BALAJI UNIVERSAL TRADELINK PVT. LTD., MUMBAI V. DCIT - CC- 7(1), MUMBAI

ITA 3598/MUM/2018

• Counselvise Citation: [2019] 111 COUNSELVISE.COM (IT) 9484 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-05-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 153A; 234B; 201; 13; 2; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI BEFORE S HRI S. RIFAUR RAHMAN (AM ) AND SHRI RAM LAL NEGI (JM) ITA NO. 3598 /MUM/2018 ASSESSMENT Y EAR: 2009 - 10 M/S BALAJI UNIVERSAL TRADELINK PRIVATE LIMITED, 118/120, 3 RD FLOOR, ASHOKA HOUSE ZAVERI BAAZAR, MUMBAI - 400002 PAN: AABCL0236H VS. THE DCIT, CENTRAL CIRCLE - 7(1), MUMBAI (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : MS. KAVITA KAUSHIK (SR. DR) DATE OF HEARING: 13 /11 /201 9 DATE OF PRONOUNCEMENT: 22 / 11 /201 9 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER DATED 28.03.2018 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 49 (FOR SHORT THE CIT(A) , MUMBAI , FOR THE ASSESSMENT YEAR 2009 - 10 , WHEREBY THE LD. CIT(A) HAS PARTLY ALLOWED T HE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143 (3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT). 2. THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING IN GOLD BAR, JEWELLERY AND CUT AND POLISHED DIAMONDS . A SEARCH AND SEIZURE ACTION WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF SHRI MANOJ B. PUNAMIYA, SHRI ARVIND VYAS AND OTHERS ON 31.10.2009 AND ON SUBSEQUENT DATES . THE ASSESSEE WA S ALSO COVERED BEING , ONE OF THE ASSOCIATES. THE AO COMPLETED THE ASSESSMENT U/S 143 (3) READ WITH SECTION 153A ON 07.08.2012 DETERMINING THE TOTAL INCOME AT RS. 151,05,04,880/ - . SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED U/S 147 2 ITA NO. 3598 / MUM/2018 ASSESSMENT YEAR: 2009 - 1 0 OF THE ACT ON THE GROUND TH AT THE ASSESSEE HAD ENTERED INTO CERTAIN TRANSACTIONS WITH M/S BAFNA EXIM PVT. LTD. WHEREIN AN AMOUNT OF RS. 1,58,00,000/ - WAS RECEIVED BY THE ASSESSEE AND THE SAID INCOME ESCAPED ASSESSMENT. ACCORDINGLY, THE AO AFTER HEARING THE ASSESSEE MADE ADDITION OF RS. 5,64,40,893/ - U/S 68 OF THE ACT AND DETERMINED THE TOTAL INCOME OF THE ASSESSEE AT RS. 156,69,45,770/ - IN THE FIRST APPEAL, THE LD. CIT (A) CONFIRMED THE ADDITION MADE BY THE AO. THE ASSESSEE IS IN APPEAL AGAINST THE SAID FINDINGS OF THE LD. CIT (A). 2. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER PASSED BY THE LD. CIT (A) ON THE FOLLOWING EFFECTIVE GROUND S : - 1. THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS ON THE FACTS AND IN THE LAW. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE HE OUGHT TO HAVE ACCEPTED THE RETURNED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. A.O. ERRED IN ASSESSING THE INCOME OF YOUR APPELLANT AT RS. 1,56,69,45,770/ - AS AGAINST RETURNED INCOME OF RS. 67,55,462/ - . YOUR APPELLANT DISPUTES WRONGF UL VARIATIONS AND SUBMITS THAT HIS RETURNED INCOME TO BE ACCEPTED AS CORRECT. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. A.O. ERRED IN MAKING AN ADDITION OF RS. 5,64,40,893/ - ON ACCOUNT OF UNEXPLAINED SALE CREDIT TO ONE OF ITS CUSTOMERS NAMES M/S BAFNA EXIM PVT. LTD. UNDER SECTION 68 OF THE IT ACT 1961 AS TAXABLE INCOME. LOOKING TO THE FACTS AND IN THE CIRCUMSTANCES OF OF YOUR APPELLANTS CASE THE SAID ADDITION MADE BY THE A.O. IS INCORRECT AND INVALID AND OUGHT TO BE DELETED AS THE PROVISIONS OF SECTION 68 HAS BEEN COMPLIED WITH. 4. IN REACHING TO THE CONCLUSION AND MAKING THE AFORESAID ADDITIONS/ DISALLOWANCES , THE LD. A.O. OMITTED TO CONSIDER RELEVANT FACTORS, CONSIDERATIONS, PRINCIPLES AND EVIDENCES WHILE HE WAS OVERWHELMED, INFLUENCED AND PREJUDICED BY IRRELEVANT CONSIDERATIONS AND FACTORS. 5. THE LD. A.O. ERRED IN IMPOSING INTEREST UNDER SECTION 234B AND 234C OF THE IT ACT, 1961. 6. THE LD. AO ERRED IN INITIATING PENALTY PROCEEDINGS U/S 271 (1) (C) OF THE INCOME TAX ACT, 19 61 . 3 ITA NO. 3598 / MUM/2018 ASSESSMENT YEAR: 2009 - 1 0 3. THIS CASE WAS FIXED FOR HEARING ON 13.11.2019. HOWEVER, ON THE SAID DATE, WHEN THE CASE WAS CALLED OUT FOR HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. FROM THE RECORD, WE OBSERVED THAT THE LD. COUNSEL FOR THE ASSESSEE SOUGHT ADJOURNMENT ON 01.10.2019 AND ACCORDINGLY THE CASE WAS ADJOURNED TO 05.11.2019. HOWEVER, ON 05.11.2019 NONE APPEARED ON BEHALF OF THE ASSESSEE. HENCE, THE CASE WAS FURTHER ADJOURNED TO 13.11.2019. AGAIN ON 13.11.2019, NONE APPEARED ON BEHALF OF THE ASSESSEE AND EVEN NO APPLICATION FOR ADJOURNMENT WAS RECEIVED . FROM THE CONDUCT OF THE ASSESSEE, WE ARE CONVINCED THAT THE ASSESSEE IS NO LONGER INTERESTED IN PURSUING ITS APPEAL. HENCE, WE DECIDED TO DISPOSE OF THE APPEAL ON THE BASIS OF MATERIAL ON RECORD AFTER HEARING THE DEPARTMENTAL REPRESENTATIVE (DR). 4. BEFORE US, THE LD. DR SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO EXPLAIN THE SALE CREDIT TO ONE OF ITS CUSTOMERS M/S BAFNA EXIM PVT. LTD., TO THE SATISFACTION OF AO DURING THE ASSESSMENT PROCEEDINGS AND EVEN DURIN G THE APPELLATE PROCEEDINGS, THE LD. CIT (A) HAS RIGHTLY DISMISSED THIS GROUND OF APPEAL OF THE ASSESSEE AND CONFIRMED THE ADDITION MADE BY THE AO U/S 68 OF THE ACT. THE LD. DR FURTHER SUBMITTED THAT SINCE THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT (A), THERE IS NO MERIT IN THE APPEAL OF THE ASSESSEE. 5. WE HAVE CAREFULLY PERUSED THE MATERIAL ON RECORD. WE NOTICE THAT THE ASSESSEE CONTENDED BEFORE THE LD. CIT (A) THAT THE AO HAS MADE THE ADDITION WITHOUT APPRECIATING THE EVIDENCE PLACED ON RECORD BY IT IN ORDER TO PROVE THE GENUINENESS OF THE TRANSACTION OF SALE CREDIT IN QUESTION. HOWEVER, THE LD. CIT (A) CONFIRMED THE FINDINGS OF THE AO THAT THE ASSESSEE HAS FAILED TO EXPLAIN AS TO WHAT KIND OF TRANSACTIONS HAD TAKEN PLACE WITH M/S BAFNA EXIM PVT. LTD. THE ASSESSEE HAS ALSO FAILED TO ESTABLISH THE IDENTITY AND CREDITWORTHINESS OF THE SAID ENTITY. THE FINDINGS OF THE LD. CIT (A) READ AS UNDER: - 7.5 IN THE INSTANT CASE THE APPELLANT HAS CREDIT TO THE TUNE OF RS. 5,64,893/ - IN ITS BOOKS OF ACCOUNT S IN THE NAME OF M/S BAFNA EXIM PVT. LTD. WHICH IS EITHER A NON - EXISTENT ENTITY OR A PAPER ENTITY WITH NO REAL BUSINESS. NOTICE U/S 133 (6) HAS BEEN RETURNED 4 ITA NO. 3598 / MUM/2018 ASSESSMENT YEAR: 2009 - 1 0 BACK AND THE ASSESSEE COULD NOT PRODUCE ANY DIRECTOR FROM THE SAID COMPANY. THEREFORE THE CREDIT HAS NOT BEEN SATISFACTORILY EXPLAINED BY THE ASSESSEE AND WARRANTS ADDITION U/S 68 WHICH THE AO HAD RIGHTLY MADE. IN THE CASE OF SUMATI DAYAL VS. CIT (1195) 214 ITR 801, THE HONBLE SUPREME COURT HELD AS UNDER: - IN SUCH CASES, A SUPERFICIAL APPROACH TO TH E PROBLEM SHOULD BE ESCHEWED AND THE MATTER HAS TO BE CONSIDERED IN THE LIGHT OF HUMAN PROBABILITIES AND FURTHER THAT ANY TRANSACTION ABOUT WHICH DIRECT EVIDENCE IS RARELY AVAILABLE SHOULD BE INFERRED ON THE BASIS OF CIRCUMSTANCES AVAILABLE ON THE RECORD. IN THAT CASE, THE MAJORITY OPINION OF THE BASIS OF CIRCUMSTANCES AVAILABLE ON THE RECORD. IN THAT CASE, THE MAJORITY OPINION OF THE SETTLEMENT COMMISSION WAS APPROVED AS IT WAS TAKEN AFTER CONSIDERING THE SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES. IT WAS SETTLED IN THE CASE OF CIT VS. DURGA PRASAD MORE 82 ITR 540 (SC) THAT WHERE A PARTY RELIES ON SELF - SERVING RECITALS IN A DOCUMENT, IT IS FOR THAT PARTY TO ESTABLISH THE TRUTH OF THESE RECITALS. IT WAS FURTHER HELD BY THE APEX COURT IN THIS CASE THAT THE TAX AUTHORITIES ARE ENTITLED TO LOOK INTO THE SURROUNDING CIRCUMSTANCES TO FIND OUT THE REALITY OF SUCH RECITALS. THE HONBLE APEX COURT HAS SPECIFICALLY OBSERVED AS UNDER: - SCIENCE HAS NOT YET INVENTED ANY INSTRUMENT TO TEST T HE RELIABILITY OF THE EVIDENCE PLACED BEFORE A COURT OF TRIBUNAL. THEREFORE, THE COURTS AND TRIBUNALS ARE APPLYING THE TEST OF HUMAN PROBABILITIES. HUMAN MINDS MAY DIFFER AS TO THE RELIABILITY OF A PIECE OF EVIDENCE. THESE PRINCIPLES APPLY TO THE PRESENT CASE WHERE THE DOCUMENTARY EVIDENCE PRIMA FACIE SUPPORTS THE APPELLANTS CASE BUT A CLOSER LOOK AT THE SAME IN THE LIGHT OF THE SURROUNDING CIRCUMSTANCES AND APPLYING THE TEST OF HUMAN PROBABILITIES REVEAL THAT THE DOCUMENTARY FAADE CANNOT BE ACCEPTED. IN VIEW OF THE ABOVE, THE ADDITION MADE BY THE AO IS CONFIRMED. THESE GROUNDS OF APPEAL ARE DISMISSED. 6. WE HAVE CAREFULLY GONE THROUGH THE FINDINGS OF THE LD. CIT (A) AND WE AGREE WITH THE LD. CIT (A) THAT THE EVIDENCE ON RECORD IS NOT SUFFICIENT TO HOL D THE TRANSACTION GENUINE. SINCE, THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS OF ESTABLISHING IDENTITY OF THE PARTY, CREDITWORTHINESS OF THE PARTY AND THE GENUINENESS OF TRANSACTION, THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE ADDITION 5 ITA NO. 3598 / MUM/2018 ASSESSMENT YEAR: 2009 - 1 0 MADE BY THE AO. IN O UR CONSIDERED VI EW, THE FINDINGS OF THE LD. CIT (A) ARE BASED ON THE EVIDENCE ON RECORD AND IN ACCORDANCE WITH THE SETTLED PRINCIPLES OF LAW. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER PASSED BY THE LD. CIT (A). ACCORDINGLY, WE UPHOLD THE FINDINGS OF THE LD. CIT (A) AND DISMISS ALL THE GROUNDS OF APPEAL OF THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2009 - 2010 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND NOVEMBER , 2019 . SD/ - SD/ - ( S. RIFAUR RAHMAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 22 / 11 / 201 9 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 . / BY ORDER, //TRUE COPY// / (DY./A SSTT. REGISTRAR) , / ITAT, MUMBAI