DEEPAK SHAH, MUMBAI V. ACIT,30(1), MUMBAI

ITA 4206/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4721 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 07-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Bogus purchase; Unexplained cash credit; Accommodation entries
• Section: 143(1); 201; 131; 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI RAJESH KUMAR (AM) & SHRI RAMLAL NEGI ( JM) I.T.A. NO. 4206/MUM/2017 (ASSESSMENT YEAR 2012-13 ) SHRI DEEPAK SHAH 3C/309, VRINDAVAN RAHEJA TOWNSHIP MALAD (WEST) MUMBAI-400 064. PAN : AHAPS1283N VS . ACIT - 30(1) PRATYKASH KAR BHAVAN, BKC BANDRA(E) MUMBAI-400051. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI NEEL KHANDELWAL DEPARTMENT BY SHRI D.G. PANSARI DATE OF HEARING 12 . 2 . 201 9 DATE OF PRONOUNCEMENT 22 . 2 . 201 9 O R D E R PER RAJESH KUMAR (AM) : THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 04.04.2017 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2012-13. 2. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINST CONFIRMATION OF ADDITION OF RS. 70 LAKHS BY LEARNED CIT(A) AS MADE BY THE AS SESSING OFFICER U/S. 68 OF THE ACT TOWARDS UNEXPLAINED CASH CREDIT. 3. FACTS IN BRIEF ARE THAT THE ASSESSEE FILED RETUR N OF INCOME AT RS. 20,25,260/- ON 30.9.2012, WHICH WAS PROCESSED U/S. 143(1) OF THE ACT. THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTED F OR SCRUTINY UNDER CASS AND STATUTORY NOTICES WERE DULY SERVED UPON THE ASSESSE E. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, OBSERV ED FROM THE PERUSAL OF THE BALANCE SHEET AS ON 31.3.2012 THAT THE ASSESSEE HAS TAKEN LOANS FROM THREE PARTIES NAMELY CASPER INTERNATIONAL- RS. 25 LAKHS, NALESHJA BUSINESS PVT. LTD. RS. 20 LAKHS AND ATHARV BUSINESS PVT. LTD.- RS. 2 5 LAKHS. IN THE MEANTIME, 2 THE ASSESSING OFFICER RECEIVED INFORMATION FROM DIT (INV)-(1), MUMBAI FOLLOWING A SEARCH AT PRAVIN KUMAR JAIN AND ASSOCIATE ENTIT IES ON 1.10.2013 THAT SAID ENTITIES WERE ENGAGED IN PROVIDING ACCOMMODATION EN TRIES OF VARIOUS KINDS SUCH AS BOGUS UNSECURED LOANS, BOGUS PURCHASE ENTRI ES AND SHARE APPLICATION MONEY OF WHICH THE ASSESSEE IS ONE OF THE BENEFICIA RIES. THE ASSESSING OFFICER VIDE ORDER-SHEET ENTRY DATED 24.3.2015 ASKED THE AS SESSEE TO PRODUCE ABOVE THREE PARTIES FOR EXAMINATION ALONGWITH BOOKS OF AC COUNT AND NECESSARY EVIDENCES, WHICH THE ASSESSEE COULD NOT DO AND FINA LLY LOANS WERE TAKEN AND TREATED AS ACCOMMODATION ENTRIES AND ADDITION WAS M ADE OF RS. 70 LAKHS U/S. 68 OF THE ACT AS UNEXPLAINED CASH CREDIT WHILE FRAM ING THE ASSESSMENT. 4. IN THE APPELLATE PROCEEDINGS, LEARNED CIT(A) UPH ELD THE ORDER OF THE ASSESSING OFFICER BY OBSERVING AND HOLDING AS UNDER :- 5. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLA NT. I HAVE ALSO PERUSED THE FINDINGS OF THE A.O. IN THE ASSESSMENT ORDER AND THE REMAND REPORT. THE THREE LENDER COMPANIES ARE FOUND TO BE GROUP CONCERNS OF SHRI PRAVIN KUMAR JAIN. COPY OF STATEME NT OF SHRI JAIN WHEREIN HE HAS ADMITTED TO HAVE PROVIDED ACCOMMODAT ION ENTRIE WAS HANDED OVER TO THE APPELLANT. THE APPELLANT WAS ALS O ASKED TO PRODUCE THE LENDER COMPANIES ALONG WITH RELEVANT DETAILS DU RING THE ASSESSMENT AS WELL AS REMAND PROCEEDINGS. HOWEVER, THE APPELLA NT COULD NOT PRODUCE THEM. THE AO ALSO MADE AN EFFORT TO EXAMINE THE LENDERS BY ISSUING SUMMONS U/S. 131. HOWEVER, THE LENDERS DID NOT APPEAR. THE PEN DRIVE FOUND DURING THE COURSE OF SEARCH IN CASE OF PRAVIN KR. JAIN ALSO SUPPORTS THE ACCOMMODATION ENTRIES COUPLED WIT H THE FACT THAT THERE WAS NO ACTUAL BUSINESS ACTIVITY IN ANY OF THE CONCERNS. THE STATEMENT RECORDED ON OATH U/S 131 OR 132(4) HAS EV IDENTIARY VALUE AND CAN BE SAFELY USED AS EVIDENCE. IN VIEW OF ABOVE, I T IS HELD THAT THE APPELLANT HAS FAILED TO PROVE IDENTITY, CREDITWORTH INESS AND GENUINENESS OF LOANS FROM THE THREE LENDERS AND THE ADDITION MA DE BY THE AO IS HEREBY SUSTAINED. THE GROUND IS REJECTED. 5. LEARNED AR VEHEMENTLY SUBMITTED THAT THE ORDER O F LEARNED CIT(A) UPHOLDING THE ORDER OF THE ASSESSING OFFICER IS CON TRARY TO THE LAW AS ORDER OF THE ASSESSING OFFICER WAS CONFIRMED DESPITE THE FAC T THAT THE ASSESSEE HAS FILED ALL NECESSARY EVIDENCE BEFORE THE AO IN THE ASSESSM ENT PROCEDINGS. LEARNED AR SUBMITTED THAT BY VARIOUS COMMUNICATIONS TO THE ASSESSING OFFICER, THE 3 ASSESSEE FILED NECESSARY DETAILS SUBMITTING THEREIN THAT THE ASSESSEE HAS TAKEN TEMPORARY BUSINESS LOANS FROM THREE COMPANIES IN TH E MONTH OF MARCH 2012, WHICH WERE REPAID WITHIN A PERIOD RANGING FROM TW O TO SIX MONTHS DULY CORROBORATED WITH ALL NECESSARY EVIDENCES SUCH AS COPIES OF BANK STATEMENTS, LEDGER ACCOUNTS, CONFIRMATIONS FROM THE PARTIES, TH EIR PANS ETC. LEARNED AR SUBMITTED THAT VIDE LETTER DATED 8.2.2017, THE ASSE SSEE INFORMED THE ASSESSING OFFICER ON THE DATE OF HEARING I.E. 9.2.2017 THAT T HE ASSESSEE IS NOT IN A POSITION TO ATTEND HEARING AS THE ASSESSEE IS PREOC CUPIED IN HIGH COURT ON 9.2.2017, WHICH WAS PROVED BY LEARNED AR BY PLACING BEFORE THE BENCH A COPY OF THE ORDER FROM HIGH COURT FILED AT PAGE NO. 34 O F THE PAPER BOOK. LEARNED AR SUBMITTED THAT EVEN NOTICES WERE ISSUED U/S. 133 (6) BY THE ASSESSING OFFICER TO THESE PARTIES WERE DULY RESPONDED BY THE SAID PARTIES BY DRAWING OUR ATTENTION TO PAGE NO.38 TO 40 OF THE PAPER BOOK WHE REIN ALL DETAILS AS REQUIRED BY THE ASSESSING OFFICER WERE DULY FILED. THUS, LEA RNED AR SUBMITTED THAT THE ASSESSEE HAS FILED COPIES OF CONFIRMATIONS, LEDGER ACCOUNTS, BANK STATEMENTS EVIDENCING TRANSACTIONS THROUGH BANKING CHANNEL, IT RS, PAN AND ANNUAL REPORTS ALONGWITH AUDITED PROFIT AND LOSS ACCOUNTS AND BALANCE SHEETS OF THESE PARTIES. LEARNED AR SUBMITTED THAT THE ASSESSEE HAS REPAID LOAN WITHIN A SPAN OF TWO TO SIX MONTHS. THUS, THE ASSESSING OFFICER H AS TOTALLY FAILED TO CONDUCT ANY MEANINGFUL AND OBJECTIVE INVESTIGATION AND ME RELY RELIED ON THE STATEMENT OF SHRI PRAVEEN KUMAR JAIN THAT THEY WER E ENGAGED IN THE BUSINESS OF PROVIDING HAWALA ENTRIES THOUGH NOWHERE ASSESSEE S NAME WAS EVER TAKEN BY THE SAID PERSON. SIMILARLY, LEARNED CIT(A) HAS A FFIRMED THE ORDER OF ASSESSING OFFICER BY SIMPLY RELIED ON THE STATEMENT RECORDED IN THE COURSE OF SEARCH U/S. 132(4) OF THE ACT AND FURTHER HARPING O N THE FACT THAT SUMMONS ISSUED U/S. 131 WERE NOT COMPLIED WITH. LEARNED AR ALSO REFERRED TO THE DECISION OF THE COORDINATE BENCH IN THE CASE OF ACI T VS. SHREEDHAM BUILDERS (ITA NO. 5589/MUM/2017 FOR A.Y. 2012-13), WHEREIN A LL THESE THREE ENTITIES HAVE LENT MONEY AND THE COORDINATE BENCH HAS TAKEN THE VIEW THAT NO ADDITION TO BE MADE U/S. 68 OF THE ACT AS THE ASSES SEE HAS DULY DISCHARGED BURDEN CAST UPON IT U/S. 68 OF THE ACT. LEARNED AR THEREFORE PRAYED BEFORE THE 4 BENCH THAT THE ORDER OF LEARNED CIT(A) MAY BE SET A SIDE AND THE ASSESSING OFFICER BE DIRECTED TO DELETED THE ADDITION. 6. PER CONTRA, LEARNED DR RELIED ON THE ORDER OF LE ARNED CIT(A) HEAVILY BY SUBMITTING THAT FACTS REVEALED DURING THE COURSE OF SEARCH UNEQUIVOCALLY PROVED THAT THE ASSESSEE WAS BENEFICIARY OF HAWALA RACKET WHICH WAS BEING OPERATED BY SHRI PRAVIN KUMAR JAIN AND ASSOCIATE CO NCERNS AND HE EVEN ADMITTED DURING THE COURSE OF STATEMENT RECORDED U/ S. 132(4) OF THE ACT THAT BUSINESS WAS NOT BEING DONE BUT ONLY ACCOMMODATION ENTRIES WERE PROVIDED ON COMMISSION BASIS. UNDER THESE CIRCUMSTANCES, LEA RNED DR PRAYED THAT THE ORDER OF LEARNED CIT(A) MAY BE AFFIRMED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE FILED COPIES OF CONFIRMATIONS, LEDGER ACCOUNTS, BANK STATEMENTS, IT RS, PANS AND AUDITED BALANCE SHEETS AND PROFIT AND LOSS ACCOUNTS IN RESP ECT OF THESE THREE PARTIES WHO LENT MONEY TO THE ASSESSEE. THE AUTHORITIES BEL OW HAVE ONLY RELIED ON STATEMENT OF SHRI PRAVIN KUMAR JAIN THAT SAID HE AN D RELATED ENTITIES WERE ENGAGED IN PROVIDING ACCOMMODATION ENTRIES OF WHICH THE ASSESSEE WAS ONE OF THE BENEFICIARIES WITHOUT HAVING BROUGHT ANYTHING T O DISBELIEVE AND DISPROVE VARIOUS DOCUMENTS FILED BY THE ASSESSEE. EVEN IN TH E CASE OF ACIT VS. SHREEDHAM BUILDERS (SUPRA), UNDER SIMILAR FACTS THE COORDINATE BENCH HAS ACCEPTED LOANS GIVEN BY THESE THREE PARTIES, WHICH WERE ALSO COMMON IN THE CASE OF THE ASSESSEE AS STATED IN PARA 2.15 OF THE SAID ORDER, WHICH IS AS UNDER:- 2.15. NOW, IN THE LIGHT OF THE FOREGOING DISCUSSION , WE SHALL EXAMINE THE FACTS OF THE PRESENT APPEAL. ADMITTEDLY, THE ASSESS EE ALLEGED TO HAVE OBTAINED ACCOMMODATION ENTRIES IN THE FORM OF UNSEC URED LOANS FROM ENTITIES CONTROLLED BY SHRI PRAVIN KUMAR JAIN. DURI NG THE COURSE OF SURVEY, STATEMENT OF SHRI AJAY MAHESHWARI, ONE OF THE PARTN ERS WAS RECORDED ON 17/10/2014, ON OATH UNDER SECTION 131 OF THE ACT. THE DETAILS OF UNSECURED LOANS TAKEN DURING THE FINANCIAL YEAR 201 1-12 ARE SUMMARIZED HEREUNDER:- 5 SL. NO. NAME OF THE PARTIES AMOUNT IN RS. 1. ATHARV BUSINESS PVT. LTD. 85, 00,000/- 2. CASPER ENTERPRISES PVT. LTD. 65 ,00,000/- 3. DUKE BUSINESS PARK 50,00, 000/- TRADING PVT. LTD.) 4. OLIVE OVERSEAS PVT. LTD. 90, 00,000/- (REALGOLD TRADING PVT. LTD.) 5. VIRAJ MERCANTILE PVT. LTD. 75,00,000/- 6. NAKSHATRA BUSINESS PVT. LTD. 1,05 ,00,000/- TOTAL 4,70, 00,000/- 8. THUS, IT IS CLEAR FROM THE ABOVE THAT THE ENTITI ES WHICH GAVE LOANS TO THE ASSESSEE APPEARED AT SERIAL NUMBER 1,2 & 6 OF PARA 2.15 OF THE COORDINATE BENCH DECISION. THE ASSESSEE HAS FILED NECESSARY PR OOFS AND DOCUMENTS SUPPORTING THE BORROWINGS OF MONEY AND REPAYMENT TH EREOF. UNDER THESE CIRCUMSTANCE, WE ARE NOT IN AGREEMENT WITH THE CONC LUSION GIVEN BY LEARNED CIT(A). ACCORDINGLY, BY RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH, WE ALLOW THE APPEAL OF THE ASSESSEE. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS T REATED AS ALLOWED. ORDER HAS BEEN PRONOUNCED IN THE COURT ON 22.2.2019 . SD/- SD/- (RAMLAL NEGI) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT M EMBER MUMBAI; DATED : 22/2/2019 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// ( (( ( SENIOR PRIVATE SECRETARY) PS ITAT, MUMBAI