POOJA ANOOP KHANNA, MUMBAI V. ITO - 21 (2)(5), MUMBAI

ITA 1127/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3837 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH RAI
• Keywords: Reopening of assessment; Search and seizure; Accommodation entries
• Section: 147; 148; 132

Judgement Text

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IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER . 1126 / / 2019 (%. .2009-10 ) ITA NO. 1126/MUM/2019(A.Y.2009-10 MANJU ANOOP KHANNA, A-36, ANAND NAGAR, SITALADEVI TEMPLE ROAD, MAHIM,MUMBAI 400 016 PAN:AAKPK-3585-C / VS. : / APPELLANT ITO-21(2)(2), ROOM NO.111, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. : / RESPONDENT . 1127 / / 2019 (%. .2009-10 ) ITA NO. 1127/MUM/2019(A.Y.2009-10) POOJA ANOOP KHANNA, A-36, ANAND NAGAR, SITALADEVI TEMPLE ROAD, MAHIM,MUMBAI 400 016 PAN:AIIPK -2896-A / VS. : / APPELLANT ITO-21(2)(5), ROOM NO.107, 1 ST FLOOR, PIRAMAL CHAMBERS, PAREL, MUMBAI 400 012. : / RESPONDENT ASSESSEE BY : SHRI NISHIT GANDHI REVENUE BY : SHRI SAURABH RAI / DATE OF HEARING : 11 /06/2021 / DATE OF PRONOUNCEMENT : 06/09/2021 2 ITA NO. 1126 & 1127/MUM/2019(A.Y.2009-10) / ORDER THESE TWO APPEALS BY TWO DIFFERENT ASSESSEES IS DI RECTED AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS)-33, MUMBAI (IN SHORT THE CIT(A)) FOR THE ASSESSMENT YEAR 2009-10, IN THEI R RESPECTIVE CASES. BOTH THE IMPUGNED ORDERS ARE OF EVEN DATED I.E. 12/12/2018. SINCE, THE GROUNDS RAISED IN BOTH THE APPEALS GERMINATE FROM SAME SET OF FAC TS, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION AND ARE DECIDED BY THI S COMMON ORDER. FOR THE SAKE OF CONVENIENCE THE FACTS ARE NARRATED FROM THE APPEAL IN ITA NO.1126/MUM/2019, A.Y. 2009-10. ITA NO.1126/MUM/2019,A.Y. 2009-10 : 2. SHRI NISHIT GANDHI APPEARING ON BEHALF OF THE AS SESSEE SUBMITTED THAT THE ASSESSMENT FOR ASSESSMENT YEAR 2009-10 IN THE C ASE OF ASSESSEE WAS REOPENED CONSEQUENT TO SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'), IN THE CASE OF AHUJA GROUP, MUMBAI. THE AHUJA GROUP ALLEGEDLY MAINTAINED PARALLEL SET O F BOOKS CONTAINING UNACCOUNTED TRANSACTIONS IN THE FORM CASH/LOANS, E TC. THE NAME OF THE ASSESSEE APPEARED IN THE SAID BOOKS. AS PER THE EN TRY DATED 24/11/2008 RECORDED IN THE PARALLEL SET OF BOOKS MAINTAINED BY THE AHUJA GROUP THE ASSESSEE HAD ISSUED A CHEQUE FOR RS.30,00,000/- IN LIEU OF CASH RECEIVED FROM AHUJA GROUP. 3. THE LD. COUNSEL FOR THE ASSESSEE MADE TWO FOLD SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSMENT HAS BEEN REOPENED MERELY ON SUSPICION. THE LD.COUNSEL FOR THE ASSESS EE POINTED THAT THE ASSESSING OFFICER IN ASSESSMENT ORDER HAS REPRODUCE D EXTRACTS OF STATEMENT OF MR. JAGDEESH B. AHUJA, DIRECTOR OF AHUJA GROUP. NO WHERE IN THE STATEMENT 3 ITA NO. 1126 & 1127/MUM/2019(A.Y.2009-10) MR. JAGDEESH B. AHUJA, HAS MADE REFERENCE OF THE NA ME OF ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE POINTED THAT IN PARA 5. 3 OF THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS RECORDED THAT ON THE BASI S OF STATEMENT OF MR. JAGDEESH B. AHUJA, AND UNACCOUNTED TRANSACTIONS/ AC COMMODATION ENTRIES CAST SHADOW OF SUSPICION ON THE TRANSACTION BETWEEN THE ASSESSEE AND MR. JAGDEESH B. AHUJA, AND HAS TERMED THE TRANSACTIONS SHADY. THE LD.COUNSEL FOR THE ASSESSEE ASSERTED THAT ADDITION IN REASSESSMEN T PROCEEDINGS CANNOT BE MADE MERELY ON SUSPICION, CONJECTURES AND SURMISES . THE ASSESSING OFFICER HAS NOT RECORDED HIS OWN SATISFACTION FOR REOPENING THE ASSESSMENT, THE ASSESSING OFFICER HAS INITIATED REASSESSMENT PROCE EDINGS MERELY ON THE BASIS OF MATERIAL FOUND IN SEARCH ACTION ON AHUJA GROUP. ON MERITS OF THE ADDITION, THE LD.COUNSEL FOR THE ASSESSEE POINTED THAT THE ASSESSEE HAD FIELD A REPLY BEFORE THE ASSESSIN G OFFICER CATEGORICALLY STATING THAT THE ASSESSEE HAD TAKEN HAND LOAN FROM MR. JAG DEESH B. AHUJA, TOTALLING TO RS.30,00,000/- DURING FINANCIAL YEAR 2006-07. THE S AID LOAN WAS REPAID BY THE ASSESSEE TO MR. JAGDEESH B. AHUJA, VIDE CHEQUE NO .141180 FOR RS.10,00,000/- AND CHEQUE NO.989776 FOR RS.20,00,000/- DURING FINA NCIAL YEAR 2008-09. IN SUPPORT OF HIS CONTENTION THE ASSESSEE HAD FURNISHE D A COPY OF LEDGER SHOWING MR. JAGDEESH B. AHUJA, LOAN ACCOUNT FOR FINANCIAL Y EAR 2006-07 AND FINANCIAL YEAR 2008-09. THE ASSESSEE HAD ALSO FURNISHED COP Y OF THE BANK STATEMENT INDICATING THAT THE AFORESAID CHEQUES WERE ENCASHED AND THE AMOUNTS WERE DEBITED FROM THE BANK ACCOUNT OF THE ASSESSEE. TH E AUTHORITIES BELOW WITHOUT ANY VALID REASON REJECTED THE CONTENTIONS OF THE AS SESSEE. THE LD.COUNSEL FOR THE ASSESSEE FURTHER CONTENDED THAT CIT(A) HAS ERRED IN INTERPRETING THE WORDS ENTRY ACCOUNT MENTIONED IN PARALLEL BOOKS OF ACCOUNT MAINTAINED BY AHUJA GROUP TO MEAN AS ACCOM MODATION ENTRIES . 4 ITA NO. 1126 & 1127/MUM/2019(A.Y.2009-10) NOWHERE IN THE STATEMENT MADE BY MR. JAGDEESH B. AHUJA, AND REPRODUCED IN ASSESSMENT ORDER IT HAS BEEN STATED THAT ENTRY A CCOUNT MEANS ACCOMMODATION ENTRY. THE CIT(A) HAS DRAWN CONCLUSI ON ON THE NOMENCLATURE OF ENTRY ACCOUNT MERELY ON SUSPICION WITHOUT THER E BEING ANY BASIS. 4. PER CONTRA, MS. SMITA VERMA REPRESENTING THE DE PARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND THE ASSESSMENT ORDE R. THE LD.DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT IN THE STATEMENT MADE BY MR. JAGDEESH B. AHUJA, DURING SEARCH ACTION THE MODUS OPERANDI OF ACCOMMODATION ENTRIES HAS BEEN CLEARLY ADMITTED AND EXPLAINED. THE AHUJA GROUP WAS MAINTAIN PARALLEL SET OF BOOKS, THIS FACT WAS ADMITTED BY MR. JAGDEESH B. AHUJA, IN HIS STATEMENT. IN PARALLEL SET OF BOOKS THERE WAS EN TRY, WHERE THE NAME OF THE ASSESSEE IS MENTIONED. ON THE BASIS OF SAID ENTRY REOPENING PROCEEDINGS WERE INITIATED IN THE CASE OF ASSESSEE. ON MERITS THE LD.DEPARTMENTAL REPRESENTATIVE POINTED THAT THE ASSESSEE FAILED TO SUBSTANTIATE RECEIPT OF LOAN FROM AHUJA GROUP DURING FINANCIAL YEAR 2006-07. TH EREFORE, THE ASSESSING OFFICER DISBELIEVED THE EXPLANATION FURNISHED BY TH E ASSESSEE. 5. BOTH SIDES HEARD, ORDERS OF AUTHORITIES BELOW EX AMINED. THE ASSESSEE IN GROUND NO.2 OF THE APPEAL HAS ASSAILED REOPENING OF ASSESSMENT. THE CONTENTION OF THE ASSESSEE AGAINST REOPENING OF ASS ESSMENT IS THAT THE ASSESSMENT HAS BEEN REOPENED MERELY ON SUSPICION, S URMISES AND CONJECTURES. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT ASSES SMENT FOR ASSESSMENT YEAR 2009-10 HAS BEEN REOPENED ON THE BASIS OF THE STAT EMENT OF MR. JAGDEESH B. AHUJA, RECORDED UNDER SECTION 132(4) OF THE ACT, WH EREIN HE HAS ADMITTED THAT AHUJA GROUP WAS MAINTAINING PARALLEL BOOKS CONTAINI NG UNACCOUNTED 5 ITA NO. 1126 & 1127/MUM/2019(A.Y.2009-10) TRANSACTIONS IN THE FORM CASH / LOAN ACCOUNT. IN T HE SAID BOOKS THERE APPEARED ONE ENTRY DATED 24/11/2008, THE SAME IS REPRODUCED AS UNDER:- DATE DR/CR PARTICULARS NARRATION DEBIT CREDIT 24.11.2008 DR ENTRY A/C CHEQUE RECEIVED BACK FVG JBA FOR 30L(20+10) FROM ANOOP AND MANJU KHANNA RESPECTIVELY. 3 000000.00 AFTER EXAMINING THE ENTIRE TRANSACTIONS THE ASSESSI NG OFFICER CONCLUDED AS UNDER: 5.3 FURTHER, THE STATEMENT OF MR.AHUJA THAT TH ESE UNACCOUNTED TRANSACTIONS/ ACCOMMODATION ENTRIES PUT THE SAID TRANSACTIONS IN THE SHADOW OF SUSPICION TO BE A SHADY TRANSACTION. MOREOVER THE MODUS OPERAND! OF A HUJA GROUP CONFORMS TO A STANDARD NATURE OF HAWALA DEALINGS . A CLOSE EXAMINATION OF THE ASSESSMENT ORDER REVEALS THAT THE ASSESSING OFFICER MERELY ON THE BASIS OF INFORMATION RECEIVED FROM THE DOCUMENTS / STATEMENTS RECORDED DURING THE SEARCH OPERATION ON AHUJA GROUP HAS REOPENED THE ASSESSMENT IN THE CASE OF ASSESSEE. THE ASSESSING OFFICER HAS NOT GIVEN ANY CONCLUSIVE FINDING THAT THE ASSESSEE HAS INDULGED IN PROVIDING ACCOMMODATION ENTRIES TO AHUJA GROUP. THE FINDINGS OF THE ASSES SING OFFICER IN PARA 5.3 OF THE ASSESSMENT ORDER REPRODUCED ABOVE INDICATES THA T THE ASSESSING OFFICER HAS MADE ADDITION MERELY ON SUSPICION AND SURMISES. THE ASSESSING OFFICER WAS HIMSELF NOT CONVINCED TO THE CORE REGARDING AS SESSEES INVOLVEMENT IN PROVIDING ACCOMMODATION ENTRIES. IT IS NO MORE RE- INTEGRA THAT PROVISIONS OF SECTION 147 CANNOT BE INVOKED MERELY ON SUSPICION. THE ASSESSING OFFICER HAS TO RECORD HIS OWN SATISFACTION REGARDING ESCAPEMEN T OF INCOME ON ACCOUNT OF NON-DISCLOSURE OR SUPPRESSION OF INCOME BY THE ASSE SSEE. IN THE PRESENT CASE I FIND THAT ASSESSMENT HAS BEEN REOPENED MERELY ON SU SPICION. THE REOPENING IS HELD TO BE BAD IN LAW AND CONTRARY TO THE PROVI SIONS OF SECTION 147 / 148 OF THE ACT. 6 ITA NO. 1126 & 1127/MUM/2019(A.Y.2009-10) 6. ON MERITS OF THE ADDITION, THE CASE OF THE REVEN UE IS THAT THE ASSESSEE HAS PROVIDED ACCOMMODATION ENTRIES TO AHUJA GROUP. THE ASSESSEE HAS ALLEGEDLY ISSUED CHEQUE IN LIEU OF CASH RECEIVED FR OM AHUJA GROUP. ALTHOUGH THE ASSESSEE HAD NOT ADMITTED TO THE AFORESAID TRAN SACTION AND HAS GIVEN A SEPARATE DIMENSION TO THE TRANSACTION STATING THAT IT WAS A HAND LOAN RECEIVED BY THE ASSESSEE IN FINANCIAL YEAR 2006-07 FROM MR. JAGDEESH B. AHUJA, THAT WAS REPAID THROUGH BANKING CHANNEL DURING THE PERIOD RE LEVANT TO THE ASSESSMENT UNDER APPEAL. THE REVENUE HAS REJECTED THE CONTENT ION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PROVE R ECEIPT OF LOAN FROM AHUJA GROUP BY FILING COGENT EVIDENCES. IF THE REASON FO R MAKING THE ADDITION BY THE REVENUE IS ACCEPTED EVEN THEN THE ADDITION IS NOT S USTAINABLE AS IT IS THE MONEY OF AHUJA GROUP THAT HAS BEEN PAID BACK BY TH E ASSESSEE BY WAY OF CHEQUE. THEREFORE, THE ADDITION CANNOT BE MADE UND ER ANY OF THE PROVISIONS OF THE ACT. I FIND NO REASON TO SUSTAIN THE ADDITI ON OF RS.30,00,000/-. THE GROUND NO.3 OF THE APPEAL IS CONSEQUENTLY ALLOWED. 7. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED ITA NO.1127/MUM/2019,A.Y.2009-10: 8. BOTH SIDES ARE UNANIMOUS IN STATING THAT THE NAT URE OF TRANSACTION, THE REASON AND MANNER FOR INVOKING PROVISIONS SECTIO N 147 / 148 OF THE ACT ARE IDENTICAL TO THE CASE IN ITA NO.1126/MUM/2019. THE LD.COUNSEL FOR THE ASSESSEE HAS POINTED THAT EVEN THE GROUND OF APPEAL ARE IDENTICAL TO THE GROUNDS RAISED IN ITA NO.1126/MUM/2019. THE LD.COU NSEL FOR THE ASSESSEE SUBMITTED THAT THE SUBMISSIONS MADE FOR ITA NO.1126 /MUM/2019 (SUPRA) WOULD EQUALLY APPLY TO THE PRESENT APPEAL. 7 ITA NO. 1126 & 1127/MUM/2019(A.Y.2009-10) 9. IN THE PRESENT APPEAL THE TRANSACTION RECORDED I N PARALLEL SET OF BOOKS BY AHUJA GROUP THAT HAS RESULT IN RE-OPENING OF ASSESS MENT AND ADDITION IN THE HANDS OF ASSESSEE IS REPRODUCED HERE IN UNDER: DATE DR/CR PARTICULARS NARRATION DEBIT CREDIT 2 5 .11.2008 DR ENTRY A/C ANUP KHANNA CHEQ RECD BACK FVG JBA FIR 11 L FROM POOJA KHANNA. 11 00000.00 26.11.2008 DR ENTRY A/C. ANUP KHANN CHEQ RECD BACK FVG JBA FOR 19 L FROM POOJA KHANNA 1900000.00 TOTAL 3000000.00 SINCE, THE GROUNDS OF APPEAL AND THE FACTS GIVING R ISE TO THE ADDITION IN THE PRESENT APPEAL ARE IDENTICAL TO ITA NO.1126/MUM/201 9 (SUPRA), THE FINDINGS GIVEN IN THE AFORESAID APPEAL WOULD MUTATIS MUTAND IS APPLY TO THE PRESENT APPEAL. CONSEQUENTLY, THE APPEAL BY THE ASSESSEE I S ALLOWED FOR PARITY OF REASONS . 11. TO SUM UP, ITA NO.1126/MUM/2019 AND ITA NO.1127 /MUM/2019 ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON MONDAY, THE 06TH DAY OF SEPTEMBER, 2021. SD/- (VIKAS AWASTHY) / JUDICIAL MEMBER / MUMBAI, (%/ DATED: 06/09/2021 VM , SR. PS(O/S) 8 ITA NO. 1126 & 1127/MUM/2019(A.Y.2009-10) COPY OF THE ORDER FORWARDED TO : 1. ) / THE APPELLANT , 2. *+ / THE RESPONDENT. 3. ,+ ( )/ THE CIT(A)- 4. ,+ CIT 5. -.*+% , . . . , / DR, ITAT, MUMBAI 6. ./012 / GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI