M/s. VIDYUT METALLICS P. LTD., MUMBAI V. ACIT CIR. - 2(3), MUMBAI

ITA 4218/MUM/2008

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75553 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 18-02-2014
• Assessment Year: 1999-2000
• Appeal Filed On: 13-06-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B P K PANDA
• Keywords: Search and seizure; Accommodation entries; Reassessment proceedings
• Section: 143(3); 147

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F B ENCH, MUMBAI . , !'# , $% &'() , $* +, $ # BEFORE SHRI D.MANMOHAN, VP AND SHRI N.K. BILLAIY A, AM ./ I.T.A. NO.4218/MUM/2008 ( - - - - / ASSESSMENT YEAR :1999-2000 M/S. VIDYUT METALLICS PVT. LTD., MALHOTRA HOUSE, 4 TH FLOOR, OPP. GPO, FORT, MUMBAI-400 001 / VS. THE ACIT 2(3), AAYAKAR BHAVAN, MUMBAI-400 0-20 ,. $* ./ / 0 ./ PAN/GIR NO. : ( .1 / APPELLANT ) .. ( 23.1 / RESPONDENT ) .1 4 $ / APPELLANT BY: NONE 23.1 5 4 $ / RESPONDENT BY: SHRI B.P.K. PANDA 5 6* / DATE OF HEARING :18.02.2014 7- 5 6* / DATE OF PRONOUNCEMENT :18.02.2014 +$8 / O R D E R PER N.K. BILLAIYA, AM: WITH THIS APPEAL THE ASSESSEE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE LD. CIT(A)-XXX, MUMBAI DT. 7.4.2008 PE RTAINING TO A.Y. 1999-2000. 2. THE ASSESSEE HAS ASSAILED THE ORDER OF THE LD. C IT(A) ON TWO COUNTS. FIRST ON THE POINT OF LAW STATING THAT THE LD. CIT(A) ERRED IN CONFIRMING THE REASSESSMENT PROCEEDINGS AND THEREB Y ERRED IN ITA NO. 4218/M/08 2 CONFIRMING THE ORDER OF THE AO U/S. 143(3) R.W. SEC TION 147 OF THE ACT. ON SECOND COUNT, THE ASSESSEE HAS CHALLENGED THE AD DITION OF RS. 21,32,750/-. 3. NO ONE APPEARED ON BEHALF OF THE ASSESSEE THEREF ORE WE HAVE DECIDED TO PROCEED EX PARTE. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE ACTION WAS CONDUCTED BY THE INVESTIGATION WING, UDA IPUR IN THE CASE OF GAJENDRA PORWAL GROUP ON 11.3.2005. DURING THE COU RSE OF THE SEARCH PROCEEDINGS, IT CAME TO THE NOTICE OF THE SEARCH PA RTY THAT AN AMOUNT OF RS. 22,45,000/- WAS PAID BY THE IMPUGNED ASSESSEE T O JALKANTA TECHNICAL & FINANCIAL SERVICES (P) LTD. (JTFPL). SHRI GAJEND RA PORWAL, ONE OF THE DIRECTORS OF THE SAID COMPANY ADMITTED THAT THE COM MISSION RECEIVED FROM THE ASSESSEE WAS BOGUS AND IT WAS RETURNED IN CASH DURING THE YEAR UNDER CONSIDERATION. TAKING A LEAF OUT OF THIS INF ORMATION, THE ASSESSMENT WAS RE-OPENED U/S. 147 OF THE ACT BY ISSUE OF NOTIC E U/S. 148. 4.1. THE ASSESSEE WAS PROVIDED WITH THE COPY OF THE STATEMENT OF SHRI GAJENDRA PORWAL AND ACCORDINGLY THE ASSESSEE WAS AS KED AS TO WHY THE SAID SUM OF RS. 21,32,750/- BE NOT TREATED AS THE UNCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE REPLIED THAT THE PAYMENT OF COMMISSION OF RS. 22,45,000/- WAS MADE IN THE FINANCIAL YEAR 1997-98 RELEVANT TO ASSESSMENT YEAR 1998-99 AND THE EXPENDITURE WAS BOO KED DURING THAT PERIOD AND THE SAME WAS ALLOWED AND NO CASH HAS BEE N RECEIVED BY THE ASSESSEE. THE ASSESSEE ALSO STRONGLY OBJECTED TO T HE REOPENING OF THE ASSESSMENT. HOWEVER, THE CONTENTIONS OF THE ASSESS EE DID NOT FIND ANY FAVOUR FROM THE AO WHO WENT ON TO ADD THE AMOUNT OF COMMISSION ITA NO. 4218/M/08 3 RECEIVED BACK IN CASH TO THE TUNE OF RS. 21,32,750/ - AS UNDISCLOSED INCOME. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. BEFORE THE LD. CIT(A) IT WAS STRONGLY CONTENDED THAT IF AT ALL THE STATEMENT OF SHRI GAJENDRA PORWAL IS TO BE BELIEVED, THEN THE TRANSACTION PERTAINS TO FINANCIAL YEAR 1997-98 RELE VANT TO A.Y. 1998-99 AND ANY ADDITION TO BE MADE SHOULD HAVE BEEN MADE I N A.Y. 1998-99 AND NOT BY REOPENING OF THE IMPUGNED ASSESSMENT YEAR. THIS CONTENTION OF THE ASSESSEE WAS REJECTED BY THE LD. CIT(A) WHO CON FIRMED THE ADDITIONS MADE BY THE AO. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. 7. WE HAVE HEARD THE ARGUMENTS OF THE LD. DEPARTMEN TAL REPRESENTATIVE AND CAREFULLY PERUSED THE ORDERS OF THE LOWER AUTHORITIES. THE FACT THAT THE ASSESSEE HAD PAID COMMISSION TO M /S. JTFPL IS NOT IN DISPUTE. THE DIRECTOR OF THAT COMPANY HAS ADMITTED OF PROVIDING ACCOMMODATION ENTRIES TO VARIOUS PARTIES IS ALSO NO T IN DISPUTE. THE STATEMENT OF SHRI GAJENDRA PORWAL WAS PROVIDED TO T HE ASSESSEE ALONGWITH NOTICE U/S. 148. THE ASSESSEE NEVER ASKE D FOR AN OPPORTUNITY TO CROSS EXAMINE SHRI GAJENDRA PORWAL. IT APPEARS THA T THE ASSESSEE HAS ACCEPTED THE CONTENTS OF THE STATEMENT OF SHRI GAJE NDRA PORWAL. THE MAIN CONTENTION OF THE ASSESSEE BEFORE THE LOWER AU THORITIES WAS THAT THE EXPENDITURE WAS BOOKED IN A.Y. 1998-99 THEREFORE IF LATER ON IT COMES TO THE NOTICE THAT THE SAID EXPENDITURE WAS BOGUS THEN THE ASSESSMENT OF ASSESSMENT YEAR 1998-99 SHOULD HAVE BEEN REOPENED I NSTEAD OF 1999- 2000. HOWEVER, WE FIND FROM THE STATEMENT OF SHRI GAJENDRA PORWAL THAT HE HAS STATED TO HAVE REFUNDED THE COMMISSION IN CA SH DURING THE ITA NO. 4218/M/08 4 IMPUGNED ASSESSMENT YEAR. THEREFORE, ASSESSMENT YE AR UNDER CONSIDERATION IS THE RELEVANT ASSESSMENT YEAR. THE REOPENING IS PROPER. SINCE THE ASSESSEE HAD NOTHING TO SAY IN RESPECT O F THE ADDITIONS ON MERITS, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH FEBRUARY, 2014 . +$8 5 - * $ 9 :+ ; 18.2.2014 5 < SD/- SD/- (D.MANMOHAN ) (N.K. BILLAIYA) !'# / VICE PRESIDENT $* +, / ACCOUNTANT MEMBER MUMBAI; :+ DATED 18.2.2014 . . ./ RJ , SR. PS +$8 +$8 +$8 +$8 5 55 5 26& 26& 26& 26& =$&-6 =$&-6 =$&-6 =$&-6 / COPY OF THE ORDER FORWARDED TO : 1. .1 / THE APPELLANT 2. 23.1 / THE RESPONDENT. 3. > ( ) / THE CIT(A)- 4. > / CIT 5. &?< 26 , , / DR, ITAT, MUMBAI 6. < / GUARD FILE. +$8 +$8 +$8 +$8 / BY ORDER, 3&6 26 //TRUE COPY// ! !! ! / / / / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI