TRAVELORG HOLIDAYS PRIVATE LTD., MUMBAI V. ACIT-9(3), MUMBAI

ITA 3346/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0973 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-05-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 28-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 27-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VISWAS MUNDE LD
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence; Onus to prove
• Section: 143(3); 68

Judgement Text

ITA NOS.3346/M/2011 & 949/M/2013 TRAVELORG HOLIDAYS PRIVATE LIMITED ASSESSMENT YEARS- 2007-08 & 2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE SHRI MAHAVIR SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.3346/MUM/2011 ( / ASSESSMENT YEAR: 2007-08) TRAVELORG HOLIDAYS PVT. LTD. C/O A.R.PARIKH & CO. CHARTERED ACCOUNTANTS 321, PAREKH MARKET OPERA HOUSE MUMBAI 400 004 / VS. ASSISTANT COMMISSIONER OF INCOME TAX 9(3) 2 ND FLOOR, ROOM NO.229, AAYKAR BHAVAN MUMBAI 400 020 ./ ./PAN/GIR NO. AACCT-5821-D ( /APPELLANT ) : ( !' / RESPONDENT ) & ./I.T.A. NO.949/MUM/2013 ( / ASSESSMENT YEAR: 2009-10) TRAVELORG HOLIDAYS PVT. LTD. PLOT NO. 1, SONAWALA LANE NEXT TO SAMRAT MOTOR TRAINING SCHOOL GOREGAON (EAST) MUMBAI - 400 063 / VS. INCOME TAX OFFICER 9(3)(3) 2 ND FLOOR, ROOM NO.227 AAYAKAR BHAVAN MUMBAI 400 020 ./ ./PAN/GIR NO. AACCT-5821-D ( /APPELLANT ) : ( !' / RESPONDENT ) ITA NOS.3346/M/2011 & 949/M/2013 TRAVELORG HOLIDAYS PRIVATE LIMITED ASSESSMENT YEARS- 2007-08 & 2009-10 2 REVENUE BY : VISWAS MUNDE, LD. DR ASSESSEE BY : NONE / DATE OF HEARING : 03/05/2017 / DATE OF PRONOUNCEMENT : 03/05/2017 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEALS BY ASSESSEE FOR ASSESSM ENT YEAR [AY] 2007-08 & 2009-10 ASSAIL RESPECTIVE ORDERS OF FIRST APPELLATE AUTHORITY. NONE HAS APPEARED ON BEHALF OF ASSESSEE DESPITE BEI NG PROVIDED WITH SUFFICIENT OPPORTUNITY OF BEING HEARD ON VARIOUS OC CASIONS AS PER NOTING IN THE ORDER-SHEET, IT APPEARS THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THESE APPEALS. NO ADJOURNMENT APPLICATIONS HAVE BEEN FILED ON BEHALF OF THE ASSESSEE DESPITE HAVING BEEN SERVED W ITH RPAD NOTICE AND THEREFORE, WE PROCEED TO DECIDE THE APPEALS ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING THE DEPARTMEN TAL REPRESENTATIVE. FIRST, WE TAKE UP ITA NO. 3346/MUM/2011 FOR AY 2007 -08 WHERE THE ASSESSEE IS AGGRIEVED BY ADDITION OF RS.88,64,015/- AS UNEXPLAINED SHARE APPLICATION MONEY AND RS.8,00,000/- ON ACCOUNT OF CERTAIN MARRIAGE EXPENSES INCURRED BY THE ASSESSEE. 