NEMINATH MUMBAI SHELTER, MUMBAI V. DCIT, CC- 1(3), MUMBAI

ITA 2952/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 5774 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR SONI
• Keywords: Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 2952/MUM/2018 ASSESSMENT YEAR : 2011-12 NEMINATH MUMBAI SHELTER, 101/102, KALPAK APARTMENT, ROAD NO. 16, SIDHARTH NAGAR, GOREGAON (W), MUMBAI [PAN : AAAAN4781G] VS. DCIT, CENTRAL CIRCLE-1(3), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI VIJAY KUMAR SONI, DR DATE OF HEARING : 28-01-2019 DATE OF PRONOUNCEMENT : 30-01-2019 O R D E R THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCO ME TAX(APPEALS)-47, MUMBAI, DATED 28-02-2018 FOR THE AY . 2011-12. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: THE FOLLOWING GROUNDS OF APPEAL ARE WITHOUT PREJU DICE TO ONE ANOTHER:- ITA NO. 2952/MUM/2018 : 2 : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE A PPELLANT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN CONFIRMING THE AO'S ACTION OF DISALLOWING INTEREST AMOUNTING TO RS. 40,50,000/- O N LOANS TAKEN FROM 9 PARTIES DURING THE EARLIER YEARS UNDER THE P ROVISIONS OF INCOME TAX ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE A PPELLANT'S CASE AND IN LAW THE LD. C1T(A) ERRED TO HOLD THAT THE LOANS TAKEN BY THE APPELLANT FROM 9 PARTIES DURING THE EARLIER YEARS R EMAINED UNEXPLAINED BY RELYING ON SOME INFORMATION/REPORT R ECEIVED FROM DGIT(INV.) AND THE STATEMENTS OBTAINED FROM VARIOUS PERSONS BELONGING TO BHANWARLAL JAIN GROUP DESPITE THE FACT THAT THE AO DID NOT PROVIDE THE SO-CALLED REPORT/INFORMATION AND TH E STATEMENTS AND WITHOUT AFFORDING ANY OPPORTUNITY OF CROSS EXAMINAT ION OF THOSE PERSONS WHOSE STATEMENTS HAVE BEEN RELIED UPON. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE A PPELLANT'S CASE AND IN LAW THE LD. CIT(A) ERRED IN NOT INDEPENDENTLY GI VING ANY FINDING IN THE CASE OF THE APPELLANT AND ALSO ERRED IN MERELY COPYING THE ORDER PASSED BY HIM OR HIS LD. PREDECESSOR IN THE CASE OF BHANWARLAL JAIN GROUP FOR THE PURPOSE OF CONFIRMING THE ADDITIONS M ADE BY THE AO IN THE ASSESSMENT ORDER. 4. IN ANY EVENT, THE LD. AO ERRED IN RAISING A DE MAND OF RS. 17,61,730/- AND THE LD. CIT(A) ERRED IN CONFIRMING THE SAME DESPITE THE FACT THAT THE INCOME OF THE AOP IS TAXABLE IN T HE HANDS OF ITS MEMBERS AS STATED BY THE AO AT SR. NO. 5 OF THE ASS ESSMENT ORDER. 5. THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER, A MEND AND /OR DELETE ALL OR ANY OF THE FOREGOING GROUNDS OF APPEAL. 6. THE APPELLANT PRAYS BEFORE THE HON'BLE TRIBUNA L TO QUASH THE ASSESSMENT ORDER AND/OR DELETE THE ADDITIONS MADE B Y THE AO. 3. THIS APPEAL WAS FIXED FOR HEARING ON 28-01-2019. NOTICE OF HEARING WAS SENT TO THE ASSESSEE BY RPAD ON THE ADDR ESS PROVIDED BY THE ASSESSEE IN THE APPEAL MEMO. THE SAI D NOTICE HAS COME BACK UN-SERVED WITH THE REMARK LEFT. THE A SSESSEE HAS NOT PROVIDED ANY NEW ADDRESS AND HENCE, UNDER THE SE ITA NO. 2952/MUM/2018 : 3 : FACTS, SERVICE OF NOTICE ON THE ASSESSEE IS NOT POSSIBL E AND THEREFORE, I DECIDE THE APPEAL OF THE ASSESSEE EX-PARTE QUA THE ASSESSEE. 4. LD. DR FOR THE REVENUE SUPPORTED THE ORDER OF THE L D. CIT(A). 5. I HAVE CONSIDERED THE SUBMISSIONS OF LD. DR FOR TH E REVENUE AND HAVE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. I FIND THAT THE ISSUE IN DISPUTE IS IN RESPECT OF DISALLOWANCE OF INTEREST AMOUNTING TO RS. 40.50 LAKHS ON LOANS TAKEN FROM NINE PARTIES DURING THE EARLIER YEARS . IN THIS REGARD, THE RELEVANT PARAS OF THE ORDER OF THE LD. CIT( A) VIDE PARA NOS. 9.0 TO 9.3 ARE REPRODUCED HEREIN BELOW FOR READY REFERENCE: 9.0 I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMI SSIONS OF THE APPELLANT, THE OBSERVATIONS OF THE AO CONTAINED IN THE ASSESSMENT ORDER AND THE OTHER MATERIALS ON RECORD ON THIS ISS UE. 9.1 ON THIS ISSUE, IT MAY BE NOTED THAT I HAVE CONF IRMED THE ADDITION MADE BY THE A.O. ON ACCOUNT OF UNSECURED LOANS, WHI CH HAVE BEEN HELD TO BE BOGUS AND MERE ACCOMMODATION ENTRIES IN THE EARLIER ASSESSMENT YEARS. IN THIS REGARD, REFERENCE MAY BE MADE TO THE APPELLATE ORDERS IN THE CASE OF THE APPELLANT FOR A .Y. 2009-10 & A.Y. 2010-11. SINCE, THE PRINCIPAL AMOUNT OF LOAN HAS BE EN HELD TO BE BOGUS IN NATURE, THE INTEREST PAID / PAYABLE ON THE SAME ALSO NEEDS TO BE DISALLOWED. 9.2 IT IS ALSO BROUGHT ON RECORD THAT A DETAILED AN ALYSIS OF THE SEIZED MATERIAL FOUND DURING THE COURSE OF THE SEARCH OPER ATION ON THE ITA NO. 2952/MUM/2018 : 4 : BHANWARLAL JAIN GROUP HAS REVEALED THAT EVEN THE IN TEREST PORTION PAID THROUGH CHEQUE AND DULY RECORDED IN THE BOOKS OF ACCOUNT AT BOTH THE ENDS, HAS ALSO BEEN SETTLED IN CASH. THUS, AGAINST THE AMOUNT OF INTEREST PAID BY THE BORROWER BY CHEQUE / RTGS, AN EQUIVALENT AMOUNT OF UNACCOUNTED CASH IS RECEIVED B ACK BY THE BORROWER FROM THE RESPECTIVE BHANWARLAL JAIN GROUP CONCERN. 9.3 ACCORDINGLY, IT IS HELD THAT THE INTEREST DEBIT ED IN THE P&L ACCOUNT AMOUNTING TO RS. 40,50,000/- IN THE NAME OF VARIOUS PARTIES BELONGING TO THE BHANWARLAL JAIN GROUP, ON THE ACCO MMODATION ENTRIES OF LOANS HAS BEEN RIGHTLY DISALLOWED BY THE A.O. AND IS UPHELD. HENCE, THE GROUND NO. 1 OF THE PRESENT APPE AL IS HEREBY DISMISSED. 5.1. IT IS SEEN THAT A CATEGORICAL FINDING IS GIVEN BY THE CIT(A) THAT HE HAS CONFIRMED THE ADDITION MADE BY THE AO ON ACCOUNT OF UNSECURED LOANS, WHICH HAVE BEEN HELD TO B E BOGUS AND MERE ACCOMMODATION ENTRIES IN THE EARLIER ASSESSME NT YEARS. IN THIS REGARD, REFERENCE WAS MADE TO THE ORDE R OF THE CIT(A) IN ASSESSEES OWN CASE FOR THE AYS. 2009-10 A ND 2010- 11. THIS IS OBSERVATION OF CIT (A) THAT IN THESE YEARS , THIS IS THE FINDING THAT THE AMOUNT OF LOAN TAKEN WAS HELD TO BE BOGUS IN NATURE AND THEREFORE, INTEREST PAID ON THE S AME ALSO NEEDS TO BE DISALLOWED. IN VIEW OF THESE FACTS, I FIN D NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) BECAUSE NOTHING HAS BEEN BROUGHT ON RECORD BY THE ASSESSEE TO SHOW THAT THE ORDER OF CIT(A) FOR THE AYS. 2009-10 AND 2010- 11, AS PER WHICH, (ADDITION WAS MADE BY HOLDING THAT UNSECUR ED ITA NO. 2952/MUM/2018 : 5 : LOANS TAKEN IN THOSE YEARS ARE BOGUS) HAS BEEN REVERS ED BY THE TRIBUNAL. THEREFORE, THE GROUNDS RAISED BY THE AS SESSEE ARE REJECTED. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH DAY OF JANUARY, 2019 SD/- (A.K. GARODIA) /ACCOUNTANT MEMBER /MUMBAI; /DATED : 30 TH JANUARY, 2019 TNMM ITA NO. 2952/MUM/2018 : 6 : / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT 2. ' ! / THE RESPONDENT 3. # $ ( ) / THE CIT(A), MUMBAI 4. # $ / CIT, MUMBAI 5. '()*+ , #-*+#. , / DR, ITAT, MUMBAI 6. )/01 / GUARD FILE # / BY ORDER, ' //TRUE COPY// /# (DY./ASST. REGISTRAR) #-*+#., / ITAT, MUMBAI