Vijay Kumar Rungta, Erode V. ITO, Erode

ITA 179/CHNY/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9699 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 02-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MRS S VIDYA CA SH P RADHAKRISH
• Keywords: Unexplained investment; Accommodation entries
• Section: 69; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.179/MDS/2016 ' (' / ASSESSMENT YEAR : 2007-08 SHRI VIJAY KUMAR RUNGTA, 812, BABY COMPLEX 2 ND FLOOR, KNK ROAD, ERODE 638 003. PAN : AAAPR 7527 B V. THE INCOME TAX OFFICER, WARD I(3), 15, GANDHIJI ROAD, ERODE 638 001. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : MRS. S. VIDYA, CA ,-*+ . / / RESPONDENT BY : SH. P. RADHAKRISHNAN, JCIT 0 . 1$ / DATE OF HEARING : 23.03.2016 2!( . 1$ / DATE OF PRONOUNCEMENT : 07.04.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 3, COIMB ATORE, DATED 26.11.2015 AND PERTAINS TO ASSESSMENT YEAR 2007-08. 2. SMT. S. VIDYA, THE LD. REPRESENTATIVE FOR THE AS SESSEE, SUBMITTED THAT THE ONLY ISSUE ARISES FOR CONSIDERAT ION IS WITH REGARD 2 I.T.A. NO.179/MDS/16 TO ADDITION MADE UNDER SECTION 69 OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). ACCORDING TO THE LD. REPRESENTAT IVE, THE ASSESSEE BORROWED A LOAN FROM SHRI ROSE SUDHIR PADBIDIRI, PR OPRIETOR OF M/S NATASHA ENTERPRISES. THE ASSESSING OFFICER DISBELI EVED THE TRANSACTION OF LOAN BORROWED BY THE ASSESSEE AND TR EATED THE LOAN AMOUNT AS UNEXPLAINED INVESTMENT IN THE HANDS OF TH E ASSESSEE. ACCORDING TO THE LD. REPRESENTATIVE, SHRI ROSE SUDH IR PADBIDIRI, THE PROPRIETOR OF M/S NATASHA ENTERPRISES, HAS FILED AN AFFIDAVIT CONFIRMING THAT HE ADVANCED A SUM OF ` 6 LAKHS TO THE ASSESSEE. IN FACT, THE SAID SHRI ROSE SUDHIR PADBIDIRI WAS ASSES SED TO INCOME TAX. THE ASSESSEE HAS PROVIDED THE PAN AND OTHER D ETAILS BEFORE THE ASSESSING OFFICER. THE LOAN WAS BORROWED BY ME ANS OF CHEQUES. THEREFORE, ACCORDING TO THE LD. REPRESENT ATIVE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN DISBELIEVING THE CLAIM OF THE LOAN TRANSACTION. THE CIT(APPEALS) CONFIRMED THE ORDER OF THE ASSESSING OFFICER. SINCE THE ASSESSEE HAS DISCHARGED THE PRI MARY BURDEN BY ESTABLISHING THE IDENTITY OF THE CREDITOR, GENUINEN ESS OF TRANSACTION AND CREDITWORTHINESS OF CREDITOR, ACCORDING TO THE LD. REPRESENTATIVE, IT IS FOR THE ASSESSING OFFICER TO EXAMINE THE SAME BEFORE MAKING DISALLOWANCE. THEREFORE, ACCORDING TO THE LD. REPR ESENTATIVE, THE 3 I.T.A. NO.179/MDS/16 CIT(APPEALS) IS NOT JUSTIFIED IN CONFIRMING THE ORD ER OF THE ASSESSING OFFICER. 3. ON THE CONTRARY, SH. P. RADHAKRISHNAN, THE LD. D EPARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE CLAIMED THAT HE RECEIVED A SUM OF ` 6 LAKHS ON 09.06.2006 FROM SHRI ROSE SUDHIR PADBIDIRI, THE PROPRIETOR OF M/S NATASHA ENTERPRISE S. THE ASSESSING OFFICER CALLED FOR THE DETAILS WITH REGARD TO THE T RANSACTION INCLUDING THE POSTAL ADDRESS OF M/S NATASHA ENTERPRISES. THE ASSESSEE COULD NOT PRODUCE ANY DETAILS AS CALLED FOR. ACCOR DING TO THE LD. D.R., IN FACT, THERE WAS SEARCH OPERATION UNDER SEC TION 132 OF THE ACT IN THE CASE OF SHRI PRAVEEN KUMAR JAIN. DURING THE COURSE OF SEARCH OPERATION, A SWORN STATEMENT WAS RECORDED FR OM ONE SHRI NILESH PARMER, WHO CLAIMED HIMSELF AS PROPRIETOR OF M/S MOHIT INTERNATIONAL. THE REVENUE AUTHORITIES CAME TO KNO W THAT SHRI NILESH PARMER WAS IN-CHARGE OF 33 DUMMY CONCERNS. IN FACT, THE SAID SHRI NILESH PARMER IS LOOKING AFTER THE 33 DUM MY CONCERNS, INCLUDING M/S NATASHA ENTERPRISES. M/S NATASHA ENT ERPRISES EXISTED ONLY ON PAPER DESPITE HAVING A REGISTERED A DDRESS AND DUMMY PROPRIETOR. SHRI NILESH PARMER USED TO MAKE ENTRIES PERTAINING TO SALE, PURCHASE, ETC. WITHOUT ANY PHYS ICAL MOVEMENT OF 4 I.T.A. NO.179/MDS/16 STOCK IN ANY OF THE 33 CONCERNS, WHICH WERE FOUND T O BE DUMMY ENTRIES AND HAS NOT CARRIED OUT ANY BUSINESS ACTIVI TY OTHERWISE PROVIDING ACCOMMODATION ENTRIES. M/S NATASHA ENTER PRISES, WHICH IS SUBJECT MATTER OF APPEAL IN THIS CASE, WAS THE 2 9 TH CONCERN IN THE LIST. THE ASSESSING OFFICER, AFTER CONSIDERING THE MATERIAL AVAILABLE ON RECORD, ISSUED NOTICE TO M/S NATASHA ENTERPRISES TO FIND OUT THE GENUINENESS OF THE TRANSACTION. IN FACT, THE NOTIC E ISSUED BY THE ASSESSING OFFICER WAS RETURNED BY THE POSTAL AUTHOR ITIES. THIS FACT WAS BROUGHT TO THE NOTICE OF THE ASSESSEE AND THE A SSESSEE COULD NOT PRODUCE ANY FURTHER DETAILS WITH REGARD TO M/S NATASHA ENTERPRISES OR ABOUT SHRI ROSE SUDHIR PADBIDIRI. I N THE ABSENCE OF ANY MATERIAL, THE ASSESSING OFFICER TREATED THE SO- CALLED LOAN OF ` 6 LAKHS AS INCOME OF THE ASSESSEE. THEREFORE, ACCORD ING TO THE LD. D.R., M/S NATASHA ENTERPRISES IS PROVIDING ACCOMMOD ATION ENTRIES ALONG WITH OTHER 32 DUMMY CONCERNS. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. DURING THE COURSE OF SEARCH OPERATION IN THE CASE OF SHRI PRAV EEN KUMAR JAIN, SEVERAL INCRIMINATING MATERIALS WERE FOUND AND THE REVENUE AUTHORITIES HAVE ALSO FOUND THAT 33 CONCERNS WERE C REATED OF WHICH 5 I.T.A. NO.179/MDS/16 M/S NATASHA ENTERPRISES IS ONE AMONG THEM. THE MAJ OR FUNCTION OF 33 CONCERNS IS TO PROVIDE ACCOMMODATION ENTRIES BY CREATING ENTRIES PERTAINING TO SALE AND PURCHASE WITHOUT ANY PHYSICA L MOVEMENT OF THE STOCKS. A COPY OF THE BANK STATEMENT PRODUCED BY THE ASSESSEE, WHICH IS AVAILABLE AT PAGE 4 OF THE PAPER -BOOK, CLEARLY INDICATES THAT THE MONEY DEPOSITED IN THE BANK ACCO UNT WAS ADVANCED TO SEVERAL COMPANIES. THE BANK STATEMENT DOES NOT INDICATE THAT M/S NATASHA ENTERPRISES IS ENGAGED IT SELF IN ANY OF THE BUSINESS ACTIVITY. SHRI PRAVEEN KUMAR JAIN ACCEPTE D DURING THE COURSE OF EXAMINATION UNDER SECTION 132(4) OF THE A CT THAT ALL THE 33 CONCERNS ARE PROVIDING ACCOMMODATION ENTRIES TO VAR IOUS CONCERNS. THE NOTICE ISSUED TO M/S NATASHA ENTERPRISES IN THE ADDRESS GIVEN WAS RETURNED AND THE ASSESSEE COULD NOT FURNISH ANY OTHER DETAILS EVEN THOUGH IT WAS BROUGHT TO HIS NOTICE. THE ENTI TY WHICH WAS EXISTENCE ONLY ON PAPER AND SEVERAL LAKHS OF RUPEES ROUTED THROUGH BANK ACCOUNTS WITHOUT ANY BUSINESS ACTIVITY, CLEARL Y INDICATE THAT WHAT WAS PROVIDED IS ACCOMMODATION ENTRY AND NOT A REAL LOAN. THEREFORE, IT IS OBVIOUS THAT THE ASSESSEE HAS INVE STED THE IMPUGNED LOAN IN THE NAME OF SHRI ROSE SUDHIR PADBI DIRI, SO-CALLED PROPRIETOR OF M/S NATASHA ENTERPRISES. THIS TRIBUN AL IS OF THE CONSIDERED OPINION THAT THE CIT(APPEALS) HAS RIGHTL Y CONFIRMED BY 6 I.T.A. NO.179/MDS/16 THE ADDITION MADE BY ASSESSING OFFICER. THIS TRIBU NAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A PPEALS) AND ACCORDINGLY THE SAME IS CONFIRMED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED ON 7 TH APRIL, 2016 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 7 TH APRIL, 2016. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A) 3, COIMBATORE 4. PRINCIPAL CIT 2, COIMBATORE 5. 69 ,1 /DR 6. :' ; /GF.