THROUGH MR. VISHWAS JOSHI, PRINCIPAL OFFICER OF M/S. FINWIZ CONSULTANTS. THE A O SHOULD HAVE RECORDED STATEMENT OF MR. VISHWAS JOSHI WHICH THE A SSESSEE HAD REQUESTED THE AO TO DO. AFFIDAVIT OF MR. VISHWAS JO SHI DATED 17,12.2018 HAS BEEN FILED. ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 16 33.1 ON THE AFORESAID CLAIM OF THE APPELLANT, IT IS FOUND THAT MRS. JAEE VISHWAS JOSHI IN HER STATEMENT U/S 131 DATED 26.11. 2018 MADE AN EFFORT TO ANSWER VARIOUS QUESTIONS. SHE CLAIMED THAT MR. D IPAN PATEL REPRESENTED M/S. SARVOTTAM ADVISORY PVT. LTD AND AV RON'S CONSULTANCY SERVICES PVT. LTD. AND INTRODUCED FINWIZ CONSULTANT S TO ALTIUS FINSERVE PVT. LTD. SHE ALSO STATED THAT THEY HAVE RENDERED S ERVICES OF ARRANGING LOAN FACILITIES FOR CORPORATES LIKE DLF, ERA INFRA ENGG. LTD. ,AMTEK AUTO LTD. BUT WHEN SHE WAS ASKED TO PROVIDE NAMES OF DIR ECTORS OF THE TWO COMPANIES, SHE COULD NOT ANSWER AND STATED THAT THE PRINCIPAL OFFICER OF M/S. FINWIZ CONSULTANTS MR. VISHWAS JOSHI MAY BE AB LE TO ANSWER THIS QUESTION. WHEN A FURTHER QUESTION AS TO WHETHER ANY AGREEMENT WAS THERE FOR RECEIVING OR PAYING BROKERAGE /COMMISSION OR CONSULTANCY, SHE AGAIN COULD NOT ANSWER ANYTHING AND AGAIN STATED TH AT PRINCIPAL OFFICER OF M/S. FINWIZ CONSULTANTS MR. VISHWAS JOSHI MAY BE AB LE TO ANSWER THIS QUESTION. 33.2 ON PERUSAL OF STATEMENT OF APPELLANT, IT IS APPARENT THAT SHE COULD NOT ANSWER ALL THE QUESTIONS. SHE WAS NOT AWARE ABO UT THE DIRECTORS OF THE TWO COMPANIES I.E. M/S. SARVOTTAM ADVISORY PVT. LTD AND AVRON'S CONSULTANCY SERVICES PVT. LTD. AND SHE WAS NOT AWAR E AS TO ANY AGREEMENT WAS SIGNED FOR RECEIVING OR PAYING BROKER AGE/COMMISSION OR CONSULTANCY. SO KNOWING A PART OF THE MATTER AND NO T KNOWING SALIENT POINTS OF THE WHOLE ISSUE CLEARLY ESTABLISH THE TRU TH THAT M/S. SARVOTTAM ADVISORY PVT. LTD AND AVRON'S CONSULTANCY SERVICES PVT. LTD. DID NOT RENDER ANY SERVICES TO THE APPELLANT. THE AFFIDAVIT OF MR. VISHWAS JOSHI IS DATED 17.12.2018 AND DOES NOT SEEM TO HAVE BEEN FIL ED BEFORE THE AO WHO PASSED ASSESSMENT ORDER ON 27.12.2018. IN THE A FORESAID AFFIDAVIT, IT IS MENTIONED THAT BOTH M/S. SARVOTTAM ADVISORY PVT. LTD AND AVRON'S CONSULTANCY SERVICES PVT. LTD. HAVE ACCOUNTED FOR T HE SUB-BROKERAGE PAYMENTS AS INCOME IN THEIR TAX RETURNS FOR AY 2011 -12 AND HAVE ALSO CONFIRMED THE ABOVE TRANSACTIONS. THIS AFFIDAVIT IS OF NO HELP TO THE ASSESSEE FOR THE REASON THAT M/S. SARVOTTAM ADVISOR Y PVT LTD AND AVRON'S CONSULTANCY SERVICES PVT. LTD. COULD NEVER BE LOCATED AT THEIR ADDRESSES IN SPITE OF SEVERAL ROUNDS OF EFFORTS MAD E AND NO RESPONSE OR CONFIRMATIONS WERE EVER FILED BY THEM. 34. ON STATEMENT OF DIPAN PATEL, IT HAS BEEN SUBMIT TED BY THE APPELLANT THAT AFFIDAVIT OF DIPEN PATEL WAS DATED 27/07/2018 AND WAS FILED WITH AO ON 19 TH SEPTEMBER , 2018 BUT AO SUMMONED HIM AFTER 3 MONTHS ON 19/12/2018 AND HIS STATEMENT WAS RECORDED ON 21/12/ 2018 AT A MERE 1 DAY'S NOTICE. 34.1 IT IS FOUND THAT IN HIS AFFIDAVIT, SHRI DIP AN PATEL HAS STATED THAT DURING AY 2010- 11 AND AY 2011-12, HE WAS REPRESENT ING M/S. SARVOTTAM ADVISORY PVT. LTD AND AVRON'S CONSULTANCY SERVICES PVT. LTD. AND AUTHORIZED TO TRANSACT BUSINESS ON BEHALF OF TH ESE COMPANIES. BUT WHEN HIS STATEMENT WAS RECORDED BY THE AO ON 21/12/ 2018, SHRI DIPAN PATEL STATED THAT HE WAS NOT HAVING NOW THE CONTACT DETAILS OF M/S. SARVOTTAM ADVISORY PVT. LTD AND AVRON'S CONSULTANCY SERVICES PVT. LTD. HE FURTHER STATED THAT CURRENTLY HE WAS NOT EXACTLY AWARE OF THE ADDRESS OF THE COMPANIES OR RESIDENTIAL ADDRESSES OF THE DI RECTORS OF THE SAID TWO ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 17 COMPANIES. HE ALSO STATED THAT THERE WAS NO FORMAL AGREEMENT BUT THERE WERE SEVERAL EMAILS AND OTHER COMMUNICATION WITH BO TH THE PARTIES. BUT HE DID NOT FILE ANY SUCH EMAILS OR COMMUNICATIONS E VEN TILL DATE OF PASSING THE ASSESSMENT ORDER. FURTHER, THERE WAS NO BASIS OR EVIDENCE FILED BY HIM TO PROVE THAT HE WAS AUTHORIZED TO TRA NSACT BUSINESS ON BEHALF OF THE TWO COMPANIES IN AY 2010-11 AND AY 20 11-12. FURTHER, IT IS FOUND STRANGE THAT IN HIS AFFIDAVIT DATED 27/07/201 8, HOW SHRI DIPAN PATEL REMEMBERS AND CONFIRMS THE RECEIPTS BY M/S, SARVOTT AM ADVISORY PVT. LTD AND AVRON'S CONSULATANCY SERVICES PVT. LTD. ALO NG WITH THE CHEQUE DATE AND AMOUNT LIKE CHEQUE ON 30 TH JUNE 2010 RS. 99,27,000/- PLUS TDS CREDIT OF RS. 11,03,0007- IN CASE OF M/S, SARVO TTAM ADVISORY PVT, LTD AND CHEQUE ON 8 TH JULY 2010 RS, 132.37.654/- PLUS TDS CREDIT OF RS. 14,70,8507- IN CASE OF AVRON'S CONSULTANCY SERVICES PVT. LTD. WHEN HE WAS NOT HAVING ANY CONTACT WITH THE AFORESAID TWO C OMPANIES. IT WAS HIS ONUS TO TELL ABOUT THE CURRENT WHEREABOUTS OF THE T WO COMPANIES OR THEIR DIRECTORS AND SUCH AFFIDAVITS HAS NO MEANING AS THE TWO COMPANIES OR THEIR DIRECTORS COULD NOT BE TRACED DURING SEVERAL ROUNDS OF ENQUIRIES ATTEMPTED BY THE AO. 35. THE ENQUIRIES AND SPOT VERIFICATION DONE BY THE INVESTIGATION WING REVEALS THAT F ONLY A NEGLIGIBLE PROFIT OF RS. 2.30 LAKHS WAS SHOWN BY AVRON CONSULTANCY PVT. LTD. < DURING THE RELEV ANT YEAR AND THE SAID COMPANY HAD NEVER BEEN OPERATED AND ALSO PRESENTLY NOT OPERATING FROM ANY OF THE ADDRESSES OF MUMBAI OR KOLKATA. 36. THE ENQUIRIES AND SPOT VERIFICATION DONE BY THE INVESTIGATION WING REVEALED THAT SARVOTTAM ADVISORY PVT. LTD. WAS NOT OPERATING FROM ANY OF ITS ADDRESSES IN MUMBAI. THE TWO DIRECTORS OF THE S AID COMPANY WERE NOT HAVING PROPER VERIFIABLE ADDRESS. 37. NO DETAILS WERE PROVIDED TO THE A.O. OR DUR ING THE APPELLATE PROCEEDINGS AS TO WHAT SERVICES HAVE BEEN PROVIDED BY THE ENTITIES TO THE ASSESSEE, DOCUMENTARY EVIDENCE IN SUPPORT OF SERVIC ES RENDERED AND ANY CORRESPONDENCE BETWEEN THESE TWO ENTITIES AND T HE ASSESSEE. 38. NOTICE U/S. 133(6) ISSUED TO AVRON CONSULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. WERE UNSERVED AND RETU RNED BY THE POSTAL AUTHORITIES. THE ASSESSEE WAS ALSO INFORMED THAT TH E NOTICES U/S. 133(6) WERE RETURNED BACK, IN SPITE OF THE SAME THE APPELL ANT CHOSE TO REMAIN SILENT ABOUT THEIR WHEREABOUTS. 39. AFTER THE JCIT GAVE DIRECTION U/S 144A TO CARR Y OUT FURTHER INVESTIGATION, NOTICE U/S. 133(6) WERE AGAIN ISSUED TO AVRON CONSULTANCY SERVICES PVT. LTD. (KOLKATA) & SARVOTTAM ADVISORY P VT. LTD. (MUMBAI) WHICH RETURNED UNSERVED IN RESPECT OF AVRON CONSULT ANCY SERVICES PVT. LTD. WITH A COMMENT INSUFFICIENT ADDRESS. IN CASE O F SARVOTTAM ADVISORY PVT. LTD., THE INSPECTOR REPORTED THAT NO OFFICE/BU SINESS WAS CARRIED OUT FROM THE SAID ADDRESS WHICH IS A RESIDENTIAL FLAT A ND SHRI DIPAN PATEL GENERALLY VISITS THE FLAT WHICH REMAINS JOCK OTHERW ISE. ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 18 40. COMMISSIONS U/S. 131(1)(D) OF THE IT. ACT WAS I SSUED TO THE ACIT CIR. 6(2), KOLKATA BUT HIS SUMMONS IN CASE OF AVRON CONS ULTANCY SERVICES PVT. LTD COULD NOT BE SERVED AND THE INSPECTOR ON F IELD VERIFICATION GAVE A REPORT THAT HE COULD NOT FIND ANY SUCH COMPANY IN T HE STATED ADDRESS. 41. SUMMONS U/S. 131 WAS ISSUED TO M/S. SARVOTTAM A DVISORY PVT. LTD, AT THEIR KNOWN ADDRESS 704, SAIRATH CHS, KESAR KUNJ BU ILDING, TELLY GULLY, CROSS LANE, ANDHERI (E), MUMBAI-69. THIS TIME THE S UMMON WAS RECEIVED BY A PERSON SITTING IN THE PREMISES CLAIMI NG HIS NAME AS CHINTAN SHAH BUT SARVOTTAM ADVISORY PVT. LTD. DID NOT RESPO ND THE SUMMONS EVEN TILL DATE OF PASSING THE ASSESSMENT ORDER. 42. NOTICE U/S. 133(6) DATED 18/12/2018 WERE AG AIN ISSUED TO THE PR. OFFICER OF M/S. CLIENT BRIGHT CONSULTANTS PVT. LTD. (FORMERLY KNOWN AS M/S, AVRON CONSULTANCY SERVICES PVT. LTD.) AT THEIR ADDRESS 4A, COUNCIL HOUSE ESTATE, KOLKATA -1. THIS NOTICE HAS ALSO BEEN RECEIVED BACK AS UNSERVED. 43. IN VIEW OF AFORESAID DISCUSSIONS, IT IS HEL D THAT THE APPELLANT HAS BOOKED BOGUS EXPENSES OF RS. 2,33,35,000/- IN T HE NAME OF TWO BOGUS CONCERNS NAMELY M/S AVRON'S CONSULTANCY SERVI CES PVT. LTD. AND M/S SARVOTTAM ADVISORY PVT. LTD. WHO HAD NO REA L EXISTENCE AND WHO DID NOT RENDER ANY SERVICE TO THE ASSESSEE. THI S WAS DONE BY THE ASSESSEE TO REDUCE ITS TAXABLE INCOME AND HENCE THE DISALLOWANCE OF THE EXPENSES OF RS. 2,33,35,000/- M ADE BY THE AO IS CONFIRMED. ALL THE GROUNDS ON MERITS ARE DISMISSED. 8. THE FIRST ISSUE THAT CAME UP FOR OUR CONSIDERATI ON FROM GROUND NO.1 & 2 OF ASSESSEES APPEAL IS VALIDITY OF REOPEN ING OF ASSESSMENT. THE LD. AR FOR THE ASSESSEE SUBMITTED T HAT REOPENING OF ASSESSMENT IS BAD IN LAW AND LIABLE TO BE QUASHE D, BECAUSE REASONS RECORDED FOR REOPENING OF ASSESSMENT IS INV ALID AND COMPLETELY CONTRARY TO FACTS, WHICH IS EVIDENT FROM THE FACT THAT IN THE ASSESSMENT OF M/S ALTIUS FINSERVE SERVICES PVT.LTD. PAYMENTS TO M/S FINWIZ CONSULTANTS ALLOWED AS GENUINE AND SHRI VISHWAS JOSHI IN HIS STATEMENT HAVE GIVEN DETAILS OF TRANSACTIONS AND NOT DENIED TRANSACTIONS. THE LD. AR, FURTHER SUBMITTED THAT TH ERE IS NO NEXUS BETWEEN REASONS RECORDED FOR REOPENING OF ASSESSMEN T AND ESCAPEMENT OF INCOME, WHICH IS EVIDENT FROM THE FAC T THAT THE ASSESSEE HAS FILED NECESSARY EVIDENCES TO PROVE THA T TRANSACTIONS ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 19 WITH THOSE PARTIES ARE GENUINE AND IN THE STATEMENT RECORDED, THE CHIEF OPERATING OFFICER OF THE COMPANY HAS CLEARLY STATED THAT PAYMENT HAS BEEN MADE FOR SERVICES RENDERED IN CONN ECTION WITH THE LOAN PROPOSALS OF CERTAIN CLIENTS. THE LD. AR, FURTHER SUBMITTED THAT IF YOU GO THROUGH THE REASONS RECORDED FOR REO PENING OF ASSESSMENT, IT IS CLEARLY EVIDENT THAT THE LD. AO H AS MECHANICALLY REOPENED ASSESSMENT, ON THE BASIS OF INFORMATION RE CEIVED FROM INVESTIGATION WING WITHOUT ANY INDEPENDENT APPLICAT ION OF MIND TO FORM A REASONABLE BELIEF OF ESCAPEMENT OF INCOME, W HICH IS EVIDENT FROM THE FACT THAT IN THE REASONS, THE LD. AO HAS M ADE ONLY ALLEGATIONS WITHOUT ANY SUBSTANTIVE BASIS OR MATERI AL IN POSSESSION OF THE LD. AO. IN THIS REGARD, SHE HAD RELIED UPON VARIOUS JUDICIAL PRECEDENTS, INCLUDING THE DECISION OF HONBLE BOMBA Y HIGH COURT IN THE CASE OF ANKITHA CHOKSI VS ITO (2009) (411 ITR 2 07). THE ASSESSEE HAS ALSO RELIED UPON THE FOLLOWING JUDICIA L PRECEDENTS:- I) PRASHANTH S.JOSHI VS CIT (2010) (324 ITR 154) II) PLUS PAPER FOOD PACK LTD. VS ITO (2015) (374 IT R 485) (BOM.) III) ACIT VS DHARIYA CONSTRUCTION COMPANY (SUPREME COURT) IV) CIT (DELHI) VS KELVINATOR OF INDIA (SC) V) AKSHAR BUILDERS VS ACIT,28(1), DATED 17/01/2019 (BOM.) VI) PR.CIT VS G &G PHARMA LTD., DATED 08/10/2015 (D ELHI HIGH COURT) VII) CHHUGAMAL RAJPAL VS. SP CHALIHA (1971) 79 ITR 603 VIII) ACITVS DHARIYA CONSTRUCTION CO. (2010) 328 IT R 515 IX) GERMAN REMEDIES VS DY.CIT, DATED 10/10/2015 (BO MBAY HIGH COURT) 9. AS REGARDS, ADDITIONS MADE TOWARDS DISALLOWANCES OF BUSINESS COUNSELING CHARGES, THE LD. AR FOR THE ASSESSEE SUB MITTED THAT THE ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 20 ASSESSEE HAS FILED COMPLETE DETAILS OF EXPENDITURE, INCLUDING PROOF OF SERVICES RENDERED BY THE PARTIES TO PROVE THAT E XPENDITURE IS GENUINE, WHICH IS INCURRED WHOLLY AND EXCLUSIVELY F OR THE PURPOSE OF BUSINESS OF THE ASSESSEE. THE LD. AR, FURTHER SUBMI TTED THAT TRANSACTIONS OF THE ASSESSEE WITH M/S ALTIUS FINSER VE PVT.LTD AND M/S. SARVOTTAM ADVISORY PVT.LTD. WERE ACCEPTED AS G ENUINE IN THE IMMEDIATELY PRECEDING ASSESSMENT YEARS WITHOUT ANY ADVERSE INFERENCE, HOWEVER DURING THE YEAR WITHOUT ANY CHAN GES IN FACTS, THE LD. AO HAS MADE A ALLEGATIONS THAT EXPENDITURE INCU RRED IN THE NAME OF ABOVE TWO COMPANIES IS A BOGUS EXPENDITURE CREATED TO REDUCE PROFIT OF THE YEAR, IGNORING FACT THAT THE A SSESSEE HAS FILED COMPLETE DETAILS, INCLUDING BILLS ISSUED BY THE PAR TIES FOR HAVING RENDERED SERVICES, PAYMENT AGAINST BILLS BY CHEQUE AFTER DEDUCTING NECESSARY TDS APPLICABLE AS PER LAW. THE LD. AO HAS ALSO SUMMARILY REJECTED ADDITIONAL EVIDENCES FILED BY TH E ASSESEE IN FORM OF AFFIDAVIT OF SHRI DIPEN PATEL, WHERE HE HAS CATE GORICALLY ADMITTED THE FACT OF HAVING RENDERED SERVICES TO THE ASSESSE E AND ALSO, ACCOUNTED RECEIPT OF AMOUNT FROM THE ASSESEE IN THE BOOKS OF M/S AVRONS CONSULTANCY SERVICES PVT.LTD. AND M/S.SARVOT TAM ADVISORY PVT.LTD. THE LD. AO HAS ALSO REJECTED AFFIDAVIT FIL ED BY SHRI VISHWAS JOSHI, THE CHIEF OPERATING OFFICER OF THE COMPANY, WHERE HE HAS ADMITTED THE FACT THAT FEES HAS BEEN PAID TO THOSE COMPANIES FOR RENDERING SERVICES IN CONNECTION WITH LOAN PROPOSAL S. THE LD. AO HAS REJECTED ALL EVIDENCES FILED BY THE ASSESSEE ON LY ON THE BASIS OF REPORT OF INVESTIGATION WING AND FOR THE SIMPLE REA SONS THAT THE PARTIES WERE NOT RESPONDED TO VARIOUS NOTICES ISSUE D DURING THE COURSE OF ASSESSMENT PROCEEDINGS, WITHOUT APPRECIAT ING THE FACT THAT THE TRANSACTIONS WAS DONE ALMOST SEVEN YEARS BACK A ND ASSESSEE CANNOT KEEP TRACK OF THE PERSONS, WHO RENDERED SERV ICES. ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 21 10. THE LD. DR, ON THE OTHER HAND STRONGLY SUPPORTI NG ORDER OF THE LD.CIT(A) SUBMITTED THAT THE LD.CIT(A) HAS APPRAISE D FACTS IN RIGHT PERSPECTIVE AND CAME TO THE CONCLUSION THAT REOPENI NG OF ASSESSMENT IS ON SOUND FOOTING, WHICH IS BASED ON F RESH TANGIBLE MATERIAL. THEREFORE, THERE IS NO MERIT IN ARGUMENTS OF THE ASSESSEE THAT THE LD. AO HAS FORMED REASONABLE BELIEF OF ESC APEMENT OF INCOME ON THE BASIS OF INFORMATION RECEIVED FROM IN VESTIGATION WING WITHOUT APPLICATION OF MIND. IN THIS REGARD, THE LD . DR RELIED UPON BY THE DECISION OF HONBLE SUPREME COURT, IN THE CASE OF ACIT VS RAJESH JHAVERI STOCK BROKERS PVT.LTD. (2007) 291 IT R 500 AND RAYMOND WOOLLEN MILLS LTD. VS ITO 236 IR 34. AS REG ARDS, ADDITIONS TOWARDS DISALLOWANCES OF BUSINESS COUNSELING CHARGE S, THE LD. DR SUBMITTED THAT FACTS BROUGHT OUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, COUPLED WITH INVESTIGATION CARRIED OUT DURING SURVEY PROCEEDINGS U/S 133A OF THE ACT, IN THE CASE OF M/S ALTIUS FINSERVE PVT.LTD. CLEARLY INDICATES BOOKING BOGUS EXPENDIT URES IN THE NAME OF TWO NON EXISTING ENTITIES AND HENCE, THE LD. AO, AS WELL AS THE LD.CIT(A) WERE RIGHT IN MAKING ADDITIONS TOWARDS DI SALLOWANCES OF EXPENDITURE INCURRED UNDER THE HEAD BUSINESS COUNSE LING CHARGES. 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIE S BELOW ALONG WITH VARIOUS CASE LAWS CITED BY BOTH THE PARTIES. A S REGARDS, REOPENING OF ASSESSMENT, WE FIND NO MERITS IN THE A RGUMENTS ADVANCED BY THE LD. AR FOR THE ASSESEE, BECAUSE THE LD. AO HAS REOPENED THE ASSESSMENT ON SOUND FOOTING, WHICH IS BASED ON FRESH TANGIBLE MATERIAL COME TO HIS POSSESSION IN THE FOR M OF INFORMATION OF INVESTIGATION WING, WHICH SUGGEST ESCAPEMENT OF INC OME WITHIN THE ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 22 MEANING OF SECTION 147 OF THE I.T.ACT, 1961. WE, FU RTHER NOTED THAT THERE IS A NEXUS BETWEEN REASONS RECORDED FOR REOPE NING OF ASSESSMENT AND ESCAPEMENT OF INCOME, WHICH IS CLEAR LY EVIDENT FROM REASONS RECORDED FOR REOPENING OF ASSESSMENT, WHERE THE LD. AO HAS BROUGHT OUT CLEAR FACTS WITH REFERENCE TO IN FORMATION RECEIVED FROM INVESTIGATION WING, THE ESCAPEMENT OF INCOME O N ACCOUNT OF BOOKING EXPENDITURE IN THE NAME OF TWO NON EXISTING ENTITIES. FURTHER, THE ASSESSMENT IN THIS CASE WAS REOPENED B EYOND FOUR YEARS, BUT WITHIN SIX YEARS FROM THE END OF THE REL EVANT ASSESSMENT YEAR. THE ORIGINAL ASSESSMENT HAS BEEN COMPLETED U/ S 143(1) OF THE ACT. FURTHER, WHEN ORIGINAL ASSESSMENT HAS BEEN COM PLETED U/S 143(1) OF THE ACT, THEN THE ASSESSMENT CAN BE REOPE NED WITHIN A PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT AS SESSMENT YEAR, IF ESCAPEMENT OF INCOME IS WITHIN SPECIFIED LIMIT. IN THIS CASE, THERE IS NO DOUBT WITH REGARD TO ESCAPEMENT OF INCOME AS PER REASONS RECORDED BY THE LD. AO, WHICH IS BEYOND THE PRESCRI BED LIMIT PROVIDED UNDER THE ACT. ONCE, ORIGINAL ASSESSMENT W AS COMPLETED U/S 143(1) OF THE ACT, THEN REOPENING OF ASSESSMENT CAN BE MADE ON THE BASIS OF REASONS TO BELIEVE THAT PRIMA-FACIE TH ERE IS ESCAPEMENT OF INCOME. THIS PRINCIPLE IS SUPPORTED BY THE DECIS ION OF HONBLE SUPREME COURT, IN THE CASE OF ACIT VS RAJESH JHAVER I STOCK BROKERS PVT.LTD.(SUPRA), WHERE IT WAS CLEARLY HELD THAT REASONS TO BELIEVE DOES NOT MEAN THAT THE REASONS FOR REOPENIN G SHOULD HAVE BEEN FACTUALLY ASCERTAINED BY LEGAL EVIDENCE OR CON CLUSION BEFORE THE REOPENING OF ASSESSMENT. WE, FURTHER NOTED THAT THE HONBLE SUPREME COURT, IN THE CASE OF RAYMOND WOOLLEN MILLS LTD. VS ITO(SUPRA) HAD HELD THAT FOR DETERMINING, WHETHER I NITIATION OF REOPENING PROCEEDINGS WAS VALID, IT HAS ONLY TO BE SEEN, WHETHER THERE WAS PRIMA-FACIE SOME MATERIAL ON THE BASIS OF WHICH THE ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 23 DEPARTMENT WOULD REOPEN THE CASE. IT WAS FURTHER H ELD THAT THE SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THE STAGE OF ISSUE OF NOTICE. IN THIS CASE, ON PERUSAL OF REASONS RECORDED FOR REOPENING OF ASSESSMENT, WE FI ND THAT THERE IS A CLEAR NEXUS BETWEEN REASONS RECORDED FOR REOPENIN G OF ASSESSMENT AND ESCAPEMENT OF INCOME AND SUCH REASON S ARE BASED ON FRESH TANGIBLE MATERIAL IN THE FORM OF REP ORT OF INVESTIGATION WING. IN OUR CONSIDERED VIEW, THE REPORT OF THE INV ESTIGATION WING MIGHT CONSTITUTE TANGIBLE MATERIAL. THE DECISION TO REOPEN A CASE ON THE BASIS OF REPORT OF THE INVESTIGATION WING CANNO T ALWAYS BE CONDEMNED OR DUBBED AS FISHING AND ROVING INQUIRY. THE EXPRESSION REASONS TO BELIEVE APPEARING IN SECTION 147 SUGGES T THAT IF THE LD. AO ACTS AS A REASONABLE AND PRUDENT MAN ON THE BASI S OF INFORMATION SECURED BY HIM THAT THERE IS A CASE OF REOPENING, THEN SECTION 147 CAN WELL BE PRESSED INTO SERVICE AND AS SESSMENT CAN BE REOPEN. 12. COMING BACK TO PLETHORA OF DECISIONS CITED BY THE LD. AR. THE LD. AR FOR THE ASSESSEE HAS CITED VARIOUS DECISIONS IN SUPPORT OF HER ARGUMENTS. WE HAVE GONE THROUGH THE CASE LAWS RELIE D UPON BY THE LD. AR FOR THE ASSESSEE AND FIND THAT NONE OF THE J UDICIAL PRONOUNCEMENTS ARE SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE. NO DOUBT, THE PRINCIPLES, WHICH EMANATES FROM THE DECISIONS ON VALIDITY OF REOPENING OF ASSESSMENT IS VERY WELL TAKEN BY THE COURTS IN THE GIVEN FACTS OF THOSE CASE AND HELD TH AT ALTHOUGH, THE AO HAS POWER TO REOPEN THE ASSESSMENT, BUT REOPENIN G SHOULD BE ON THE BASIS OF TANGIBLE MATERIAL AND INFORMATION T O COME TO THE CONCLUSION THAT THERE IS A ESCAPEMENT OF INCOME. FU RTHER, THE LD. AO CANNOT MECHANICALLY AND ALSO, ON ERRONEOUS INFOR MATION REOPEN ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 24 ASSESSMENT. BUT, IF REASONS TO BELIEVE IS SUPPORTED BY TANGIBLE MATERIALS AND THE AO HAS FORMED REASONABLE BASIS OF ESCAPEMENT OF INCOME AS A PRUDENT PERSONS, THEN MERELY FOR THE RE ASON THAT REASONS RECORDED FOR REOPENING IS ON THE BASIS OF I NFORMATION RECEIVED FROM INVESTIGATION WING, IT CANNOT BE CONC LUDED THAT THE AO HAS NOT APPLIED HIS MIND AND FORMED OPINION OF THE BASIS OF INFORMATION. THEREFORE, FROM THE CASE LAWS CITED BY THE ASSESSEE, WHAT WE UNDERSTOOD IS THAT THE REOPENING OF ASSESSM ENT SHOULD BE ON THE BASIS OF FRESH TANGIBLE MATERIAL WHICH SUGGE ST ESCAPEMENT OF INCOME, BUT NOT ON THE BASIS OF REASONS RECORDED WI THOUT ANY NEXUS BETWEEN REASONS AND ESCAPEMENT OF INCOME. IN THIS C ASE, ON PERUSAL OF REASONS RECORDED BY THE LD. AO, IT IS AB UNDANTLY CLEAR THAT THE LD. AO HAS FORMED REASONABLE BELIEF OF ESCAPEME NT OF INCOME ON THE BASIS OF TANGIBLE MATERIAL WHICH IS CAME TO HIS POSSESSION SUBSEQUENT TO COMPLETION OF ASSESSMENT U/S 143(1) OF THE ACT AND ON THAT BASIS, HE COME TO THE CONCLUSION THAT THERE IS AN ESCAPEMENT OF INCOME WITHIN THE MEANING OF SECTION 147 OF THE I.T.ACT, 1961. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT REOPE NING OF ASSESSMENT IN THIS CASE IS ON VALID GROUNDS AND HEN CE, THE GROUNDS TAKEN BY THE ASSESSEE IS REJECTED. 13. AS REGARDS, THE ISSUE INVOLVED ON MERITS, WE FIND THAT ALTHOUGH, THE ASSESSEE CLAIMS TO HAVE INCURRED BUSINESS COUNS ELING EXPENDITURE WITH CERTAIN EVIDENCES, INCLUDING BILLS SUBMITTED BY THE SERVICE PROVIDES, PAYMENT THROUGH BANKING CHANNELS AND DEDUCTIONS OF TDS AS PER LAW, BUT, FACT REMAINS THAT IN ANY AR RANGEMENT, EVEN IN THE CASE OF ACCOMMODATION ENTRY, ALL THE PAPER F ORMALITIES ARE COMPLETED. BUT IT IS WELL SETTLED THAT MERELY PAPER FORMALITIES ARE NOT SUFFICIENT PROOF PARTICULARLY IN THE FACTS OF THE P RESENT CASE, WHERE THE ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 25 TWO COMPANIES TO WHOM PAYMENTS WERE MADE WERE NOT F OUND TRACEABLE AND THEIR EXISTENCE, THEIR PRESENCE, THEI R INFRASTRUCTURE, THE SERVICES RENDERED BY THEM OR NOT PROVED AT ALL. FUR THER, ENQUIRIES AND SPOT VERIFICATION DONE BY THE INVESTIGATION WIN G REVEALS THAT DURING THE RELEVANT YEAR SAID COMPANIES HAD NEVER B EEN OPERATED AND ALSO PRESENTLY NOT OPERATING FROM ANY OF THE AD DRESSES OF MUMBAI OR KOLKATA. THE ENQUIRIES AND SPOT VERIFICAT ION DONE BY THE INVESTIGATION WING REVEALED THAT SARVOTTAM ADVISORY PVT. LTD. WAS NOT OPERATING FROM ANY OF ITS ADDRESSES IN MUMBAI. THE TWO DIRECTORS OF THE SAID COMPANY WERE NOT HAVING PROPE R VERIFIABLE ADDRESS. NO DETAILS WERE PROVIDED TO THE A.O. OR DU RING THE APPELLATE PROCEEDINGS AS TO WHAT SERVICES HAVE BEEN PROVIDED BY THE ENTITIES TO THE ASSESSEE, DOCUMENTARY EVIDENCE IN SUPPORT OF SERVICES RENDERED AND ANY CORRESPONDENCE BETWEEN THESE TWO E NTITIES AND THE ASSESSEE. FURTHER, NOTICE U/S. 133(6) ISSUED TO AVRON CONSULTANCY SERVICES PVT. LTD. & SARVOTTAM ADVISORY PVT. LTD. WERE UNSERVED AND RETURNED BY THE POSTAL AUTHORITIES. TH E ASSESSEE WAS ALSO INFORMED THAT THE NOTICES U/S. 133(6) WAS RETU RNED BACK, IN SPITE OF THE SAME THE APPELLANT CHOSE TO REMAIN SILENT AB OUT THEIR WHEREABOUTS. 14. WE, FURTHER, NOTED THAT AFTER THE JCIT GAVE DIR ECTION U/S 144A TO CARRY OUT FURTHER INVESTIGATION, NOTICE U/S. 133 (6) WERE AGAIN ISSUED TO AVRON CONSULTANCY SERVICES PVT. LTD. (KOL KATA) & SARVOTTAM ADVISORY PVT. LTD. (MUMBAI) WHICH RETURNE D UNSERVED IN RESPECT OF AVRON CONSULTANCY SERVICES PVT. LTD. WIT H A COMMENT INSUFFICIENT ADDRESS. IN CASE OF SARVOTTAM ADVISORY PVT. LTD., THE INSPECTOR REPORTED THAT NO OFFICE/BUSINESS WAS CARR IED OUT FROM THE SAID ADDRESS WHICH IS A RESIDENTIAL FLAT AND SHRI D IPAN PATEL ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 26 GENERALLY VISITS THE FLAT WHICH REMAINS JOCK OTHERW ISE. FURTHER, COMMISSIONS U/S. 131(1)(D) OF THE IT. ACT WAS ISSUE D TO THE ACIT CIR. 6(2), KOLKATA BUT HIS SUMMONS IN CASE OF AVRON CONS ULTANCY SERVICES PVT. LTD COULD NOT BE SERVED AND THE INSPE CTOR ON FIELD VERIFICATION GAVE A REPORT THAT HE COULD NOT FIND A NY SUCH COMPANY IN THE STATED ADDRESS. LATER, SUMMONS U/S. 131 WAS ISS UED TO M/S. SARVOTTAM ADVISORY PVT. LTD, AT THEIR KNOWN ADDRESS 704, SAIRATH CHS, KESAR KUNJ BUILDING, TELLY GULLY, CROSS LANE, ANDHERI (E), MUMBAI -69. THIS TIME THE SUMMON WAS RECEIVED BY A PERSON SITTING IN THE PREMISES CLAIMING HIS NAME AS CHINTAN SHAH B UT SARVOTTAM ADVISORY PVT. LTD. DID NOT RESPOND TO THE SUMMONS E VEN TILL DATE OF PASSING THE ASSESSMENT ORDER. FURTHER NOTICE U/S. 133(6) DATED 18/12/2018 WERE AGAIN ISSUED TO THE PR. OFFICER OF M/S. CLIENT BRIGHT CONSULTANTS PVT. LTD. (FORMERLY KNOWN AS M/S, AVRON CONSULTANCY SERVICES PVT. LTD.) AT THEIR ADDRESS 4A, COUNCIL HO USE ESTATE, KOLKATA -1. THIS NOTICE HAS ALSO BEEN RECEIVED BACK AS UN-SERVED. FROM THE ABOVE, IT IS VERY CLEAR THAT SO CALLED EXP ENDITURE INCURRED UNDER THE HEAD BUSINESS COUNSELING CHARGES AND PAID TO M/S SARVOTTAM ADVISORY PVT.LTD. AND M/S AVRONS CONSULT ANCY SERVICES PVT.LTD IS NON GENUINE EXPENDITURE BOOKED IN COLLU SION WITH ENTRY PROVIDERS TO REDUCE PROFIT FOR THE YEAR, WHICH IS C LEARLY EVIDENT FROM FACTS GATHERED DURING COURSE OF SURVEY U/S 133A IN THE CASE OF M/S ALTIUS FINSERVE PVT.LTD AND SUBSEQUENT, INVESTIGATI ON CARRIED OUT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. FURTHE R, ALTHOUGH, THE ASSESSEE HAS FILED AFFIDAVIT OF DIPEN PATEL TO JUS TIFY HER CASE, BUT ON PERUSAL OF AFFIDAVIT FILED BY THE DIPEN PATEL, WE F IND THAT IT IS ONLY AN AFTERTHOUGHT TO CIRCUMVENT THE FINDINGS RECORDED BY THE LD. AO, IN LIGHT OF FACTS GATHERED DURING THE COURSE OF SURVEY PROCEEDING AND ONLY A SELF SERVING DOCUMENT. FURTHER, THE AFFIDAVI T OF MR.VISHWAS ITA NO.1028/MUM/2020 JAEE VISHWAS JOSHI 27 JOSHI, DATED 17/12/2018 IS ALSO A SELF SERVING DOCU MENT IS OF NO HELP TO THE ASSESEE, BECAUSE MR.VISHWAS JOSHI HAD TRY TO CONTRADICT HIS EARLIER ADMISSIONS. FROM THE ABOVE, IT IS VERY CLEA R THAT EXPENDITURE BOOKED IN THE NAME OF TWO ENTITIES IS A BOGUS EXPEN DITURE. THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT THE L D. AO, AS WELL AS THE LD.CIT(A) WERE COMPLETELY RIGHT IN DISALLOWED E XPENDITURE INCURRED UNDER THE HEAD BUSINESS COUNSELING CHARGES . HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF THE LD.CIT(A ) AND REJECT GROUNDS TAKEN BY THE ASSESSEE. 15. IN THE RESULT, APPEAL FILED BY THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS: 29 /07 /2020 SD/- (RAVISH SOOD) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 29 /07/2020 THIRUMALESH SR.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//