ASPIRE MERCANTILE P. LTD, NAVI MUMBAI V. ACIT CEN CIR 45, MUMBAI

ITA 1471/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0839 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 08-03-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 18-02-2011
• Court: TRIBUNAL
• Department Lawyers: B C S NAIK
• Keywords: Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE S/ SHRI B.R. BASKARAN (AM) & SANDEEP GOSAIN (JM) I.T.A. NO. 1471 /MUM/20 11 (ASSESSMENT YEAR 20 06 - 07 ) M/S. ASPIRE MERCANTILE PVT. LTD. SHOP NO. 13, HINDVI BHAVAN PLOT NO. 13, SECTOR NO. 1 VASH I NAVI MUMBAI - 400703. VS. ACIT CENTRAL CIRCLE 45 MUMBAI. ( APPELLANT ) ( RESPONDENT ) PAN NO . AAFCA1712M ASSESSEE BY NONE DEPARTMENT BY SHRI B.C.S. NAIK DATE OF HEARING 2 6 . 4 . 201 7 DATE OF PRONOUNCEMENT 26 . 4 . 201 7 O R D E R PER B.R. BA SKARAN (AM) : - THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 30.12.2010 PASSED BY THE LEARNED CIT(A) - 36, MUMBAI AND IT RELATES TO A.Y. 2006 - 07. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF THE LEARNED CIT(A) IN PARTIALLY CONFIRMING THE ADDITION MADE U/S. 68 OF THE I.T. ACT RELATING TO SUNDRY CREDITORS. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THOUGH NOTICE OF HEARING WAS SENT TO THE ASSESSEE ON MORE THAN ONE OCCASION. HENCE, WE PROCEED TO DISPOSE OF THE APPEAL EX - PARTE, WITHOUT P RESENCE OF THE ASSESSEE. 3. WE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. THE ASSESSEE - COMPANY ENGAGED IS CARRYING ON THE BUSINESS OF TRADING IN SHARES AND DERIVATIVES. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED UN SECURED LOAN OF ` 7.68 CRORES. SINCE THE ASSESSEE FAILED TO PROVE UNSECURED LOAN, THE ASSESSING OFFICER ASSESSED ENTIRE AMOUNT OF ` 7.68 CRORES M/S. A SPIRE MERCANTILE PVT. LTD. 2 AS INCOME OF THE ASSESSEE U/S. 68 OF THE ACT. IN THE APPELLATE PROCEEDINGS, THE LEARNED CIT(A) CONFIRMED THE ADD ITION TO THE EXTENT OF ` 1.91 CRORES WITH FOLLOWING OBSERVATIONS : - I HAVE CONSIDERED THE EVIDENCE PRODUCED BEFORE ME AS WELL AS THE REMAND REPORT OF THE ASSESSING OFFICER. WHILE GOING THROUGH THE SAME, I FIND THAT THE ACCURATE MERCANTILE PRIVATE LIMITED, RUBICON PHARMACEUTICAL PRIVATE LIMITED AND NIKETAN MERCANTILE PRIVATE LIMITED ARE ASSESSED TO TAX IN THE SAME CHARGE. THE IDENTITY OF THESE LOAN CREDITORS HENCE COULD NOT BE IN DOUBT. THE BALANCE SHEETS AND ACCOUNTS OF THESE COMPANIES ARE ON RECORD AND THE LOAN TRANSACTIONS ARE REFLECTED IN THESE BOOKS OF ACCOUNTS AND HENCE THE CAPACITY OF THESE LOAN CREDITORS CANNOT BE DOUBTED. THESE TRANSACTIONS STAND PROVED AND HENCE THE ADDITIONS O N ACCOUNT OF UNSECURED LOANS FROM THESE CREDITORS ARE DELETED. THE APPE LLANT HAS FILED LOAN CONFIRMATION FROM M/S NISHA ENTERPRISES. IN THIS CASE THE STATEMENT OF THE PROPRIETOR OF THE FIRM HAS STATED ON OATH THAT THE TRANSACTIONS WITH M/S. ASPIRE MERCANTILE PVT. LTD. ARE MERELY ACCOMMODATION ENTRIES. SHREE SIDHI STEEL IS THE PARTNERSHIP FIRM IN WHICH THE DIRECTORS OF THE ASSESSEE COMPANY ARE PARTNERS AND THREE BROS IS THE PROPRIETORSHIP FIRM OF THE FAMILY MEMBERS OF THE DIRECTORS OF THE APPELLANT FIRM. THE ASSESSEE HAS FILED THE LOAN CONFIRMATIONS, THE PAN NO. OF THE LOAN CRE DITORS, THEIR BANK STATEMENTS. IN RESPECT OF LOANS FROM THESE PARTIES I HAVE SEEN THAT THOUGH THE ASSESSEE FILED LOAN CONFIRMATIONS BEFORE ME SUPPORTED BY THEIR RETURN ACKNOWLEDGEMENTS AND BALANCE SHEETS IN MOST CASES, THE INITIAL ONUS IS NOT DISCHARGED AN D HENCE I TREAT THESE UNSECURED LOANS AS UNEXPLAINED INCOME OF THE ASSESSEE. HENCE THE ADDITION U/S 68 IN RESPECT OF UNSECURED LOANS FROM THE FOLLOWING PARTIES IS CONFIRMED. SR.NO. NAME OF LENDER AMOUNT RECEIVED 1 NISH A ENTERPRISES 25,50,000/ - 2 SHREE S IDDHI STEEL 54,00,000/ - 3 THREE A BROTHERS 39,50,000/ - 4 ODYSSEY CORPORATION LTD. 72,20,000/ - TOTAL 1,91,20,000/ - CONSIDERING THE ARGUMENTS AND THE SUBMISSIONS MADE BY THE APPELLANT IT IS HEREBY CONCLUDED THAT THE RECEIPT OF UNSECURED LOANS GIVEN BY THE PARTIES WHICH ARC UNDER THE CHARGE OF THE SAME ASSESSING OFFICER CANNOT BE CHARGED TO TAX. ACCORDINGLY, I HOLD THAT THE ADDITIONS OF RS.5,77,50,000/ - MADE BY THE AO BEING THE AMOUNT OF UNSECURED LOANS RECEIVED FROM PARTIES WHICH ARE UNDER THE SAME CHAR GE ARE REQUIRED TO BE DELETED IN THE IMPUGNED ASSESSMENT YEAR. THE ADDITION IN RESPECT OF LOANS AMOUNTING TO RS.1,91,20,000/ - AS MENTIONED ABOVE ARE CONFIRMED. M/S. A SPIRE MERCANTILE PVT. LTD. 3 4. A C AREFUL PERUSAL OF THE ORDER PASSED BY THE LEARNED CIT(A) WOULD SHOW THAT THERE WAS CONTRA DICTION BETWEEN THE DECISION TAKEN BY THE LEARNED CIT(A) AND REASONING GIVEN BY HIM. THE LEARNED CIT(A) HAS SPECIFICALLY OBSERVED THAT M/S. SHREE SIDDHI STEEL AND M/S THREE A BROTHERS ARE RELATED CONCERNS AND THEY HAVE ALSO FILED CONFIRMATION LETTERS SUPPO RTED BY THEIR FINANCIAL STATEMENT AND COPY OF INCOME TAX RETURNS. HAVING SAID SO, THE LEARNED CIT(A) HAS CONFIRMED THE ADDITION RELATING TO THE LOAN S TAKEN FROM ABOVE SAID TWO CONCERNS WITHOUT FINDING FAULT WITH THE DOCUMENTS FURNISHED BY THE ASSESSEE . THE LEARNED CIT(A) HAS NOT GIVEN ANY REASONING FOR CONFIRMING THE ADDITION OF LOAN TAKEN FROM M/S. ODYSSEY CORPORATION LTD. HENCE, WE ARE OF THE VIEW THAT THE ISSUE RELATING TO THESE THREE CREDITORS REQUIRE FRESH EXAMINATION AT THE END OF THE LEARNED CIT(A). WITH REGARD TO THE LOAN TAKEN FROM M/S NISHA ENTERPRISES, WE NOTICE THAT THE LD CIT(A) HAS CONFIRMED THE ADDITION, SINCE THE PROPRIETOR OF THE ABOVE SAID FIRM HAS CONFESSED THAT HE HAS PROVIDED ONLY ACCOMMODATION ENTRIES. BEFORE US, NO MATERIAL WAS PLACE D BY THE ASSESSEE TO CONTRADICT THE FINDINGS GIVEN BY LD CIT(A) IN RESPECT OF LOAN TAKEN FROM M/S NISHA ENTERPRISES. ACCORDINGLY, WE CONFIRM THE ORDER PASSED BY THE LEARNED CIT(A) IN RESPECT OF LOAN TAKEN FROM NISHA ENTERPRISES AND RESTORE THE ADDITION REL ATING TO M/S. SHREE SIDDHI STEEL , M/S . THREE A BROTHERS AND M/S. ODYSSEY CORPORATION LIMITED TO HIS FILE FOR CONSIDERING THE M AFRESH. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS TREATED AS PART LY ALLOWED FOR STATISTICAL PURP O S ES. ORDER HAS BE E N PRONOUNCED IN THE COURT ON 2 6 . 4 .201 7. SD/ - SD/ - (SANDEEP GOSAIN ) (B.R.BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 26 / 4 / 20 1 7 C OPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT M/S. A SPIRE MERCANTILE PVT. LTD. 4 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) PS ITAT, MUMBAI