SHRI MUKESH MEHRA, MUMBAI V. DY CIT-CC-6(1), MUMBAI

ITA 411/MUM/2021

• Counselvise Citation: [NaN] 107 COUNSELVISE.COM (IT) 1696 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 26-03-2021
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KISHAN VYAS
• Keywords: Accommodation entries
• Section: 132; 145(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “B” Bench, Mumbai Before Shri Shamim Yahya (AM) & Shri Rahul Chaudhary (JM) I.T.A. Nos. 411,413,414,415 & 416/Mum/2021 (Assessment Years 2012-13 to 2017-18) Mukesh Mehra Room No.203, Mahavir Building 44/46, Popatwadi Kalbadevi Road-400 002 PAN : AAZPM2168E Vs. DCIT,CC-6(1) Room No.1905, 19 th Floor Air India building Mumbai-400 021 (Appellant) (Respondent) Assessee by None Department by Shri Kishan Vyas Date of Hearing 02.02.2022 Date of Pronouncement 04 .02.2022 O R D E R Per Shri Shamim Yahya (AM) :- These are appeals by the assessee against respective orders of learned Commissioner of Income Tax (Appeals) for the concerned assessment years. 2. At the outset, we note that assessee has filed petition for adjournment. We note that assessee has sought several adjournments in the past also. Since, assessee is regularly seeking adjournment without any cogent reason, this adjournment petition has been rejected and the appeal is being disposed-off by hearing the Ld. DR and perused the records. 3. The issues raised in these appeals are common and connected. Hence, by this common order, we are disposing-off the appeals. Mukesh Mehra 2 4. For the sake of reference, we are referring to AY 2012-13:- ITA No.411/Mum/2021 for AY 2012-13:- 5. The issue raised is that ld.CIT(A) erred in sustaining the addition on bogus transaction of the assessee @2% instead of 0.01% as admitted by the assessee. 6. Brief facts of the case are that during the assessment proceedings, the AO observed that a search action u/s. 132 of the Income tax Act was carried out in the case of Shri Vallabh Pittie Group (herein referred to as SVP group) on 22.08.2017. During the course of search, various incriminating documents/computer data backup in annexure A-31 were seized from the office premises of SVP group at 97 & 99, 9 th Floor, Maker Tower, 'F', Cuffee Parade, Mumbai-05 and the same were related to Shri Shomeshwara Spun Pvt. Ltd wherein the appellant is a Director. Subsequently, a search action u/s. 132 of the Act was carried out at the residence of Shri Mukesh Mehra, the appellant and a survey u/s,133A was carried out on 23.08.2017 in the case of appellant's company, M/s.Shri Someshwara Spun Ltd at Room No.36, 3 rd Floor, Vasantwadi, 413E, Kalbadevi, Mumbai. During the survey proceedings, statement of employees of SVP Group mainly Mr.Sanjay Chhada, Mr.Bhupinder Singh and Mr.Shobit Nandavana were recorded under oath wherein they admitted that purchases of goods, both capital as well as revenue from various parties incsluding the appellant and its business concerns were accommodation entries and they were not supported by bills, lorry receipts and other supporting documents and without physical delivery of goods. Shri Chirag Pittie, the main person of SVP group was not able to prove these facts and also unable to provide proof of actual purchase of goods. Statement of Shri Mukesh Mehra, the appellant and his employees were recorded during the search proceedings and it was evident from their statements that the appellant and his concerns were indulged in providing accommodation entries to various parties including SVP Group. The AO was of the view that the appellant was not able to give any cogent explanation as to how the goods were procured and sold to various parties. Therefore, the AO rejected the books of account u/s. 145(3) of the Act and estimated the net profit at 2% from the bogus transactions of purchases and sales. Accordingly, the AO made an addition of Rs.45,13,854/- (erroneously taken as Rs.45,13,85,432/-by the AO).” Mukesh Mehra 3 7. Upon assessee’s appeal, Ld.CIT(A) confirmed the AO’s action by holding as under:- “The facts of the case are that that a search action u/s.132 of the Income-tax Act was carried out in the case of Shri Vallabh Pittie Group (hereinafter referred to as SVP group) on 22.08.2017. During the course of search, various incriminating documents/computer data backup annexure A-31 were seized from the office premises of SVP group at 97 & 99, 9 th Floor, Maker Tower, 'F', Cuffee Parade, Mumbai-05 and the same were related to Shri Shomeshwara Spun Pvt. Ltd wherein the appellant is a Director. Subsequently, a search action u/s.132 of the Act was carried out at the residence of Shri Mukesh Mehra, the appellant and a survey U/S.133A was carried out on 23.08.2017 in the case of appellant's company, M/s.Shri Someshwara Spun Ltd at Room No.36, 3 rd Floor, Vasantwadi, 413E, Kalbadevi, Mumbai. During the survey proceedings, statement of employees of SVP Group mainly Mr.Sanjay Chhada, Mr.Bhupinder Singh and Mr.Shobit Nandavana were recorded under oath wherein they admitted that purchases of goods, both capital as well as revenue from various parties including the appellant and its business concerns were accommodation entries and they were not supported by bills, lorry receipts and other supporting documents and without physical delivery of goods. Shri Chirag Pittie the main person of SVP group was not able to prove these facts and also unable to provide proof of actual purchase of goods. Statement of Shri Mukesh Mehra, the appellant and his employees were recorded during the search proceedings and it was evident from their statements that the appellant and his concerns were indulged in providing accommodation entries to various parties including SVP Group. It is an admitted fact that the appellant was engaged in providing accommodation entries of sales and purchases to various parties including SVP group. During the appellate proceedings, the it was contended by the appellant that he had accepted the addition of commission income @ 0.01% of the total transactions. Now, the question that remains to be decided is with respect to the actual rate of percentage of commission for providing accommodation entries. The appellant had stated that he used to get commission @0.01% of the transaction value, however, the appellant had not provided any documentary proof for the same. The AO had arrived at 2% rate of commission on the basis of the prevailing market practice. In the absence of any documentary proof, the rate of commission adopted by the appellant @0.01% cannot be accepted. Therefore, the addition of commission income of Rs.45,13,854/- being 2% of the transaction value of Rs.22,56,92,716/- is upheld. Accordingly, this ground of appeal is dismissed.” 8. Against the above order, assessee is in appeal before us. Mukesh Mehra 4 9. We have heard the Ld. DR and perused the records. We find that as per assessees own admission, it was the business of providing accommodation entries. Hence, the entire sales and purchases were accepted to be bogus and assesssee admitted that he was getting 0.01% as commission. In these facts, there is no reason why the books of assessee should be accepted. The rejection of the books in the light of clear admission of the assessee that he is a bogus accommodation entry provider is quiet correct and there is no infirmity in this regard. Assessee has been found to be indulging in bogus accommodation entries, the income attributed to such transactions cannot be determined as per the whims and fancies of the assessee. On the facts and circumstances of the case, in our considered opinion, the 2% commission attributed by the revenue authorities is very fair. Hence, we do not find any infirmity in the same and we uphold the same. 10. In the result, this appeal by the assessee stand dismissed. ITA No’s 413 to 416/Mum/2021 for AY 2014-15 to 2017-18:- 11. Since, the facts are identical and grounds are also identical. Our above adjudication applies mutatis mutandis to all the appeals referred above. Hence, all the assessee’s appeals stands dismissed. Pronounced in the open court on 04 .02.2022 Sd/- Sd/- (RAHUL CHAUDHARY) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai; Dated : 04 /02/2022 Thirumalesh, Sr.PS Copy of the Order forwarded to : 1. The Appellant Mukesh Mehra 5 2. The Respondent 3. The CIT(A) 4. CIT 5. DR, ITAT, Mumbai 6. Guard File. BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai