Khadkeshwar Oil Mills Pvt.Ltd, Aurangabad V. Income-tax Officer, Ward - 1(2), Aurangabad

ITA 1864/PUN/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5478 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 14-03-2019
• Assessment Year: 2010-2011
• Appeal Filed On: 06-12-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bogus Share capital; Accommodation entries
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT . / ITA NO.1863/PUN/2018 / ASSESSMENT YEAR : 2010-11 HIGH TECH HERBALS (INDIA) PVT. LTD., 108-110, SIDDHARTHA ARCADE, OPP. HOLIDAY CAMP, STATION ROAD, AURANGABAD 431 005 PAN : AABCH2522A VS. ITO, WARD-1(1), AURANGABAD (APPELLANT) (RESPONDENT) . / ITA NO.1864/PUN/2018 / ASSESSMENT YEAR : 2010-11 KHADKESHWAR OIL MILLS PVT. LTD., 2 ND FLOOR, SIDDHARTHA ARCADE, 108-110, OPP. MTDC, AURANGABAD-431001 PAN : AABCK4839R VS. ITO, WARD-1(2), AURANGABAD (APPELLANT) (RESPONDENT) . / ITA NO.1865/PUN/2018 / ASSESSMENT YEAR : 2010-11 MARUTI TYRES PRIVATE LIMITED, J 1/10, MIDC AREA, CHIKALTHANA, AURANGABAD 431 136 PAN : AADCM5819P VS. ITO, WARD-1(2), AURANGABAD (APPELLANT) (RESPONDENT) ITA NOS.1863 TO 1865/PUN/2018 A.Y. 2010-11 2 / ORDER PER R.S.SYAL, VP : THESE APPEALS BY THE DIFFERENT BUT RELATED COMPANIES RELATE TO THE ASSESSMENT YEAR 2010-11. SINCE A COMMON ISSUE IS RAIS ED IN ALL THESE APPEALS, I AM, THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. THE SOLITARY ISSUE RAISED IN THESE APPEALS IS AGAINST THE CONFIRMATION OF ADDITION OF RS.25.00 LAKH EACH MADE BY THE ASSESSING OFFICER (AO) U/S. 68 OF THE INCOME-TAX ACT, 196 1 (HEREINAFTER ALSO CALLED `THE ACT) IN THE HANDS OF ALL THE THR EE ASSESSEES. 3. BRIEFLY STATED, THE FACTS FOR ITA NO.1863/PUN/2018 IN RES PECT OF HIGH TECH HERBALS (INDIA) PVT. LTD. ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN TRADING IN HERBAL PRODUCTS . ASSESSMENT WAS REOPENED ON THE BASIS OF SEARCH AND SU RVEY CARRIED OUT IN THE CASE OF SHRI PRAVEEN K. JAIN AND HIS GROUP ON 0 1-10-2013 BY THE DIRECTORATE OF INVESTIGATION, MUMBAI, WHICH TRANSPIRED THAT APPELLANT BY NONE RESPONDENT BY SHRI RAJESH GAWALI DATE OF HEARING 15-05-2019 DATE OF PRONOUNCEMENT 16-05-2019 ITA NOS.1863 TO 1865/PUN/2018 A.Y. 2010-11 3 SHRI PRAVEEN K. JAIN WAS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES, SUCH AS, BOGUS UNSECURED LOANS, BOGUS SHARE APPLICATION MONEY AND BOGUS SALES THROUGH A WEB OF CONCERNS. ONE OF SUCH CONCERNS OF SHRI PRAVEEN K. JAIN IS M/S NAKSHATRA BUSINESS PVT. LTD. THE ASSESSEE DECLARED TO HAVE RECEIVED SHARE APPLICA TION MONEY FROM THIS COMPANY TO THE TUNE OF RS.25.00 LAKH. N OTICE U/S.148 WAS ISSUED. THE AO NOTED THAT THE ASSESSEE ALLEGED LY ISSUED ITS 50,000 SHARES TO M/S. NAKSHATRA BUSINESS PVT. LTD. AT RS. 50 PER SHARE WITH FACE VALUE OF RS.10/- AND PREMIUM OF RS.40/- PER SHARE. THE AO HAS EXTENSIVELY REPRODUCED THE STATEMENT OF SHRI PRA VEEN K. JAIN IN THE ASSESSMENT ORDER, IN WHICH THE LATTER ADMITTED TO BE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES ROUTED THROUGH H IS WEB OF COMPANIES. HE FURTHER ADMITTED THAT THESE WERE ONLY PAPER TRANSACTIONS IN THE GARB OF SHARE APPLICATION MONEY/SHARE CA PITAL ETC. HE FURTHER EXPLAINED THE MODUS OPERANDI OF ISSUING ACCOMMODATION ENTRIES AT A COMMISSION OF 0.25% OF TOTAL VALUE OF TRANSACTION . THE AO CONFRONTED THE STATEMENT OF SHRI PRAVEEN K. JAIN TO THE A SSESSEE AND REQUIRED HIM TO SHOW AS TO WHY THE BOGUS SHARE APPLIC ATION MONEY OF RS.25.00 LAKH BE NOT ADDED TO ITS TOTAL INCOME. TH E ASSESSEE DENIED TO HAVE RECEIVED ANY ACCOMMODATION ENTRY DESPITE THE FACT THAT THE NAME OF M/S. NAKSHATRA BUSINESS PVT. LTD. W AS ITA NOS.1863 TO 1865/PUN/2018 A.Y. 2010-11 4 THERE IN THE LIST OF COMPANIES OF SH. PRAVEEN JAIN ALLEGEDLY GIVIN G BOGUS ENTRIES. CONSIDERING ALL THESE FACTS, THE AO TREATED M/S. NAKSHATRA BUSINESS PVT. LTD. AS A SHELL COMPANY AND ACCORD INGLY MADE AN ADDITION OF RS.25.00 LAKH IN THE HANDS OF THE AS SESSEE. NO RELIEF WAS ALLOWED IN THE FIRST APPEAL. AGGRIEVED BY THE SAME , THE ASSESSEE HAS COME UP IN APPEAL BEFORE THE TRIBUNAL. 4. THE FACTS OF ITA NO.1864/PUN/2018 IN RESPECT OF KHADKESHWAR OIL MILLS PVT. LTD. ARE SIMILAR. HERE AGAIN, THE ASSESSEE COMPANY INTRODUCED RECEIPT OF SHARE APPLICATION MO NEY OF RS.25.00 LAKH BY ISSUING 50,000 SHARES WITH FACE VALUE O F RS.10/- AT A PREMIUM OF RS.40/-. THE ALLEGED SHARE APPLICANT IN THIS C ASE IS TRIANGULAR INFOCOM LTD. WHICH IS ALSO ONE OF THE COMPANIES OPERATED BY SHRI PRAVEEN K. JAIN. THE AO MADE ADDITION IN TH E SIMILAR MANNER, WHICH GOT CONFIRMED BY THE LD. CIT(A) ALSO . 5. IN SO FAR AS ITA NO.1865/PUN/2018 IN RESPECT OF MARUTI TYRES PVT. LTD., IS CONCERNED, HERE AGAIN IT IS FOUND THAT THE FACTUAL POSITION IS SIMILAR. THE ASSESSEE COMPANY INTRODUCED RECE IPT OF SHARE APPLICATION MONEY OF RS.25.00 LAKH BY ISSUING 50,000 SHARES WITH FACE VALUE OF RS.10/- AT A PREMIUM OF RS.40/-. THE ALLEGED SHARE APPLICANT IN THIS CASE IS ALKA DIAMOND INDUSTRIES PVT. LTD. ITA NOS.1863 TO 1865/PUN/2018 A.Y. 2010-11 5 WHICH IS ALSO ONE OF THE COMPANIES OPERATED BY SHRI PRAVEEN K. JAIN. THE AO MADE ADDITION OF RS.25.00 LAKH, WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. 6. AGGRIEVED BY THE CONFIRMATION OF ADDITION ON THIS COMMON SOLITARY ISSUE, THE THREE ASSESSEES HAVE COME UP IN APPEA L BEFORE THE TRIBUNAL. 7. I HAVE HEARD THE LD. DR AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THESE THREE APPEALS WERE FIXED FOR HEARING F OR THE FIRST TIME ON 18-02-2019 WHEN THE ASSESSEES WERE NOT REPRESE NTED. THESE APPEALS WERE ADJOURNED TO 13-03-2019 AND 14-03-2 019. ON THE NEXT DATES, AN ADJOURNMENT APPLICATION WAS MOVED BY THESE ASSESSEES THROUGH EMAIL. THE ADJOURNMENT WAS GRANTED AND THE APPEALS WERE ADJOURNED FOR TODAY. NONE HAS APPEARED TO DAY ON BEHALF OF THE ASSESSEE, NOR ANY ADJOURNMENT APPLICATION HA S BEEN FILED. IN SUCH CIRCUMSTANCES, I AM PROCEEDING TO DISPOSE THESE APPEALS EX PARTE QUA THE ASSESSEES. 8. IT IS OBSERVED FROM THE FACTS THAT ALL THE THREE COMPANIES HAVE ALLEGEDLY RECEIVED SHARE APPLICATION MONEY OF RS.25.00 LAKH FROM THREE BOGUS COMPANIES OPERATED BY SHRI PRAVEEN K. JAIN. T HERE IS UNIFORM PATTERN IN ALL THE THREE COMPANIES IN WHICH SHARES OF FACE ITA NOS.1863 TO 1865/PUN/2018 A.Y. 2010-11 6 VALUE OF RS.10/- WERE ALLEGEDLY ISSUED AT A PREMIUM OF RS .40/- PER SHARE. SEARCH AND SURVEY ACTION ON SHRI PRAVEEN K. JAIN A MPLY PROVED, RATHER IT WAS ADMITTED BY HIMSELF, THAT HE WAS ENGA GED IN PROVIDING ACCOMMODATION ENTRIES THROUGH A WEB OF HIS BOGUS COMPANIES, WHICH WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES TO VARIOUS ASSESSES. THE ASSESSEES IN APPEAL ARE ALSO BENEFICIARIES OF SUCH ACCOMMODATION ENTRIES IN THE FORM OF SHARE APPLICATION MONEY FROM THE COMPANIES OF SH. PRAVEEN K. JAIN . THE AUTHORITIES BELOW HAVE DISCUSSED THE ISSUE THREADBARE BEFORE MAKING AND CONFIRMING THE ADDITIONS. IN THE ABSENCE OF ASSESSEES FURNISHING ANY FURTHER EVIDENCE TO SUBSTANTIATE THE CLAIM OF GENUINENES S OF THE TRANSACTIONS, I UPHOLD THE IMPUGNED ORDERS. 9. IN THE RESULT, ALL THE THREE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MAY, 2019. SD/- (R.S.SYAL) / VICE PRESIDENT PUNE; DATED : 16 TH MAY, 2019 ITA NOS.1863 TO 1865/PUN/2018 A.Y. 2010-11 7 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT (APPEALS)-1, AURANGABAD 4. THE PR. CIT-1, AURANGABAD 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. // TRUE COPY // / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 15-05-2019 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 15-05-2019 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *