MEENA SECUIRITIES PVT. LIMITED, MUMBAI V. ITO 15(2)(3), MUMBAI

ITA 2537/MUM/2019

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 9126 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 24-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Search and seizure; Opportunity of being heard; Additional evidence; Tangible material; Accommodation entries
• Section: 115JB; 133(6); 143(1); 69A; 147; 132; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO . 2537 / MUM . /2019 ( ASSESSMENT YEAR : 20 12 13 ) MEENA SECURITIES PVT. LTD. 237 238, BIG SPLASH SECTOR 17, VASHI NAVI MUMBAI 400 703 PAN AACCM3413A . APPELLANT V/S INCOME TAX OFFICER WARD 15(2)(3), MUMBAI . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI D.G. PANSARI DATE OF HEARING 11 .07.2019 DATE OF ORDER 25.09.2019 O R D E R PER SAKTIJIT DEY, J.M. CAPTIONED APPEAL BY THE ASSESSEE IS AGAINST ORDER DATED 7 TH FEBRUARY 2019, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 24, MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 2012 13. 2 . WHEN THE APPEAL WAS CALLED FOR HEARING, NO ONE WAS PRESENT ON BEHALF OF THE ASSESSEE TO REP RESENT THE CASE. ACCORDINGLY, WE PROCEED TO DISPOSE OFF THE APPEAL EX PARTE QUA THE ASSESSEE AFTER HEARING THE 2 MEENA SECURITIES PVT. LTD. LEARNED DEPARTMENTAL REPRESENTATIVE AND ON THE BASIS OF MATERIAL ON RECORD. 3 . THE CORE ISSUE ARISI NG IN THE PRESENT APPEAL IS RELATING TO THE ADDITION OF ` 50 LAKH MADE UNDER SECTION 69A OF THE INCOME - TAX ACT, 1961 (FOR SHORT 'THE ACT' ). OF COURSE, THERE ARE OTHER LEGAL ISSUE S RAISED BY THE ASSESSEE PERTAINING TO THE VALIDITY OF RE OPENING OF ASSESSMEN T UNDER SECTION 147 OF THE ACT AS WELL AS REJECTION OF ADDITIONAL EVIDENCE BY THE LEARNED COMMISSIONER (APPEALS). 4 . BRIEF FACTS ARE, THE ASSESSEE COMPANY IS STATED TO BE ENGAGED IN THE BUSINESS OF FINANCIAL SERVICES. FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION, THE ASSESSEE FILED ITS RETURN OF INCOME ON 24 TH SEPTEMBER 2012, DECLARING LOSS OF ` 77,563 UNDER THE NORMAL PROVISIONS AND BOOK PROFIT OF ` 44,454 UNDER SECTION 115JB OF THE ACT. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS INITIA LLY PROCESSED UNDER SECTION 143(1) OF THE ACT. SUBSEQUENTLY, A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN CASE OF VIPUL VIDUR BHAT, AND OTHER RELATED ENTITIES ON 5 TH FEBRUARY 21016. IN THE COURSE OF SUCH SEARCH AND SEIZURE OPERATION, A STATE MENT WAS RECORDED UNDER SECTION 132(4) OF THE ACT FROM VIPUL VIDUR BHAT, WHEREIN , HE ACCEPTED THAT HE PROVIDES ACCOMMODATION ENTRIES THROUGH VARIOUS BOGUS ENTITIES/ COMPANIES FLOATED BY HIM. FROM THE INFORMATION GATHERED DURING THE SEARCH AND SEIZURE OPERAT ION, IT WAS FOUND THAT 3 MEENA SECURITIES PVT. LTD. THE ASSESSEE HAD AVAILED LOAN OF ` 50 LAKH FROM P. SAJI TEXTILES LTD., ONE OF THE ENTITIES BELONGING TO VIPUL VIDUR BHAT. ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER RE OPENED THE ASSESSMENT UNDER SECTION 147 OF THE ACT. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO PROVE THE GENUINENESS OF THE LOAN TRANSACTION WITH P. SAJI TEXTILES LTD. FURTHER, TO INDEPENDENTLY VERIFY THE GENUINENESS OF THE SAID TRANSACTION, THE ASSESSING OFFI CER ISSUED A NOTICE UNDER SECTION 133(6) OF THE ACT TO SHRI P. SAJI TEXTILES LTD. AS OBSERVED BY THE ASSESSING OFFIC ER, IN RESPONSE TO THE NOTICE, THE PARTY CONCERNED FURNISHED LOAN CONFIRMATION, COPIES OF INCOME TAX RETURN AND BANK STATEMENT TO SUPPORT TH E LOAN TRANSACTION. THE ASSESSING OFFICER, HOWEVER, RELYING UPON THE STATEMENT OF VIPUL VIDUR BHAT AND OTHER MATERIALS FOUND DURING THE SEARCH AND SEIZURE OPERATION ULTIMATELY CONCLUDED THAT THE ALLEGED LOAN TRANSACTION BETWEEN THE ASSESSEE AND P. SAJI TEX TILES LTD. IS NON GENUINE. FURTHER, HE OBSERVED , ASSESSEES CLAIM THAT IT IS A ONETIME LOAN TAKEN FROM THE PARTY AND WAS ALSO RE PAID CANNOT BE ACCEPTED IN VIEW OF THE INFORMATION AVAILABLE ON RECORD. ACCORDINGLY, HE TREATED THE AMOUNT OF ` 50 LAKH AS UNEX PLAINED MONEY UNDER SECTION 69A OF THE ACT AND ADDED BACK TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED WITH THE AFORESAID ADDITION, THE ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4 MEENA SECURITIES PVT. LTD. 5 . THE LEARNED COMMISSIONER (APPEALS), HOWEVER, AGREED WITH THE DECISION OF THE ASSESSING OFFICER. HE OBSERVED , IN SPITE OF SUFFICIENT OPPORTUNITY GIVEN TO THE ASSESSEE, IT FAILED TO PRODUCE THE LENDER BEFORE THE ASSESSING OFFICER FOR VERIFICATION. HE OBSERVED , EXCEPT SUBMITT ING LOAN CONFIRMATION, BANK STATEMENT, E TC., THE ASSESSEE HAS NOT SUBMITTED ANY OTHER DETAILS TO PROVE THE GENUINENESS OF THE LOAN TRANSACTION. FURTHER, LEARNED COMMISSIONER (APPEALS) REFUSED TO ADMIT THE ADDITION AL EVIDENCES SOUGHT TO BE PRODUCED BY THE ASSESSEE DURING THE APPELLATE P ROCEEDING ON THE REASONING THAT THE ASSESSEE OUGHT TO HAVE SUBMITTED THEM IN COURSE OF ASSESSMENT PROCEEDINGS. THUS, ULTIMATELY, LEARNED COMMISSIONER (APPEALS) UPHELD THE ADDITION MADE BY THE ASSESSING OFFICER. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIE D UPON THE OBSERVATIONS OF LEARNED COMMISSIONER (APPEALS). 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. IT IS RELEVANT TO OBSERVE , ON THE BASIS OF CERTAIN INFORMATION GATHERED IN THE COURSE OF SEARCH AND SEIZURE OPERATION CONDUCTED IN THE CASE OF A THIRD PARTY I.E. VIPUL VIDUR BHAT, IT WAS FOUND THAT ONE OF THE ENTITIES BELONGING TO THE SAID GROUP VIZ. P. SAJI TEXTILES PVT. LTD., HAD PROVIDED LOAN OF ` 50 LAKH TO THE ASSESSEE. RELYING UPON THE STATEMENT RECORDED FROM VIPUL VIDUR BHAT, IT WAS CONCLUDED BY THE ASSESSING OFFICER THAT THE LOAN OBTAINED BY THE ASSESSEE IS NOTHING BUT 5 MEENA SECURITIES PVT. LTD. ACCOMMODATION ENTRY, HENCE, NON GENUINE. HOWEVER, IT IS A FACT ON RECORD THAT IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT BY T HE ASSESSING OFFICER, THE LENDER HAS FURNISHED LOAN CONFIRMATION, COPIES OF INCOME TAX RETURN, BANK STATEMENT, ETC. OF COURSE , IT IS A FACT THAT THE ASSESSEE WAS UNABLE TO PRODUCE THE LENDER BEFORE THE ASSESSING OFFICER. IT IS ALSO OBSERVED , BEFORE LEARNED COMMISSIONER (APPEALS) THE ASSESSEE HAD FURNISHED SOME MORE DOCUMENTARY EVIDENCE S BY WAY OF ADDITIONAL EVIDENCE AND THROUGH A SEPARATE APPLICATION HAS SOUGHT ADMISSION OF SUCH EVIDENCE S . THE EVIDENCE SOUGHT TO BE PRODUCED ARE AS UNDER: I ) CONFIRMATION ACCOUNTS AND ITR V COPY AND BANK STATEMENT OF SAMPADA CHEMICALS LTD. & VICTORY SALES PVT. LTD. IN SUPPORT OF SOURCE OF LENDER P. SAJI TEXTILES LTD.; II ) AN AFFIDAVIT OF THE DIRECTOR VISHRUT TRIPATHI DATED 05.11.2018; III ) SHARE APPLICATION LETTER AND RESOLUTION A ND BANK STATEMENT OF PSTL IN SUPPORT OF THE FACT, THE SAID PSTL SUBSCRIBED TO THE SHARE CAPITAL OF YOUR APPELLANT AND CONTINUES TO BE THE SHAREHOLDER OF YOUR APPELLANT; IV ) ROC DOCUMENT OF PSTL BEING ADT 1, AOC 4XBRL, CS CERTIFICATE, REGISTRATION ON CHARGE, L IST OF SHAREHOLDERS, FORM 32, DIR 12 (PUBLIC DOMAIN, DOWNLOADED FORM ROC); V ) FINANCIAL STATEMENT OF PSTL AS AT 31.03.2017 WITH COPY OF ANNUAL REPORT AND OTHER REPORTS (IN PUBLIC DOMAIN, DOWNLOADED FROM ROC). 8 . HOWEVER, LEARNED COMMISSIONER (APPEALS) HAS REF USED TO ADMIT THEM AS ADDITIONAL EVIDENCE SIMPLY ON THE REASONING THAT THEY WERE 6 MEENA SECURITIES PVT. LTD. NOT PRODUCED BEFORE THE ASSESSING OFFICER. IN OUR VIEW, IF THE ASSESSEE FURNISHES SOME ADDITIONAL EVIDENCES, IT SHOULD NOT BE REJECTED MECHANICALLY WITHOUT EXAMINING WHETHER T HEY HAVE A CRUCIAL BEARING IN DECIDING THE ISSUE. THEREFORE, LEARNED COMMISSIONER (APPEALS) SHOULD HAVE DIRECTED THE ASSESSING OFFICER TO EXAMINE THE FRESH EVIDENCE S SUBMITTED BY THE ASSESSEE AND FURNISH A REPORT TO HIM. BY DEBARRING THE ASSESSEE FROM FURN ISHING THE ADDITIONAL EVIDENCE S DEPRIVES IT OF A FAIR OPPORTUNITY OF BEING HEARD. THEREFORE, WITHOUT EXPRESSING ANY OPINION EITHER ON THE AUTHENTICITY OF THE ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE OR EVEN THE MERITS OF THE ADDITION MADE, WE ARE OF T HE CONSIDERED OPINION THAT THE ISSUE REQUIRES DE NOVO ADJUDICATION BY THE ASSESSING OFFICER AFTER CONSIDERING ALL THE EVIDENCES FILED BY THE ASSESSEE INCLUDING THE FRESH EVIDENCES FILED BEFORE LEARNED COMMISSIONER (APPEALS). 9 . AS REGARDS THE VALIDITY OF RE OPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT, ADMITTEDLY, SUCH RE OPENING IS ON THE BASIS OF FRESH TANGIBLE MATERIAL AVAILABLE BEFORE THE ASSESSING OFFICER TO FORM A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THAT BEING THE CASE, W E DO NOT FIND ANY INFIRMITY IN THE ACTION OF THE ASSESSING OFFICER IN EXERCISING POWER UNDER SECTION 147 OF THE ACT. THEREFORE, ASSESSEES GROUND ON RE OPENING OF ASSE SSMENT DESERVES 7 MEENA SECURITIES PVT. LTD. TO BE DISMISSED. WHEREAS , ALL OTHER GROUNDS ARE ALLOWED FOR STATISTICAL P URPOSES. 10 . IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 25.09.2019 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 25.09.2019 COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI