ECOTECH INFORMATICS PVT LTD, MUMBAI V. ITO-12(2)(2) , MUMBAI

ITA 1305/MUM/2023

AI Insights

The case involves Ecotech Informatics Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre (NFAC) concerning the assessment year 2011-12. The primary contention was regarding the treatment of unsecured loans received by the company, which were deemed non-genuine or bogus by the lower tax authorities. The Income Tax Officer (ITO) had reopened the case based on information that the company received accommodation entries from entities linked to a known entry provider, Praveen Kumar Jain. The CIT (A) confirmed the ITO's order without the presence of the assessee, leading to the current appeal. The Tribunal noted the absence of the assessee in previous hearings and decided to remand the case back to the CIT (A) for a thorough re-examination with an opportunity for the assessee to present their case.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123468 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 03-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 17-04-2023
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Accommodation entries
• Section: 148; 132; 143(3); 142(1); 133(6); 143(1); 250; 143(2); 153C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “E”, MUMBAI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No. 1305/Mum/2023 (A.Y.2011-12) Ecotech Informatics Pvt. Ltd. CTS No. 271, House no. 45A, 1 st floor, R. No. 103, Chimbai Road, Bandara (W), Mumbai-400 050 PAN: AACCE4381R ...... Appellant Vs. ITO-12(2)(2) Aayakar Bhavan, M. K. Road, Mumbai-400 020 ..... Respondent Appellant by : Shri Jayant R. Bhatt, Ld. AR Respondent by : Shri Biswanath Das, Ld. CIT-DR Date of hearing : 04/07/2023 Date of pronouncement : 25/08/2023 O R D E R PER GAGAN GOYAL, A.M: This appeal by assessee is directed against the order of National Faceless Appeal Centre (for short “NFAC”) dated 29.12.2022 u/s. 250 of the Income Tax 2 ITA No. 1305/Mum/2023 Ecotech Informatics Pvt. Ltd. Act, 1961 (in short ‘the Act’) for A.Y. 2011-12. The assessee has raised the following grounds of appeal:- 1. On the facts and circumstances of the Appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) failed to comment on validity of the order passed u/s. 143(3) r.w.s. 147 of the Income Tax Act, 1961. 2. On the facts and circumstances of the Appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in not commenting on the fact that an opportunity to cross examination has not been awarded to the appellant. 3. On the facts and circumstances of the Appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in treating the unsecured loan received as non-genuine / bogus. 4. On the facts and circumstances of the Appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in confirming the additions made by the Ld. AO without appreciating the fact that the repayment of the loan taken has already been made. 5. On the facts and circumstances of the Appellant's case and in law the Ld. Commissioner of Income Tax (Appeals) erred in confirming the addition of Rs. 94,19,178/- by treating the loan received (peak credit) as unexplained cash credit u/s. 68 of the Income Tax Act, 1961. 6. The Appellant craves leaves to add, to amend, alter, modify and/or withdraw any or all of the above grounds of appeal, each of which are without prejudice to one another. 2. The brief facts of the case are that assessee company filed its return of income declaring total at Rs. 2,33,370/-. Return of the assessee was processed u/s. 143(1) of the Act. Thereafter, an information was received 3 ITA No. 1305/Mum/2023 Ecotech Informatics Pvt. Ltd. from the office of DCIT, Central Circle 1(1), Dated: 24.11.2015 that assessee received accommodation entries from the entities controlled and floated by Praveen Kumar Jain Group, which are as under:- Sr. No. Name of the Party Amount Date 1. M/s Raghunandan Rayon Pvt. Ltd. 50,00,000 29.07.2010 2. M/s Atharva Business Pvt. Ltd. 40,00,000 18.08.2010 & outsider parties:- Sr. No. Name of the Party Amount Date 1. M/s Dev Sharing Pvt. Ltd, 21,00,000 21.01.2011 2. M/s MeghnaOrganicssPvt. Ltd. 80,00,000 16.07.2010 Considering this information the case was re-opened and notice u/s. 148 of the Act was issued on 31.03.2016, after obtaining appropriate approval. 3. In response to the notice u/s. 148 of the Act, assessee vide letter Dated: 24.06.2016 stated the original Income Tax Return filed by the assessee on 29.09.2011 may be treated as the Income Tax Return filed u/s. 148 of the Act. Thereafter, notice u/s. 142(1) and 143(2) of the Act were issued vide Dated: 08.06.2016 and 03.08.2016. AO issued notice u/s. 133(6) of the Act to M/s. Raghunandan Rayans Ltd. and M/s. Atharva Business Pvt. 4 ITA No. 1305/Mum/2023 Ecotech Informatics Pvt. Ltd. Ltd. to confirm the transaction amounting to Rs. 52,41,644/- and 41,77,354/- respectively. In response to assessee’s submissions and other information in possession of AO, he observed as under:- 4.2 M/s Raghunandan Rayans Ltd. and M/s Arthav Business Pvt. Ltd are companies of controlled by a leading entry provider Praveen Kumar Jain. A brief background of the matter is that a search and seizure action was conducted u/s. 132 of the Act on Praveen Kumar Jain Group and these companies were found to be involved in the activities of providing accommodation entries and Shri. Praveen Kumar Jain has accepted that accommodation entries through various companies. Post search the cases on which search was conducted including M/s Raghunandan Rayans Ltd. and M/s Arthav Business Pvt. Ltd., were centralized with DCIT CC 1(1), Mumbai and the said Assessing officer DCIT CC 1(1) Mumbai has passed the order u/s. 153C of the Act. 4.3 This office has obtained the assessment orders u/s 153C of the Act in the case of M/s Raghunandan Rayans Ltd. and M/s Arthav Business Pvt. Ltd., in the said orders, the assessing officer [DCIT CC 1(1) Mumbail has proved that these two companies are involved in the activities of providing accommodation entries for a commission at 2.4% of the transaction value of each entry provided as loans and advances. The assessing officer [DCIT CC 1(1), Mumbai] has added these commission incomes in the hands of the M/s Raghunandan Rayans Ltd. and M/s. Arthav Business Pvt. Ltd. This proves that the money which has come from the above two companies are nothing but accommodation entries of loans and advances. 4. Based on above information, AO added back the amount as unexplained cash credits u/s. 68 of the Act. Assessee being aggrieved with the same preferred an appeal before the Ld. CIT(A), who in turn confirmed the order of AO, as assessee never turned up before him to represent the matter and appeal order 5 ITA No. 1305/Mum/2023 Ecotech Informatics Pvt. Ltd. u/s. 250 was passed ex-parte. Assessee being further aggrieved preferred this present appeal before us. 5. We have gone through the order of AO, order of Ld. CIT(A) and grounds raised by the assessee. It is observed that assessee never turned up before the Ld. CIT(A) during the appellate proceedings and Ld. CIT(A) categorically mentioned a log of notices issued and non-compliance by assessee vide page no. 3, para 4 of the appellate order. We have taken note of Assessee’s letter filed before us vide Dated: 04.07.2023 also. Through this letter assessee itself accepted about its non- appearance and also tried to explain the reasons of its non-appearance. As per assessee earlier address of communication pertains to erstwhile consultant, who never attended the matter regularly. Through this letter assessee submitted active e-mail id and correct address for communication in future. Considering the order of Ld. CIT (A), i.e., Ex-Parte in nature and request of assessee, in all fairness of matter, we re-store the matter back to the file of Ld. CIT (A) for fresh adjudication of the matter on merits based on the submissions of assessee and after giving, assessee a fresh opportunity of being heard. Assessee is also directed to co-operate with the notices issued and participate in the proceedings. 6. In the result, Appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 25 th day of August, 2023. Sd/- Sd/- (AMIT SHUKLA) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER 6 ITA No. 1305/Mum/2023 Ecotech Informatics Pvt. Ltd. Mumbai, दिन ांक/Dated: 25/08/2023 Sr. PS (Dhananjay) Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकर आयुक्त CIT 4. दवभ गीय प्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्ड फ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar) ITAT, Mumbai