VIJAY PROJECT CONSULTANTS AND LAND DEVELOPERS PVT. LTD., MUMBAI V. ITO 2(3)(4), MUMBAI

ITA 2828/MUM/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7673 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 04-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Keywords: Unexplained cash credit; Accommodation entries; Bogus loan
• Section: 143(3); 133(6); 147; 148; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI , JUDICIAL MEMBER ITA NO.2828/MUM/2018 (ASSESSMENT YEAR: 2009 - 10) & ITA NO.2829/MUM./2018 (ASSESSMENT YEAR: 2011 - 12 ) M/S. VIJAY PROJECT CONSULTANTS & LAND DEVELOPERS PVT. LTD., 32, APOLLO STREET, FORT, MUMBAI 400 023 PAN NO: AABCV3261G . APPELLANT V/S ITO 2(3)(4) AAYAKAR BHAVAN M.K.ROAD MUMBAI - 400 020 . RESPONDENT ASSESSEE BY : NONE REVENUE BY : SHRI C.S. ANJARIA DATE OF HEARING 14/01/2019 DATE OF ORDER - 04 / 04 /2019 O R D E R PER: SHAMIM YAHYA : (AM) THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE RESPECTIVE ORDER OF LEARNED CIT(A) PERTAINING TO A.Y. 2009 - 10 AND 2011 - 12. 2. GROUNDS OF APPEAL REA D AS UNDER FOR A.Y. 2009 - 10: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT (A) GROSSLY ERRED IN UPHOLDING THE ADDITION OF RS. 35,00,000/ - U/S 68 OF THE INCOME TAX ACT, 1961 BY TREATING THE GENUINE LOAN TAKEN FROM M/S. AWESOME PACKING PVT. LTD & PAREKH E STATE & PROPERTIES PVT. LTD AS ALLEGED UNEXPLAINED CASH CREDIT ON THE BASIS 2 ITA NO.2829/MUM/2018 & 2828/MUM/2018 M/S. VIJAY PROJECT CONSULTANTS & LAND DEVELOPERS PVT. LTD., 2 OF INFORMATION RECEIVED FROM THE OFFICE OF ADDITIONAL DIRECTORS OF INCOME TAX (INV.) UNIT - 4, MUMBAI, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT PRA YS THAT THE SAID ADDITION IS UNJUSTIFIED AND MAY PLEASE BE DELETED. 3. GROUNDS OF APPEAL FOR A.Y. 2011 - 12 : - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE TEAMED CIT (A) GROSSLY ERRED IN UPHOLDING THE ADDITION OF RS. 35,00,OOO/ - U/S 6& OF THE INCOME TAX ACT, 1961 BY TREATING THE GENUINE LOAN TAKEN FROM H/S, MICHIGAN TRADERS PVT. LTD AS ALLEGED UNEXPLAINED CASH CREDIT ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF ADDITIONAL DIRECTORS OF INCOME TAX (INV.) UNIT - 4, MUMBAI, WITHOUT CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE. THE APPELLANT PRAYS THAT THE SAID ADDITION IS UNJUSTIFIED AND MAY PLEASE BE DELETED. 4. BRIEF FACTS : SINCE FACTS ARE IDENTICAL WE ARE REFERRING TO FACTS AND FIGURES FROM A.Y. 200 9 - 10: - THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSES COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION. THE ASSESSEE COMPANY E - FILED ITS RETURN OF INCOME FOR A.Y.2009 - 10 ON 27.09.2009 DECLARING TOTAL LOSS FOR THE YEAR AT RS.NIL. THE CASE WAS REOP ENED UNDER SECTION 147 ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF ADIT(LNV.) UNIT - 4(2), MUMBAI AND NOTICE U/S.148 WAS ISSUED ON 29.03.2016 AFTER RECORDING THE REASONS, REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME. AS PER INFORMATION GIV EN BY THE INVESTIGATION WING, THE ASSESSEE COMPANY, HAD RECEIVED UNSECURED LOANS FROM BOGUS PARTI ES TO THE TUNE OF RS. 35,00,000/ - IN THE FINANCIAL YEAR RELEVANT TO A.Y.2009 - 10. THE AO COMPLETED THE ASSESSMENT U/S. 143(3) R.W.S.147 ON 14.12.2016 DETERMINING TOTAL INCOME AT RS.35,00,000/ - . IN THE ASSESSMENT SO COMPLETED, THE AO MADE ADDITION OF RS.35,00,000/ - U/S. 68 OF THE ACT ON ACCOUNT OF BOGUS LOANS RECEIVED. ON THE BASIS OF INFORMATION RECEIVED FROM THE OFFICE OF ADIT(INV,) UNIT - 4(2), MUMBAI, NOTICE U/S. 148 OF THE ACT WAS ISSUED ON 29.03.2016 AFTER RECORDING REASONS, REQUIRING THE ASSESSEE TO FILE THE RETURN OF INCOME. THE ASSESSEE E - FILED ITS RETURN OF INCOME FOR A.Y.200 9 - 10 ON 27.09.2009 DECLARING TOTAL LOSS FOR THE YEAR AT RS.NIL. AS PER THE INFORMATION RECEIVED FROM THE INVESTIGATION WING, ASSESSEE HAD CLAIMED TO HAVE RECEIVED UNSECURED LOANS WORTH RS.25,00,000/ - FROM M/S. AWESOME PACKAGING PVT. LTD. AND RS. 10,00,000/ - FROM M/S. PAREKH ESTATE & PROPERTIES PVT. LTD. THE AO ISSUED NOTICES U/S. 133(6) TO VERIFY THE GENUINENESS OF THE LOANS. HOWEVER, THE NOTICES SENT TO THE ADDRESSES OF THE PARTIES PROVIDED BY THE ASSESSEE WERE RETURNED UNSERVED. THEREAFTER, THE AO BROUGHT THIS FACT TO THE NOTICE OF THE LEARNED AUTHORIZED REPRESENTATIVE OF THE ASSESSEE THAT THE NOTICES WERE RETURNED UNSERVED FROM THE ADDRESSES OF THE PARTIES PROVIDED BY THE ASSESSEE. THE AO FURTHER OBSERVED THAT AS PER THE INFORMATION GIVEN BY THE INVESTIGA TION WING, DURING THE COURSE OF SURVEY PROCEEDINGS, IN THE CASE OF M/S. NINA CONCRETE SYSTEMS PVT. LTD., THE DIRECTOR OF M/S.NINA CONCRETE SYSTEMS PVT. LTD., MR. MEHUL KIRIT PARIKH HAS ADMITTED TO AND GIVEN STATEMENT UNDER OATH ON 29.09,2014 THAT OF HIS GR OUP 3 ITA NO.2829/MUM/2018 & 2828/MUM/2018 M/S. VIJAY PROJECT CONSULTANTS & LAND DEVELOPERS PVT. LTD., 3 COMPANIES, M/S.VIJAY PROJECT CONSULTANTS AND LAND DEVELOPERS LTD. I.E. THE ASSESSEE COMPANY, HAS RECEIVED UNSECURED LOANS FROM BOGUS PARTIES OF RS.35,00,000/ - IN THE FINANCIAL YEAR RELEVANT TO A.Y.2009 - 10. IN VIEW OF SUCH FACTS, THE AUTHORIZED REPRESEN TATIVE OF THE ASSESSEE, WAS ASKED BY THE AO TO EXPLAIN AS TO WHY THESE LOANS CLAIMED TO HAVE BEEN RECEIVED DURING THE FINANCIAL YEAR RELEVANT TO A.Y.2009 - 10, SHOULD NOT BE TREATED AS BOGUS AND THEREBY DISALLOWED AND ADDED BACK TO THE TOTAL INCOME OF THE AS SESSEE. WHEN CONFRONTED WITH THE ABOVE STATEMENT, THE ASSESSEE IN HIS LETTER EXPLAINED THAT ALL THE THREE ASPECTS I.E. IDENTITY, CREDITWORTHINESS OF THE CREDITOR AND THE GENUINENESS OF THE TRANSACTION HAS ALREADY BEEN VERIFIED U/S. 133(6) OF THE ACT WHERE THE PARTIES CONFIRMED THAT THE ASSESSEE HAD TAKEN UNSECURED LOANS AND HENCE IT WAS REQUESTED NOT TO MAKE ADDITION U/S,68 OF THE ACT. THE AO CONSIDERED SUCH REPLY OF THE ASSESSEE AND OBSERVED THAT NOTICES ISSUED U/S. 133(6) TO THE PARTIES WERE RETURNED UNSE RVED BUT THE CONFIRMATIONS WERE SUBMITTED BY THE ASSESSEE ITSELF. SHE FURTHER OBSERVED THAT NOTICES ISSUED TO THE PARTIES WHOSE ADDRESSES THE ASSESSEE ITSELF HAS PROVIDED WERE RETURNED UNSERVED AND THIS DOES NOT SUFFICIENTLY PROVE THE GENUINENESS, CREDITWO RTHINESS AND THE IDENTITY OF THE PARTIES CONCERNED. SHE FURTHER OBSERVED THAT THOUGH THE ASSESSEE HAS PROVIDED THE CONFIRMATION, THE FACTS REMAINED THAT THE DIRECTOR OF M/S.NINA CONCRETE SYSTEMS PVT LTD., MR. MEHUL KIRIT PARIKH HAD ADMITTED TO AND GIVEN ST ATEMENT UNDER OATH ON 29.09.2014 THAT ONE OF HIS GROUP COMPANIES, M/S.VIJAY PROJECT CONSULTANTS AND LAND DEVELOPERS LTD. I.E. THE ASSESSEE COMPANY HAD RECEIVED UNSECURED LOANS FROM BOGUS PARTIES OF RS.35,00,000/ - IN THE FINANCIAL YEAR RELEVANT TO A.Y.2009 - 10. IN VIEW OF THE ABOVE, THE AO MADE ADDITION OF RS.35,00,000/ - U/S.68 OF THE ACT. 5. UPON ASSESSEE'S APPEAL LEARNED CIT(A) CO NFIRMED THE ADDITION HOLDING AS UNDER : - 6.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, DISCUSSION OF THE AO IN THE ASSESSMENT ORDER, ORAL CONTENTIONS AND WRITTEN SUBMISSION OF THE APPELLANT AND MATERIAL AVAILABLE ON RECORD, IT IS SEEN THAT ASSESSEE IN THE ELABORATE SUBMISSION WHICH IS MORE ON THE GENERALITY OF THE ISSUE AND THE CASE LAWS, HAS NOT REBUTTED THE FACT S REGARDING THE STATEMENT GIVEN BY SHRI MEHUL KIRIT PARIKH, WHO INCIDENTALLY IS ALSO A DIRECTOR OF THE ASSESSEE COMPANY. IT IS THIS STATEMENT WHICH HAS BEEN REFERRED TO BY THE AO AT PARA 5.2 OF THE ASSESSMENT ORDER. IN THE SUBMISSION, THE ASSESSEE HAS STAT ED THAT THEY HAVE PROVIDED COPY OF CONFIRMATION OF LOAN, COPY OF BALANCE - SHEET, PROFIT AND LOSS ACCOUNT OF THE PARTIES FROM WHOM UNSECURED LOAN WAS RECEIVED, COPY OF BANK STATEMENT HIGHLIGHTING THE TRANSACTION, COPY OF BALANCE - SHEET AND PROFIT AND LOSS ACC OUNT OF THE APPELLANT AND COPY OF THE JURISDICTION OF THE PARTIES, IN RESPECT OF SUCH SUBMISSIONS, IT IS STATED THAT DESPITE THE SUBMISSION OF THESE DOCUMENTS BEFORE THE ASSESSING OFFICER AS WELL AS DURING THE INSTANT PROCEEDINGS, IT HAS NOT BEEN STATED AS TO WHY THE NOTICE ISSUED U/S. 133(6) TO THESE PARTIES WERE RETURNED BACK UNSERVED. AFTER THE NOTICES WERE ISSUED BY THE AO U/S. 133(6) TO SUCH PARTIES WHO HAD APPARENTLY GIVEN LOAN TO THE ASSESSEE AND WHEN THE NOTICES WERE RETURNED UNSERVED, THE FACT WAS CONFRONTED TO THE LD. AR OF THE ASSESSEE BY THE AO AGAINST WHICH NO SATISFACTORY RESPONSE WAS GIVEN BY THE LD. AR OF THE APPELLANT TO THE AO. IT IS FURTHER SEEN FROM THE DOCUMENTS SUBMITTED THAT THE SO - CALLED LOAN CONFIRMATION SUBMITTED FROM M/S.AWESOME PA CKAGING PVT. LTD. IS A PHOTOCOPY OF A COMPUTER - GENERATED DOCUMENT. IT IS FURTHER SEEN FROM THE COPY OF THE BALANCE - SHEET ENCLOSED OF THE SAID LENDER, THAT THE SCHEDULE 6 OF THE BALANCE - SHEET IS 4 ITA NO.2829/MUM/2018 & 2828/MUM/2018 M/S. VIJAY PROJECT CONSULTANTS & LAND DEVELOPERS PVT. LTD., 4 IN RESPECT OF LOANS AND ADVANCES WHEREIN THE TOTAL LOANS AND ADVANCES ARE ONLY AT RS.14,50,000/ - . IT ID THIS PARTY IN RESPECT OF WHOM, ASSESSEE CONTENDS TO HAVE RECEIVED LOAN OF RS.25,00,000/ - . IT IS NOT UNDERSTOOD WHEN THE TOTAL LOANS AND ADVANCES AS PER SCHEDULE 6 OF THE LENDER'S BALANCE - SHEET IS ONLY TO THE TUNE OF RS.14,50,000/ - , THEN HOW A LOAN COULD BE CONSIDERED TO HAVE BEEN GIVEN OF RS.25,00,000/ - TO THE ASSESSES. DURING THE YEAR, THE ASSESSEE HAS ALSO SHOWN A LOAN TO HAVE BEEN RECEIVED OF RS. 10,00, 000 / - FROM PAREKH ESTATE AND PROPERTIES PVT. LTD. THE ASSESS ING OFFICER HAD ISSUED NOTICE U/S. 133{6) TO THIS PARTY AS WELL WHICH WAS RETURNED BACK UNSERVED. WHEN CONFRONTED WITH THIS FACT, THE ID. AR OF THE APPELLANT COULD NOT GIVE ANY SATISFACTORY REPLY TO THE ASSESSING OFFICER. IT IS SEEN FROM THE DETAILS AND DO CUMENTS SUBMITTED BY THE APPELLANT DURING THE COURSE OF INSTANT PROCEEDINGS, THAT THE SO - CALLED CONFIRMATION SUBMITTED IN RESPECT OF PAREKH ESTATE AND PROPERTIES PVT. LTD. WAS A PHOTOCOPY OF A COMPUTER - GENERATED SHEET AND IN THE ACCOMPANYING BALANCE - SHEET AT SCHEDULE 6, THE LOANS AND ADVANCES HAS BEEN SHOWN TO BE AT RS.44,00,000/ - . HOWEVER, NO DETAILS WHATSOEVER HAVE BEEN GIVEN IN RESPECT OF SUCH LOANS AND ADVANCES RECEIVABLE BY THE ASSESSEE AS TO IN RESPECT OF WHICH PARTIES THE SO - CALLED LOANS AND ADVANCES PERTAINED TO. IT IS FURTHER MENTIONED HERE THAT DURING THE COURSE OF INSTANT PROCEEDINGS, THE LD. AR OF THE APPELLANT WAS SPECIFICALLY ASKED WHETHER THEY ARE RETRACTING FROM THE STATEMENT OF THE DIRECTOR OF THE COMPANY, SHRI MEHUL KIRIT PARIKH DATED 29.09 .2014 REFERRED TO BY THE AO AT PARA 5.2 OF THE ASSESSMENT ORDER. THE LD. AR OF THE APPELLANT STATED THAT THEY ARE NOT RETRACTING FROM THE STATEMENT SO GIVEN. THIS HAS BEEN SPECIFICALLY NOTED ON THE ORDER - SHEET DATED 12.01.2018 WHICH HAS BEEN DUTY SIGNED BY THE LEARNED AUTHORIZED REPRESENTATIVE OF THE APPELLANT. IN THIS FACTUAL BACKDROP AS HAS BEEN MENTIONED HEREINABOVE, THE CONTENTIONS RAISED BY THE APPELLANT IN THEIR SUBMISSION REGARDING THE THREE CARDINAL ASPECTS OF IDENTITY, CREDITWORTHINESS AND GENUINEN ITY OF THE QUESTIONED TRANSACTION LOSE THEIR RELEVANCE. THE VERY FACT THAT THE NOTICES U/S. 133(6) ISSUED BY THE AO WERE RETURNED UNSERVED AND APPELLANT COULD NOT GIVE ANY SATISFACTORY REPLY TO THE AO AS TO WHY THOSE LETTERS WERE RETURNED UNSERVED CLEARLY PUT THE ASPECT OF IDENTITY INTO SEVERE DOUBTS. MERE SUBMISSION OF AN UNAUTHENTICATED LETTER OF CONFIRMATION OR COPY OF FINAL ACCOUNTS WHICH DO NOT SHOW SPECIFICALLY THAT THE ASSESSEE WAS GIVEN THE QUESTIONED LOANS BY THEM COUPLED WITH THE STATEMENT OF THE DIRECTOR OF THE COMPANY ADMITTING TO HAVE RECEIVED SUCH CASH CREDITS FROM THE BOGUS PARTIES AND FURTHER ASSERTION MADE DURING THE INSTANT PROCEEDINGS THAT THEY ARE NOT RETRACTING FROM THE SAID STATEMENT DATED 29.09.2014 OF SHRI MEHUL KINT PARIKH, DIRECTOR OF THE ASSESSEE COMPANY, CLEARLY PROVE THAT THE QUESTIONED SUM OF RS.35,00,000/ - RECEIVED FROM SUCH PARTIES I.E. AWESOME PACKAGING PVT. LTD, AND PAREKH ESTATE AND PROPERTIES PVT. LTD. IS NOTHING BUT A CASH CREDIT WITHIN THE MEANING OF SECTION 68 OF THE ACT AND THEREFORE, MAKING ADDITION OF THE QUESTIONED SUM IS FOUND TO BE JUSTIFIABLE AND IS ACCORDINGLY, UPHELD. GROUND NO.L IS ACCORDINGLY, DISMISSED. 6. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BEFORE US. 5 ITA NO.2829/MUM/2018 & 2828/MUM/2018 M/S. VIJAY PROJECT CONSULTANTS & LAND DEVELOPERS PVT. LTD., 5 7. WE HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORDS. NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE NOTICE. 8. UPON CAREFUL CONSIDERATION WE FIND THAT THE ASSESSEE HAS RECEIVED UNSECURED LOAN FROM DIFFERENT PARTIES IN BOTH THE ASSESSMENT YEARS. DUE INFORMATION HAS B EEN RECEIVED AND THE ENQUIRY BY THE ASSESSING OFFICER DULY PROVED THAT THESE ARE ACCOMMODATION ENTRIES. ASSESSING OFFICER DULY ISSUED NOTICES AND ASSESSEE HAS NOT AT ALL BEEN ABLE TO PROVE THE IDENTITY OF THE PARTIES. ELABORATE ENQUIRY BY THE ASSESSING OFF ICER DULY PROVED THAT ASSESSEE IS RECIPIENT OF BOGUS ACCOMMODATION ENTRY IN THE GARB OF UNSECURED LOAN. THE VIEW OF THE AUTHORITIES BELOW IS DULY SUPPORTED BY THE DECISION OF HON'BLE APEX COURT IN THE CASE OF PR.CIT VS. NRA IRON AND STEEL PVT. LTD. (APPEAL NO. 29855/2018 VIDE ORDER DATED 5.3.2019) 9. IN THIS DECISION IT WAS DULY EXPOUNDED THAT BY MERELY PRODUCING DOCUMENTARY EVIDENCE ASSESSEE IS NOT RELIEVED OF ITS ONUS PROVE THAT IT IS NOT A PARTY TO THE RECEIPT OF ACCOMMODATION ENTRIES, IF ASSESSING OFF ICER'S ENQUIRY DULY PROVE THE BOGUS NATURE OF TRANSACTION. ACCORDINGLY, WE DON'T FIND ANY INFIRMITY IN THE WELL REASONED ORDERS OF THE AUTHORITIES BELOW. ACCORDINGLY, WE CONFIRM THE SAME. 10. IN THE RESULT, APPEALS FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 0 4 / 0 4 /2019 S D / - S D / - RAM LAL NEGI SHAMIM YAHYA JUDICIAL MEMBER ACCOUNTANT MEMBER 6 ITA NO.2829/MUM/2018 & 2828/MUM/2018 M/S. VIJAY PROJECT CONSULTANTS & LAND DEVELOPERS PVT. LTD., 6 MUMBAI, DATED: 0 4 / 0 4 / 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. BY ORDER KARUNA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI