DISHA N. LALWANI, MUMBAI V. ITO 23(2)(2), MUMBAI

ITA 3578/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7957 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 21-08-2017
• Assessment Year: 2003-2004
• Appeal Filed On: 24-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN
• Keywords: Search and seizure; Opportunity of being heard; Accommodation entries
• Section: 68; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E , MUMBAI BEFORE S HRI R.C. SHARMA (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 3578 /MUM/20 1 6 ASSESSMENT YEAR: 2003 - 20 04 MRS. DISHA N. LALWANI, J - 301, VARDHAMAN NAGAR, JUNCTION OF R.P. ROAD & M.G. ROAD, MULUND (W), MUMBAI 400080 PAN: AAAHS1562B VS. THE ITO 23 (2)(2), I.T. OFFICES, C - 10, PRATYAKSHAKAR BHAVAN (2 ND FLOOR), BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400051 (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI V. JUSTI N (DR) DATE OF HEARING: 07/11 /201 7 DATE OF PRONOUNCEMENT: 08 / 12 /201 7 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE MRS. DISHA N. LALWANI AGAINST ORDER DATED 0 2/02/2016 PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 40 , MUMBAI , FOR THE ASSESSMENT YEAR S 2003 - 04 , WHEREBY THE LD. CIT (A) HAS CONFIRMED THE PENALTY OF RS. 1,73,219 / - IMPOSED BY THE AO U/S 271 (1) (C) OF THE INCOME TAX ACT, 1961 (FOR SHORT TH E ACT) . 2. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAD CLAIMED EXEMPTION U/S 10 ON ACCOUNT OF LONG TERM CAPITAL GAIN FROM SALE OF SHARES FOR RS. 7,66,653/ - . D URING THE COURSE OF ASSESSMENT IT WAS NOTICED THAT MR. MUKESH CHAUKSI, MD OF M/S MAHASAGAR S ECURITIES LTD. HAD ARRANGED BOGUS BILLS/ACCOMMODATION ENTRIES PERTAINING TO THE SAID SHARES . ACCORDINGLY, AO HOLDING THE SALE TRANSACTION OF RS. 7,66,653/ - AND BROKERAGE OF RS. 130/ - BOGUS TREATED THE 2 ITA NO. 3578 /MUM/2016 ASSESSMENT YEAR: 2003 - 04 SAME AS UN EXPLAINED CASH CREDIT U/S 68 OF THE ACT AND A DDED THE SAID AMOUNT T O THE INCOME OF THE ASSESSEE. IN APPEAL, THE LD. CIT (A) CONFIRMED THE ADDITION. ACCORDINGLY, PENALTY ORDER U/S 271 (1) (C) WAS PASSED BY THE AO. IN FIRST APPEAL, THE LD. CIT (A) CONFIRMED THE PENALTY LEVIED BY AO U/S 271 (1)(C). AGAI NST THE SAID ORDER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE ASSESSEE HAS RAISED THE FOLLOWING EFFECTIVE GROUND S OF APPEAL AGAINST THE IMPUGNED ORDER PASSED BY THE LD. CIT (A): - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE PENALTY ORDER PASSED U/S 271 (1)(C ) OF THE I.T. ACT IS INVALID AND BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN CONFIRMING THE PENALTY LEVIED OF RS. 1,73,219/ - U/S 271 (1)(C) OF THE I.T. AC T AND THAT TOO WITHOUT GIVING FULL AND PROPER OPPORTUNITY OF BEING HEARD IN THE MATTER. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN CONFIRMING THE PENALTY LEVIED OF RS. 1,73,219/ - U/S 271 (1)(C) OF THE I.T. ACT AND THAT TOO WITHOUT APPRECIATING FULLY AND PROPERLY THE FACTS OF THE CASE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED C.I.T. (A) ERRED IN CONFIRMING THE PENALTY LEVIED OF RS. 1,73,219/ - U/S 271 (1)(C) OF THE I.T. ACT A LTHOUGH THERE HAS BEEN NEITHER ANY CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4. THIS CA SE WAS FIXED FOR HEARING ON 07/11/2017. ON THE SAID DATE , WHEN THE CASE WAS CALLED FOR HEARING , NONE APPEARED ON BEHALF OF THE ASSESS EE NOR ANY APPLICATION FOR ADJOURNMENT WAS RECEIVED. WE NOTICE D THAT THIS CASE WAS FIXED FOR HEARING FOR THE FIRST TIME ON 02/04/2017. THEREAFTER, THE CASE WAS POSTED FOR 03/03/2017, 13/04/2017, 21/04/2017 AND 02/11/2017 FOR HEARING, HOWEVER, T HE ASSESSEE THE ASSESSEE DID NOT APPEAR ON ANY OF THE SAID DATES. WE FURTHER OBSERVED THAT NOTICE SENT THROUGH REGISTERED POST HAS RECEIVED BACK WITH THE REMARK OF THE POSTAL DEPARTMENT THAT THE PARTY HAS LEFT 3 ITA NO. 3578 /MUM/2016 ASSESSMENT YEAR: 2003 - 04 THE PLACE. FROM THE CONDUCT OF THE APPELLANT/ASSESSEE, WE ARE SATISFIED THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE PRESENT APPEAL. WE ACCORDINGLY DECIDE TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR). 5. BEFORE US, T HE LD. DR RELYING ON TH E ORDER PASSED BY THE LD. CIT (A) SUBMITTED THAT IN QUANTUM APPEAL THE MUMBAI TRIBUNAL HAS CONFIRMED THE ADDITION IN QUESTION. THEREFORE, THERE IS NO MERIT IN THE ASSESSEES APPEAL AND THE SAME IS LIABLE TO BE DISMISSED. 6. WE HAVE CAREFULLY GONE THROUGH THE MATERIAL ON RECORD. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS WRONGLY CONFIRMED THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. WE NOTICE THAT THE ASSESSMENT WAS REOPENED IN THIS CASE AFTER RECEIVING INFORMATION FROM DIT (INV ), MUMBAI THAT SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON M/S MAHASAGAR SECURITIES PVT. LTD. AND ITS RELATED GROUP OF 34 COMPANIES INCLUDING M/S GOLDSTAR FINVEST PVT. LTD. RUN BY MR. MUKESH CHAUKSI AND IT WAS FOUND THAT THE APPELLANT HAD OBTAINED ACCOMM ODATION ENTRIES IN THE SCRIP OF M/S BUNIYAD CHEMICALS AND M/S N.E. ELECTRONICS THROUGH M/S GOLD STAR FINVEST PVT. LTD. AND MR. MUKESH CHAUKSI IN HIS STATEMENT ADMITTED THAT THESE COMPANIES PROVIDE PURCHASE BILLS FOR LONG TERM CAPITAL GAIN AND FURTHER CONF IRMED THAT BOTH THE SALES AND PURCHASE BILLS ISSUED ARE BOGUS. WE FURTHER NOTICE THAT THE SEBI HAS CONFIRMED THAT NO TRADES FOR CLIENT CODE THROUGH THE MEMBERS NAMES APPEARING IN THE CONTRACT NOTE WERE FOUND EXECUTED. THE CONCLU DING PARA OF LD. CIT (A) S ORDER READS AS UNDER: - IN THE ABOVE FACTS AND CIRCUMSTANCES, WHERE IT HAS BEEN ESTABLISHED THAT THE APPELLANT HAS OBTAINED ACCOMMODATION ENTRIES FROM A PROFESSIONAL ENTRY PROVIDER ADDITIONS HAVING BEEN MADE IN THE HANDS OF THE APPELLANT, ATTRACT THE LEVY OF PENALTY UNDER SECTION 271 )1)(C) OF THE ACT. IT IS NOT A CASE OF A BONAFIDE 4 ITA NO. 3578 /MUM/2016 ASSESSMENT YEAR: 2003 - 04 EXPLANATION BEING GIVEN BY THE ASSESSEE WHICH HAS NOT BEEN ACCEPTED BY THE DEPARTMENT BUT FINDING OF FACT BY THE ASSESSING OFFICER/COMMISSIONER OF INCOME TAX S(APPEALS) AS REFE RRED TO BY THE AO, ESTABLISHES DELIBERATE ATTEMPT TO EVADE TAX BY WAY OF INTRODUCTION OF CASH CREDITS AND THE ASSESSEE HAVING FURNISHED INACCURATE PARTICULARS OF INCOME MAKES IT LIABLE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 7. IN OUR CO NSIDERED OPINION, SINCE, THE ASSESSEE HAS FAILED TO ESTABLISH THE GENUINENESS OF THE TRANSACTION , THE ASSESSEE HAS ALSO FAILED TO OFFER ANY PLAUSIBLE EXPLANATION AS TO WHY PENALTY U/S 271(1)(C) OF THE ACT SHOULD NOT BE IMPOSED. IN OUR CONSIDERED OPINION, T HE LD. CIT(A) HAS RIGHTLY CONFIRMED THE PENALTY IN QUESTION. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) TO INTERFERE WITH THE SAME. ACCORDINGLY, WE UPHOLD THE FINDINGS OF THE LD. CIT(A) AND DISMISS ALL THE GROUNDS OF APPEAL OF THE A SSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2003 - 04 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH . DECEMBER , 2017 . SD/ - SD/ - ( R.C. SHARMA ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 08 / 1 2 / 2017 ALINDRA PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . 5 ITA NO. 3578 /MUM/2016 ASSESSMENT YEAR: 2003 - 04 / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI