NUEVO CONSULTANCY SERVICES LTD ( FORMERLY KNOWN AS FORBES INFOTAINMENT LTD), MUMBAI V. DCIT 3(1), MUMBAI

ITA 4238/MUM/2012

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0092 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-06-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 03-05-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 19-06-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Additional evidence; Corroborative evidences
• Section: 69C; 133(6); 131

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM & SHRI PAWAN SINGH, JM ITA NO.4238/MUM/2012 : ASST.YEAR 2006-2007 M/S.NUEVO CONSULTANCY SERVICES LTD. (FORMERLY KNOWN AS FORBES INFOTAINMENT LIMITED) 41/44, SHAPOORJI PALLONJI CENTRE MINOO DESAI MARG, COLABA MUMBAI 400 005. PAN : AABCD7314A. / VS. DY.COMMISSIONER OF INCOME - TAX CIRCLE 3(1) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : --- NONE --- /RESPONDENT BY : SHRI KAILASH KANOJIYA / DATE OF HEARING : 03.05.2017 / DATE OF PRONOUNCEMENT : 21.06.2017 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 21.01.2009 AND PERTAINS TO ASSESSMENT YEAR 2006-2007. 2. THE GROUNDS OF APPEAL READ AS UNDER:- THE FOLLOWING GROUNDS OF APPEAL ARE WITHOUT PREJUDICE TO ONE ANOTHER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ['CIT(A)'] ERRED IN MAKING AN ADDITION OF RS.40.06,911 UNDER SECTION 69C OF THE INCOME TAX ACT ('THE ACT') BY TREATING PURCHASES AND COMMISSION AS BOGUS EXPENSES ON ACCOUNT OF (I) DIFFERENCE IN BALANCES OF CREDITORS AMOUNTING TO RS.20,64,553 (II) NON RECEIPT OF REPLY FROM CREDITOR PARTIES AMOUNTING TO RS.3,63,074 AND (III) UNSERVED NOTICE UNDER SECTION 133(6) OF THE ITA NO.4238/MUM/2012. M/S.NUEVO CONSULTANCY SERVICES LIMITED. 2 ACT BY POSTAL DEPARTMENT FOR CREDITORS AMOUNTING TO RS. 15,79,284. 2. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT HAS NEITHER FURNISHED ANY INACCURATE PARTICULARS OF INCOME NOR CONCEALED ANY PARTICULARS OF INCOME. 3. THE LEARNED CIT(A) ERRED IN COMPLETING THE ASSESSMENT ON THE BASIS OF CONJECTURE, SUSPICION AND SUMMARIZING WITHOUT ANY MATERIAL OR BASIS AND BY IGNORING THE RELEVANT MATERIALS PLACED ON RECORDS BY THE APPELLANT IN SUPPORT OF ITS SUBMISSIONS AND THEREFORE, THE APPELLANT PRAYS THAT ADDITION OF RS.40,06,911 MAY BE DELETED. 4. THE LEARNED DY. COMMISSIONER OF INCOME TAX ERRED IN MAKING APPELLANT RESPONSIBLE FOR PRODUCING THE CREDITOR PARTIES WITHOUT ISSUING SUMMONS UNDER SECTION 131 OF THE ACT FROM HIS END. 5. THE LEARNED CIT(A) ERRED IN MAKING ADDITION OF RS.20,64,553 BY IGNORING RECONCILIATION OF CREDITOR BALANCES AND OTHER EXPLANATION SUBMITTED TO HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THEREFORE, THE APPELLANT PRAYS THAT ADDITION OF '20,64,553 MAY BE DELETED. 6. THE LEARNED CIT(A) FAILED TO UNDERSTAND THAT THE APPELLANT DOES NOT HAVE ANY DIRECT CONTROL OVER THE CREDITORS FOR (I) NON ACCEPTANCE OF NOTICE UNDER SECTION 133(6) OF THE ACT AND (II) NOT GIVING REPLY TO NOTICE UNDER SECTION 133(6) OF THE ACT AND THEREFORE, THE APPELLANT PRAYS THAT ADDITION OF RS.9,32,888 MADE ON ACCOUNT OF NON-ACCEPTANCE OF NOTICE AND NON- SUBMISSION OF REPLY TO SUCH NOTICE MAY BE DELETED. 7. THE LEARNED CIT(A) FURTHER ERRED IN DISALLOWING SUNDRY CREDITOR REPRESENTING OPENING CREDIT BALANCE (ON ACCOUNT OF PURCHASE OF AY 2004-05) OF RS.10,09,470. THIS SUM IS INCLUDED IN POINT NO 5 OF GROUND OF APPEAL. THIS AMOUNT WAS WRITTEN BACK AND OFFERED TO TAX AS INCOME IN AY 09-10. ACCORDINGLY, IT SHOULD BE ALLOWED AS AN EXPENSE IN AY 06-07. ITA NO.4238/MUM/2012. M/S.NUEVO CONSULTANCY SERVICES LIMITED. 3 8. THE LEARNED CIT(A) OUGHT TO HAVE UNDERSTOOD THAT ALL EVIDENCES AND MATERIALS REGARDING PURCHASES AND COMMISSIONS WERE PRODUCED BY THE APPELLANT AND THEREFORE, ADDITION OF RS.40,06,911 MADE BY HIM IS ARBITRARY AND WITHOUT ANY BASIS AND SAME SHOULD BE DELETED. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PROVISIONS OF SEC, 69C OF THE ACT IS NOT APPLICABLE AND THEREFORE, THE APPELLANT PRAYS THAT ADDITION OF RS.40,06,911 MAY BE DELETED. 10. THE APPELLANT PRAYS THAT: I) ADDITION OF RS.40,06,911 MAY BE DELETED; II) AN OPPORTUNITY TO BE HEARD MAY BE GRANTED; III) ANY OTHER RELIEF YOUR HONOURS MAY DEEM FIT. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. IN THIS CASE, THE GROUNDS OF APPEAL PERTAINS TO VARIOUS ADDITIONAL U/S 69C TOTALING RS.1,02,27,062. THE ASSESSING OFFICER ISSUED NOTICES U/S 133(6) TO VARIOUS PARTIES AND IT WAS FOUND (I) DISCREPANCY IN THE AMOUNT OF PURCHASES SHOWN BY THE ASSESSEE AND THE PURCHASES PARTY. (II) LETTERS SENT TO THE PURCHASE PARTIES BUT RECEIVED BACK UNSERVED. (III) LETTERS SENT TO THE PURCHASE PARTIES BUT THERE WAS NO RESPONSE FROM THEM. THE AO GAVE OPPORTUNITY FOR RECONCILIATION AND ASKED THE ASSESSEE- COMPANY TO PRODUCE THE PARTIES TO PROVE THE GENUINENESS OF TRANSACTION, BUT NEITHER RECONCILIATION WERE SUBMITTED NOR PARTIES WERE PRODUCED. THE ASSESSING OFFICER, THEREFORE, MADE ADDITIONS TOTALING RS.1,02,27,062. 3. BEFORE THE LEARNED CIT(A), ASSESSEE FILED ADDITIONAL EVIDENCES. THE LEARNED CIT(A) OBTAINED THE REMAND REPORT. ASSESSEES COMMENTS ON THE ITA NO.4238/MUM/2012. M/S.NUEVO CONSULTANCY SERVICES LIMITED. 4 SAME WERE ALSO OBTAINED. THEREAFTER, LEARNED CIT(A) GRANTED THE RELIEF BY HOLDING AS UNDER:- (I) MEGA INFOTAINMENT: M/S.MEGA INFOTAINMENT CONFIRMED THAT THEY HAD MADE TRANSACTION WITH THE ASSESSEE BUT THERE WAS DIFFERENCE IN ACCOUNT BY RS.14,16,661. THE ASSESSEE SUBMITTED THAT THE DIFFERENCE WAS ON ACCOUNT OF MORE DEBITS IN ITS BOOKS OF ACCOUNT OF SERVICE TAX, TDS AND INTEREST. THE AO IN THE REMAND REPORT HAD STATED THAT THE ASSESSEE HAS FAILED TO FURNISH SUPPORTING EVIDENCES TO BACK ITS RECONCILIATION STATEMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS THROUGH THE PAPER BOOK, HENCE, THE ADDITION MADE IN THE ASSESSMENT ORDER STILL HOLDS GOOD. THOUGH, THE ASSESSEE SAYS THAT IT HAS GIVEN THE AMOUNT OF RS.14,16,661 IS ON ACCOUNT OF SERVICE TAX AND TDS, NOT AN IOTA OF EVIDENCE HAS BEEN PRODUCED IN COURSE OF ASSESSMENT IN 2008 TILL THE END OF APRIL 2012. THE ADDITION IS, THEREFORE, CONFIRMED. (II) ONLINE INFOTAINMENT: IN THIS CASE ALSO THOUGH, THE APPELLANT SAYS THAT IT HAS GIVEN THE AMOUNT OF RS.3,45,831 IS ON ACCOUNT OF SERVICE TAX AND TDS, NOT AN IOTA OF EVIDENCE HAS BEEN PRODUCED IN COURSE OF ASSESSMENT IN 2008 TILL THE END OF THE APRIL 2012. THE ADDITION IS, THEREFORE, CONFIRMED. (III) NETMAGIC SOLUTIONS PVT LTD : THE APPELLANT HAS FAILED TO RECONCILE THE DIFFERENCE AND THE BILL TOO PERTAINS TO AY 2007-08 AND THE AO'S OBSERVATION THEREFORE THAT THE ITA NO.4238/MUM/2012. M/S.NUEVO CONSULTANCY SERVICES LIMITED. 5 EXPENSE IS NOT ALLOWABLE IN AY 2006-07 IS FOUND TO BE CORRECT AND THE ADDITION OF RS.2,64,159 IS, THEREFORE, CONFIRMED. (IV) ONLINE INFOTAINMENT: IN THIS CASE ALSO THOUGH, THE APPELLANT SAYS THAT IT HAS GIVEN THE AMOUNT OF RS.10,144 IS ON ACCOUNT OF CHEQUE BOUNCE CHARGES AND TDS. THE ADDITION IS, THEREFORE, CONFIRMED. (V) ROHIT ENTERPRISES: DESPITE LAPSE OF SUCH A LONG TIME, APPELLANT HAS FAILED TO FURNISH EVEN THE CONFIRMATION FROM THE PARTY, THEREFORE, THE GENUINENESS OF EXPENSES COULD NOT BE ESTABLISHED, ADDITION OF RS.3,63,074 IS, THEREFORE, CONFIRMED. (VI) M/S PAN INDIA NETWORK INFRAVEST PVT LTD: THE AO IN THE REMAND REPORT HAS STATED THAT THE CONFIRMATION OF RS.30,25,389 IS THERE BUT THE AMOUNT OF RS. 27,758 WERE NOT RECONCILED. THE ADDITION OF RS.30,25,389 IS DELETED AND THE ADDITION OF RS.27,758 IS CONFIRMED. (VII) M/S CMC LTD: THE AO IN THE REMAND REPORT HAS STATED THAT THE BALANCE AT THE END OF THE FINANCIAL YEAR AS SHOWN IN THE BOOKS OF ASSESSEE AS WELL AS THAT OF SUNDRY CREDITOR IS SAME, THEREFORE, THE ASSESSEE'S CLAIM MAY BE ACCEPTED. IN VIEW OF AO'S REPORT THE ADDITION OF RS.29,02,520 IS DELETED. ITA NO.4238/MUM/2012. M/S.NUEVO CONSULTANCY SERVICES LIMITED. 6 (VIII) M/S MICROTECH INTERNATIONAL (P) LTD: THE AO IN THE REMAND REPORT HAS OBSERVED THAT IN THE BOOKS OF THE ASSESSEE THE AMOUNT OF SUNDRY CREDITOR SHOWN IS RS.3,20,000 WHEREAS IN THE BOOKS OF M/S MICROTECH THE AMOUNT SHOWN IS RS.4,00,000. THEREFORE, THE ADDITION MAY BE RESTRICTED TO RS.80,000. THE ASSESSEE AT PAGE 35 OF THE PAPER BOOK HAS SHOWN THAT ONE BILL OF RS.80,000 WAS IN DISPUTE, THEREFORE, IT HAS SHOWN SUNDRY CREDITOR AT RS.3,20,000 EVEN OTHERWISE THE APPELLANT HAS SHOWN LESS PURCHASE THAN AN SHOWN IN THE BOOKS OF M/S MICROTECH HENCE THE ADDITION OF RS.3,20,000 IS NOT JUSTIFIED AND THE ADDITION OF RS.3,20,000 IS, THEREFORE, DELETED. (IX) FRONTLINE INFOTECH PVT LTD : DESPITE LAPSE OF MORE THAN FOUR YEARS FROM THE ASSESSMENT PROCEEDINGS, THE APPELLANT HAS FAILED TO FURNISH THE CORRECT ADDRESS OF CONFIRMATION HENCE, THE GENUINENESS OF TRANSACTION HAS NOT BEEN ESTABLISHED, THE ADDITION OF RS.5,69,814 IS, THEREFORE, CONFIRMED. (X) THE SATYAM COMPUTER SERVICES LTD : THE ASSESSEE HAS NOT PAID FOR THE PURCHASES OF RS.10,09,470. THE APPELLANT STATES THAT IT HAS WRITTEN BACK THE AMOUNT OF RS.10,09,470 DURING THE FY 2008-09. AS THE APPELLANT HAS NOT RECEIVED GOODS OR SERVICES OF THE AMOUNT OF RS.10,09,470AND HAS NOT MADE PAYMENTS IN THIS REGARD, THE APPELLANT'S CLAIM IS NOT ALLOWABLE AND THE ADDITION OF RS.10,09,470 IS, THEREFORE, CONFIRMED. 4. AGAINST ABOVE ORDER, ASSESSEE IS IN APPEAL BEFORE US. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENTATIVE. NONE APPEARED ON BEHALF OF THE ITA NO.4238/MUM/2012. M/S.NUEVO CONSULTANCY SERVICES LIMITED. 7 ASSESSEE. THIS CASE HAS BEEN PENDING FOR A LONG TIME, AS NO ONE IS APPEARING ON BEHALF OF THE ASSESSEE, WE PROCEED TO ADJUDICATE THE ISSUES RAISED ON THE BASIS OF PERUSAL OF MATERIALS ON RECORD AND UPON HEARING THE LEARNED DEPARTMENTAL REPRESENTATIVE. 5. UPON CAREFUL CONSIDERATION, WE FIND THAT THE ADDITION IN THIS CASE HAVE BEEN SUSTAINED BY THE LEARNED CIT(A) ON VERY COGENT REASONING. THE ADDITIONAL EVIDENCES FILED BY THE ASSESSEE HAVE BEEN EXAMINED BY THE ASSESSING OFFICER AND THEREAFTER UPON HIS COMMENTS AND ASSESSEES REBUTTALS, LEARNED CIT(A) HAS EXAMINED EACH AND EVERY ITEM AND THEREAFTER GIVEN HIS REASONING FOR SUSTAINING THE ADDITION AND PARTLY GRANTING RELIEF. THE ADDITIONS SUSTAINED BY THE LEARNED CIT(A) ARE BASED UPON ABSENCE OF EVIDENCE REGARDING THE VERACITY. IN THE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THERE IS NO INFIRMITY IN THE ORDER OF THE LEARNED CIT(A). ACCORDINGLY, WE UPHOLD THE SAME. 6. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON THIS 21 ST DAY OF JUNE, 2017. SD/- SD/- ( PAWAN SINGH ) ( SHAMIM YAHYA ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED : 21 ST JUNE, 2017. DEVDAS* / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. ITA NO.4238/MUM/2012. M/S.NUEVO CONSULTANCY SERVICES LIMITED. 8 / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 4. / CIT(A), MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.