2. FACTS AS EMANATING FROM THE RECORDS ARE THAT T HE ASSESSEE, BEING RESIDENT CORPORATE ASSESSEE ENGAGED AS TRAVEL AGENTS / TOUR OPERATOR, WAS ASSESSED U/S 143(3) AT RS.54,98,750/- AFTER CER TAIN ADJUSTMENTS / ITA NOS.3346/M/2011 & 949/M/2013 TRAVELORG HOLIDAYS PRIVATE LIMITED ASSESSMENT YEARS- 2007-08 & 2009-10 3 DISALLOWANCES VIDE ASSESSING OFFICERS [AO] ORDER D ATED 30/12/2009 AS AGAINST RETURNED LOSS OF RS.55,49,089/- FILED BY AS SESSEE ON 29/10/2007. THE ASSESSEE REFLECTED A SUM OF RS.88,64,015/- AS SHARE APPLICATION MONEY RECEIVED FROM A NON-RESIDENT NAMELY SALIM DHANANI BUT COULD NOT PRODUCE COGENT MATERIAL TO SUBSTANTIATE THE SAME AN D ALSO COULD NOT SUBMIT ANY CLEARANCE UNDER THE PROVISIONS OF FOREIG N EXCHANGE MANAGEMENT ACT IN SUPPORT OF THE SAME. AO FURTHER N OTED THAT THE SHARES WERE NEVER ALLOTTED IN FUTURE, WHICH LED THE AO TO TREAT THE SAME AS UNEXPLAINED CASH CREDIT U/S 68. SIMILARLY, THE A SSESSEE DEBITED A SUM OF RS.7.75 LACS AS CERTAIN MARRIAGE EXPENSES IN PRO FIT & LOSS ACCOUNT AND TRIED TO CORRELATE THE SAME WITH A LEDGER ACCOU NT OF LODGING & BOARDING GOA, WHERE THE ASSESSEE CREDITED A SUM OF RS.8,98,687/-, WHICH INTER-ALIA INCLUDED RS.8 LACS RECEIVED IN CASH FROM SOME ASHOK CHANDWANI. HOWEVER, THE AO DOUBTED THE RECEIPT OF CASH AND TRE ATED THE AMOUNT OF RS.7.75 LACS AS UNEXPLAINED AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 3. AGGRIEVED, THE ASSESSEE CONTESTED BOTH THE ADDIT IONS WITHOUT ANY SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 28/02/2011 AND SUBMITTED ADDITIONAL EVIDENCES TO SUPPORT HIS CLAIM , AGAINST WHICH A REMAND REPORT WAS CALLED FROM THE AO WHERE THE LD. AO NOT ONLY OBJECTED TO SUBMISSION OF ADDITIONAL EVIDENCES BUT ALSO NOTED THAT THE ASSESSEE FAILED TO PROVE THE CASH CREDIT BEYOND DOU BT. AFTER CONSIDERING THE CONTENTIONS OF THE ASSESSEE, REMAND REPORT AND MATERIAL AVAILABLE ON RECORD, LD. CIT(A) DISMISS BOTH THESE CLAIMS BY MAKING FOLLOWING OBSERVATIONS:- ITA NOS.3346/M/2011 & 949/M/2013 TRAVELORG HOLIDAYS PRIVATE LIMITED ASSESSMENT YEARS- 2007-08 & 2009-10 4 UNEXPLAINED SHARE APPLICATION MONEY:- 4. AS STATED BEFORE, THE APPELLANT CLAIMED TO HAVE RECEIVED SHARE APPLICATION MONEY OF RS. 8864015 FROM SHRI SALIM DHANANI. IN COURSE O F THE ASSESSMENT THE APPELLANT FURNISHED COPIES OF THE FIRC AND PASSPORT OF SHRI D HANANI. THE A.O OBSERVED THAT THE FIRC DID NOT REVEAL THE NAME AND ADDRESS OF SHR I DHANANI AND THAT THE PASSPORT OF SHRI DHANANI ALSO DID NOT BEAR HIS ADDRESS. HE FURTHER OBSERVED THAT EVEN AFTER TWO YEARS OF RECEIPT OF MONEY NO SHARES HAD BEEN IS SUED TO SHRI DHANANI. HE THEREFORE CONCLUDED THAT THE APPELLANT FAILED TO ES TABLISH THE IDENTITY OF THE PERSON FROM WHOM THE SHARE APPLICATION MONEY HAD BEEN RECE IVED AND ADDED THE SAME AS UNEXPLAINED CASH CREDITS U/S 68 OF THE ACT. BEING A GGRIEVED, THE APPELLANT SUBMITS THAT IT HAS ESTABLISHED THE IDENTITY OF SHRI DHANAN I BY PRODUCING THE COPIES OF THE FIRC, HIS PASSPORT AND LATER BY FILLING OVERSEAS CI TIZEN OF INDIA CERTIFICATES AND PAN CARD. HE THEREFORE SEEKS THAT THE ADDITION MADE OF RS. 88,64,015/- SHOULD BE DELETED. 5.I FIND NO MERITS IN THE CONTENTION OF THE APPELLA NT. IT HAS RELIED ON THE FICRS TO SHOW THAT ENTIRE SHARE APPLICATION MONEY WAS RECEIV ED FROM SHRI SALIM DHANANI BY WAY OF FOREIGN REMITTANCE. TWO OF THE FIRCS ISSUED BY PUNJAB NATIONAL BANK ON 04/04/2008 SHOW THE NAME OF THE APPELLANT AS BENEFI CIARY BUT DO NOT BEAR THE NAME AND ADDRESS OF THE REMITTER. THEY ARE FOR USD49989 EACH WITH RUPEE EQUIVALENT TOTALING RS.44,72,015/-. THE OTHER TWO FIRCS ARE DATED 17/3/2008 ISSUED BY ICICI BANK FOR REMITTANCE OF USD5000 EACH WITH RUPEE EQUI VALENT TOTALING RS.43,93,000/-. THEY SHOW THE NAME SALIM AS THE REMITTER BUT DO N OT BEAR ADDRESS THOUGH THE APPELLANTS NAME APPEARS AS BENEFICIARY. NO DOUBT THE APPELLANT HAS GIVEN THE COPIES OF PAN CARD OR OVERSEAS CITIZEN CERTIFICATES IN SUPPORT OF IDENTITY OF SHRI SALIM DHANANI. BUT, IT HAS FAILED TO OBTAIN A CONF IRMATION FROM HIM THAT THE AFORESAID FOREIGN REMITTANCE WERE MADE BY HIM AND WERE MADE T OWARDS THE IMPUGNED SHARE APPLICATION MONEY WITH THE APPELLANT COMPANY. THE FACT THAT NO SHARES HAVE BEEN ISSUED SO FAR ALSO CASTS SERIOUS DOUBTS OVER THE CL AIM THAT THE IMPUGNED SUM WAS REMITTED BY SHRI SALIM DHANANI. I THEREFORE DECLIN E TO INTERVENE. I CONFIRM THE ADDITION MADE OF RS. 8864015. XXXX MARRIAGE EXPENSES:- 9.THE APPELLANT HAD CLAIMED DEDUCTION OF RS.775000/ - ON ACCOUNT OF MARRIAGE EXPENSES INCURRED AT HOTEL CLARION, GOA. IT CLAIME D BEFORE THE AO THAT THESE EXPENSES WERE MADE OUT OF RS. 800000 RECEIVED FROM SHRI ASHOK CHANDWANI FOR ORGANIZING MARRIAGE ON HIS BEHALF. IN THE ABSENCE OF ANY EVIDENCE, HE TREATED THE SAID SUM AS UNEXPLAINED EXPENSES AND ADDED TO THE I NCOME OF APPELLANT. 10.BEING AGGRIEVED THE APPELLANT SUBMITS THAT IT HA D MANAGED A MARRIAGE EVENT ON BEHALF OF SHRI CHANDWANI AT CLARIAN BEACH HOTELS GO A, FOR WHICH IT RECEIVED RS. 8,00,000/- COMPRISING RS.4,00,000/- IN CASH ON 19/0 1/2007 AND RS 4,00,000/- BY CHEQUE ON 20/01/2007 FROM SHRI CHANDWANI AND PAID F OR THE SAID EXPENSES. IT FURNISHED COPIES OF RECEIPTS DATED 20/01/2007 AND 2 3/01/2007 FOR RS.3,00,000/- AND RS.4,75,000/- OBTAINED FOR MAKING PAYMENT TO THE C LARIAN HOTELS. THE APPELLANT PLEADED THAT THE ADDITION MADE OF RS.7,75,000/- SHO ULD BE DELETED. 11.I FIND NO MERIT IN THE CONTENTION OF THE APPELLA NT. THE REASON FOR MAKING THE IMPUGNED ADDITION GIVEN BY THE A.O WAS THAT THE APP ELLANT FAILED TO LINK THE RECEIPT ITA NOS.3346/M/2011 & 949/M/2013 TRAVELORG HOLIDAYS PRIVATE LIMITED ASSESSMENT YEARS- 2007-08 & 2009-10 5 OF RS.8,00,000/- FROM SHRI CHANDWANI WITH THE PAYME NTS MADE TO CLARIAN HOTELS. IT HAS FURNISHED COPIES OF THE RECEIPT FOR HAVING MADE THE IMPUGNED PAYMENT TO CLARIAN HOTELS. NO EVIDENCE HAS BEEN FURNISHED TO SUPPORT THAT THEY WERE MADE OUT OF THE RECEIPTS FROM SHRI CHANDWANI. THE A.O HAS R IGHTLY HELD THEM AS UNEXPLAINED EXPENSES AND ADDED AS INCOME OF THE APPELLANT. 4. THE LD. DEPARTMENTAL REPRESENTATIVE PLACED RELIA NCE ON THE FINDINGS OF LOWER AUTHORITY AND CONTENDED THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS OF PROVING THE IMPUGNED TRANSACT IONS AND THEREFORE, RIGHTLY SUFFERED SAID DISALLOWANCES. 5. WE HAVE HEARD THE REVENUES CONTENTIONS AND PERU SED RELEVANT MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ONUS TO PROVE THE CASH CREDIT U/S 68 SQUARELY LIED ON THE ASSESSEE AND THE ASSESSEE WAS REQUIRED TO SUBSTANTIATE HIS CLAIM BY SATISFYING TH E THREE INGREDIENTS VIZ. IDENTITY OF THE DONOR, CREDITWORTHINESS AND GENUINE NESS OF THE TRANSACTION, WHICH HE HAS FAILED TO SATISFY. MERE S UBMISSION OF PASSPORT AND OTHER DOCUMENTS DO NOT ABSOLVE ASSESSEE FROM DI SCHARGING ONUS TO PROVE THE NATURE OF THE TRANSACTIONS CONCLUSIVELY. FURTHER, THE FACTS ON RECORDS REVEAL THAT THE SAID AMOUNT WAS RECEIVED AS SHARE APPLICATION MONEY WHEREAS THE SHARES WERE NEVER ALLOTTED DESPITE BEI NG LAPSE OF CONSIDERABLE PERIOD OF TIME, WHICH CAST SERIOUS DOU BT ON THE ASSESSEES CLAIM. SIMILARLY, THE ASSESSEE REFLECTED RECEIPT OF RS.8 LACS ON ACCOUNT OF MARRIAGE EXPENSES BUT FAILED TO RELATE THE SAME WITH THE EXPENDITURE INCURRED BY THE ASSESSEE. THIS BEING THE FACTUAL PO SITION, WE SEE NO REASON TO INTERFERE WITH THE ORDERS OF LD. CIT(A) A ND THEREFORE, NO HESITATION, IN DISMISSING ASSESSEES APPEAL. 6. IN ITA NO.949/MUM/2013 FOR AY 2009-10, THE ASSES SEE IS AGGRIEVED BY SIMILAR ADDITION OF RS.20,90,996/- U/S 68 RECEIVED AS SHARE ITA NOS.3346/M/2011 & 949/M/2013 TRAVELORG HOLIDAYS PRIVATE LIMITED ASSESSMENT YEARS- 2007-08 & 2009-10 6 APPLICATION MONEY FROM THE SAME PERSON. THEREFORE, THERE BEING NO CHANGE IN FACTS OR CIRCUMSTANCES, TAKING THE SAME S TAND, WE FIND NO MERIT IN ASSESSEES APPEAL AND THEREFORE DISMISS GR OUND NO.1. 7. IN GROUND NO. 2, THE ASSESSEE IS AGGRIEVED BY ADHOC ADDITION OF 2%, BEING RS.2,24,000/- AGAINST AGGREGATE SUM OF RS .1,12,16,188/- CLAIMED UNDER THE HEAD LEGAL EXPENSES, MISCELLANEOUS EXPENSES, TRAVELLING EXPENSES. THE SAID DISALLOWANCE WAS MADE BY THE LD. AO ON THE PREMISES THAT HE SAID EXPENDITURE WERE NOT SUPP ORTED BY VALID BILLS / VOUCHERS AND THE SAME, UPON APPEAL, WAS CONFIRMED B Y LD. CIT(A). THEREFORE, NOTING THAT THE ASSESSEE COULD NOT SUBST ANTIATE THE SAME WITH PROPER EVIDENCES, ADHOC DISALLOWANCE OF 2% THEREOF IS QUITE FAIR AND REASONABLE AND HENCE, DO NOT CALL FOR ANY INTERFERE NCE WHICH RESULTS INTO DISMISSAL OF THIS GROUND OF APPEAL ALSO. 8. IN NUTSHELL, BOTH THE ASSESSEES APPEAL STANDS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD MAY, 2017. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 12 .05.2017 SR.PS:- THIRUMALESH ITA NOS.3346/M/2011 & 949/M/2013 TRAVELORG HOLIDAYS PRIVATE LIMITED ASSESSMENT YEARS- 2007-08 & 2009-10 7 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. ) ( ) / THE CIT(A) 4. ) / CIT CONCERNED 5. !$, , , , / DR, ITAT, MUMBAI 6. -. / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI