DATABASE SOFTWARE TECHNOLOGY P.LTD, MUMBAI V. ITO 3(1)(2), MUMBAI

ITA 4319/MUM/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9885 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-06-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 18-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Business income; Search and seizure; Document seized; Peak credit; Additional evidence; Reasonable cause; Avoidance of tax; Accommodation entries; Documents seized
• Section: 143(3); 133A; 133(6); 147; 68; 148; 10; 154; 11

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH D MUMBAI BEFORE SHRI D.T.GARASIA , JM AND SHRI RAJESH KUMAR, AM I.T.A. NO. 43 19 TO 4323 /MUM/20 1 4 ( / ASSESSMENT YEAR S : 20 05 - 06 TO 2009 - 10 ) DATABA SE SOFTWARE TECHNOLOGY PVT LTD, 1010, MAKER CHAMBERS V, NARIMAN POINT, MUMBAI - 400021 / VS. INCOME TAX OFFICER 3(1)(2), R.NO.666, 6 TH FLOOR, AAYKAR BHAVAN, M K ROAD, MUMBAI - 400020. I.T.A. NO. 4399 TO 4403 /MUM/20 1 4 ( / ASSESSMENT YEAR S : 2005 - 06 TO 2009 - 10 ) INCOME TAX OFFICER 3(1)(2), MUMBAI - 400020. / VS. DATABASE SOFTWARE TECHNOLOGY PVT LTD, MUMBAI - 400021 ./ PAN : AABCD3835C ( / APPELLANT) : ( / RESPONDENT ) / A SSESSEE BY : S/ SHRI RAJEEV KHANDELWAL AND NEEL KANTH KHANDELWAL / RE VENUE T BY : SHRI PURUSHOTTAM KUMAR / DATE OF HEARING : 23.6 .2017 / DATE OF PRONOUNCEMENT : 07.0 7 . 201 7 / O R D E R PER RAJESH KUMAR, A. M: THE CAPTIONED ARE CROSS - APPEAL S BY THE ASSESSEE AND REVENUE PERTAINING TO ASSESSMENT YEAR S 2005 - 06 TO 2009 - 10 . THE APPEALS ARE 2 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) DIRECTED AGAINST THE ORDER OF THE CIT(A) - 6, MUMBAI , DATED 28.3.2014 WHICH IN TURN HA VE ARISE N FROM AN ORDER PASSED BY THE ASSES SING OFFICER DATED 2 9 .12.20 11 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT). 2. THE ASSESSEE HAS CHALLENGED THE ORDER OF LD.CIT(A) ON THE ISSUE OF UPHOLDING THE PROCEEDINGS UNDER SECTION 147 OF THE ACT. HOWEVER, WE ARE FIRST TAKING U P THE APPEALS OF THE REVENUE IN WHICH THE REVENUE HAS CHALLENGED THE DELETION OF ADDITION ON MERIT. ITA NO.4399/MUM/2014. 3 . THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 31.10.2005 DECLARING A LOSS OF RS.7,11,546/ - , WHICH WAS PR OCESSED UNDER SECTION 143(1) OF THE ACT ON 24.1.2006. THE AO RECEIVED A LETTER F ROM ADIT (INV) BEARING ADIT(INV)/U - VII(1)/A.DALMIA/2011 - 12 DATED 28.12.2011 A N D ADIT(INV) - VII(1)(2), MUMBAI REGARDING THE INVESTIGATION IN THE CASE OF ARUN DALMIYA AND HARSH AD DALMIYA AND THEIR DUMMY CONCERN S ACCOMPANYING THEREWITH REPORT OF CBI/ACB AND SECRET NOTE PREPARED BY JOINT DIRECTOR, CBI ALONG WITH THE EXTRACT OF SCRUTINY R EPORT PREPARED BY THE CHARTERED ACCOUNTANT ON THE BASIS OF SEIZED BOOKS OF ACCOUNT AND DOCUM ENTS . IT WAS POINTED OUT IN THE CBI AND ACB REPORT THAT THE INVESTIGATION INTO THE AFFAIRS OF ARUN DALMIYA AND HARSHAD DALMIYA WITH REFERENCE TO SHRI M . S . BALI EX - POST MASTER GENERAL, MAHARASHTRA AND GOA THAT THEY HAVE FORMED 20 3 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) DUMMY CONCERNS WHICH W ERE ENGAGED INTO PROVIDING BOGUS TRANSACTIONS AND ACCOMMODATION ENTRIES. IT WAS ALSO REPORTED THAT THE ASSESSEE HAS ENTERED INTO TRANSACTION S WITH RADIOVANI HOLDING PVT LTD WORTH 2 1.02 CRORES FOR WHICH NO CONTRACT S/ DETAILS WERE FOUND. FURTHER THE JOINT DIRECTOR OF CBI STATED THAT ARUN DALMIYA AND HARSHAD DALMIYA WERE DIRECTORS OF M/S WATERMARK FINANCIAL CONSULTANTS LTD AND HAVING ITS OFFICE AT 101 0 , MAKAR CHAMBER, (V) NARIMAN POINT MUMBAI - 400021 AND WERE RUNNING 20 COMPANIES FROM THE SAM E ADDRESS . AL L THESE COMPANIES WERE SHOWING BUSINESS OF PURCHASE, SALE S AND DEVELOPMENT OF SOFTWARE WHEREAS AS A MATTER OF FACT THEY WERE NOT DOING ANY BUSINESS AS THERE WAS NO INFRASTRUCTURE OR TECHNICAL OR OTHER MANPOWER IN THE SAID CONCERN S . FOR THE S AKE OF READY REFERENCE, WE REPRODUCE PROFIT AND LOSS ACCOUNT OF THE COMPANY AS EXTRACTED BY THE AO AT PAGE 3 OF THE ASSESSMENT ORDER WHICH IS AS UNDER : INCOME: SALES MISCELLANEOUS INCOME CLOSING STOCK OF COMPUTERS/SOFTWARE RS. 106,64,15,000 3003 13,65,21 ,000 120,29,39,003 EXPENDITURE: PURCHASES ADMINISTRATIVE EXPENSES SELLING AND DISTRIBUTION EXP FINANCIAL EXP PROFIT/(LOSS) RS. 120,31,05,000 3,95,302 1,48,920 1,327 120,36,50,549 (7,11,546) - 4 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) 4 . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO CALLE D FOR FROM THE ASSESSEE TO PRODUCE DETAILS OF PURCHASE AND SALES WHICH W ERE FURNISHED BY THE ASSESSEE SHOWING THE NAME AND ADDRESSES OF THE PARTIES INCLUDING AMOUNT AND DAT E ETC . THE AO ON PERUSAL OF THE DETAILS OF PURCHASE AND SALES FURTHER REQUIRED T HE ASSESSEE VIDE LETTER DATED 8.2.2013 TO FURNISH CERTAIN DETAILS AS HAS BEEN MENTIONED BY THE AO AT PAGE 4 OF THE ASSESSMENT ORDER. HOWEVER, THE ASSESSEE FURNISHED SOME OF THE DETAILS VIDE ITS WRITTEN STATEMENT DATED 15.2.2013 WHICH WERE INCOMPLETE STA TING THAT THE SAME WERE NOT AVAILABLE WITH THE ASSESSEE AS RECORDS WERE IN THE POSSESSION OF CBI. THEREAFTER ANOTHER SHOW CAUSE NOTICE WAS ISSUED ON 27.2.2013 CALLING UPON THE ASSESSEE TO FURNISH VARIOUS DETAILS AS STATED BY THE AO AT PAGE S 5 AND 6 OF THE ASSESSMENT ORDER. THE ASSESSEE REPLIED T HE SAID SHOW CAUSE NOTICE BY LETTER DATED 20.3.2013 AND ALSO FURNISHED COMPUTER STATEMENT OF QUANTITATIVE DETAILS FOR PURCHASE AND SALES OF SOFTWARE AND A COPY OF VAT PAYMENT CHALLAN OF RS.99,35,200/ - . THE AO FOUND ON THE EXAMINATION OF THE DETAILS FILED BY THE ASSESSEE THA T THE PAYMENT W AS NOT MADE BY THE ASSESSEE BUT WAS CREDITED TO INDIGO E NTER TAINMENT P LTD AND THE QUANTITATIVE DETAILS GENERATED FROM COMPUTER WERE NOT SUPPORT ED WITH ANY DOCUMENTARY EVI DENCE SUCH AS TRANSPORT AND DELIVERY CHALLAN S . THE NOTICES ISSUED U/S VARIOUS CUSTOMERS AND SUPPLIERS U/S 133A OF THE ACT OUT OF WHICH NOTICES TO THREE PARTIES INCLUDING M/S STADS LTD AND P ASHUPATI FABRIC LTD WERE RETURNED 5 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) UNSERVED AND THE ASSESSEE COU LD NOT FURNISH THE DETAILS AND THEIR WHEREABOUTS. T HE LD.AR OF THE ASSESSEE STATED THAT ALL THE RECORDS OF THE FUNDS HAVE BEEN SEIZED BY THE CBI DURING THE RAIDS AT THEIR PREMISES AND IT WAS NOT POSSIBLE FOR THE ASSESSEE TO FILE THE DETAILS AS CALLED FOR BY THE AO. THE AO FOUND FROM THE PERUSAL OF THE BANK STATEMENT THAT THE ASSESSEE HAS ENTERED INTO SEVERAL TRANSACTION S OF FUNDS TRANSFER S IN THE GROUP CONCERNS AND THE AS SESSEE WHICH W ERE ALSO REPORTED BY T HE CBI. THE AO ALSO OBSERVED THAT THE AS SESSEE HAS MADE SALES AND PURCHASE RUNNING IN THE SEVERAL CRORES OF RUPEES WITHOUT HAVING NECESSARY INFRASTRUCTURE AND THE TECHNICAL STAFF REQUIRED FOR DEVELOPMENT OF SOFTWARE AND FINALLY CAME TO THE CONCLUSION THAT THE ASSESSEE WAS ENGAGED IN PROVIDING HA WALA ENTRIES . IN ORDER TO ASSESS THE INCOME OF THE ASSESSEE HE CALCULATED PEAK CREDIT ON THE BASIS OF DEPOSITS AND WITHDRAWAL S IN THE BANK STATEMENTS WHICH H AS BEEN TABULATED AT PAGES 11 AND 12 OF THE ASSESSMENT ORDER. THE AO OBSERVED THAT THE ASSESSEE HAS RAISED HUGE UNSECURED LOANS FOR WHICH NO CONFIRMATION S W ERE PRODUCED AND FINALLY ADDED A SUM OF RS.10,00,503/ - BEING PEAK CREDIT ON 25.10.2004 TO THE TOTAL INCOME OF THE ASSESSEE. 5 . SIMILARLY, THE AO OBSERVED THAT SALE AND PURCHASES AS SHOWN BY AS SESSEE WHEREAS AS A MATTER OF FACT THERE WERE NO ACTUAL PURCHASE S OR SALE S OF MATERIAL AND ACCORDINGLY ISSUED SH OW NOTICE DATE 27.2.2013 TO SHOW 6 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) CAUSE AS TO WHY THE PERCENTAGE ON SALE SHOULD NOT BE APPLIED AND ADDED BACK TO THE TOTAL INCOME OF THE ASS ESSEE WHICH WAS REPLIED BY THE ASSESSEE BY STATING VIDE LETTER DATED 19.3.2013 THAT TAX TO PEAK CREDITS AND PERCENTAGE OF SALES WERE CONTRARY TO FACTS ON RECORDS AS ALL THE TRANSACTIONS AND BANKS ACCOUNTS STANDS DISCLOSED IN THE BOOKS OF ACCOUNTS AND RET URN OF INCOME AND TO ASSESS INCOME IN THIS MANNER WOULD AMOUNT TO ASSESSMENT ON PURELY ON CONJUNCTURE AND SURMISES. THE AO REJECTED THE CONTENTION OF THE ASSESSEE AND OBSERVED THAT CASH COMPONENT ACCRUING FROM PERCENTAGE COMMISSION ON HAWALA ENTRIES WAS NOT ROUTED THROUGH BOOKS OF ACCOUNTS AND THEREFORE APPLIED 0.5% OF THE TO T AL SALES OF RS.1,06,64,15,000/ - AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 6 . AT THE TIME OF HEARING, THE LD. DR DID NOT PRESS GROUNDS OF APPEAL NO.1 AND 2 , THE REFORE THE SAME ARE DISMISSED AS NOT PRESSED. 7 . GROUNDS OF APPEAL NO.3 AND 4 ARE AGAINST THE DELETION OF ADDITION OF RS.10,00,523/ - AND RS.53,32,075/ - BY THE LD.CIT(A) AS MADE BY THE AO U/S 68 OF THE ACT ON THE BASIS OF PEAK CREDIT AND BY APPLYING 0. 50% BY THE AO ON THE SALES RESPECTIVELY . 8 . WE HAVE ALREADY DISCUSSED T HE FACTS QUA THE SAID TWO ADDITION S OF RS. RS.10,00,523/ - AND RS.53,32,075/ - IN THE FOREGOING PARAGRAPH S . THE 7 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) ASSESSEE AGGRIEVED BY THE ORDER AO FILED AN APPEAL BEFORE LD.CIT(A) WHO ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE SAID ADDITION S BY OBSERVING AND HOLDING AS UNDER : 14.8 I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF THE APPELLANT AS WELL AS THE FACTS OF THE CASE. I HAVE ALSO GONE THROUGH THE REMAND REPORT OF THE A O AS WELL AS THE ADDITIONAL. EVIDENCES SUBMITTED BY THE APPELLANT. I HAVE ALSO PERUSED THE COPIES OF ACCOUNTS, TAX AUDIT REPORTS, CONFIRMATIONS OF THE PARTIES, AS WELL AS OTHER DOCUMENTS SUBMITTED BY THE APPELLANT. FIRST OF ALL IT IS SEEN THAT THE APPELLAN T IS A TRADER IN SOFTWARE AND NOT A MANUFACTURER. FOR THE CURRENT YEAR, THE APPELLANT'S BALANCE SHEET AND P&L ACCOUNT ARE AS UNDER (COMPLETE STATUTORY ACCOUNTS ALONG WITH THE ANNEXURES AND COMPLETE TAX AUDIT REPORT HAVE BEEN FURNISHED BY THE APPELLANT): BALANCE SHEET SOURCES OF FUNDS SCHEDULE AMOUNT IN RS. 1.SHAREHOLDERS FUNDS A.SHARE CAPITAL A 5,00,000 B.RESERVES AND SURPLUS B (6,35,084) (1,35,084) 2.UNSECURED LOANS C 46,62,57,785 TOTAL 46,61,22,701 APPLICATION OF FUNDS 1. INVESTMENTS D 15,00,00,000 2. CURRENT ASSETS, LOANS & ADVANCES E A. INVENTORY 1 3,65,21,000 B.SUNDRY DEBTORS 16,23,08,128 C. CASH & BANK BALANCES 34,144 D. LOANS & ADVANCES 53,77,80,733 83,66,44,005 LESS: CURRENT LIABILITIES AND PROVISIONS F (52,05,2 1,304) 31,61,22,701 TOTAL 46,61,22,701 8 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) P&L ACCOUNT INCOME: SCHEDULE AMOUNT IN RS. SALES 106,64,15,000 MISCELLANEOUS INCOME A 3003 CLOSING STOCK OF COMPUTERS/SOFTWARE B 13,65,21,000 TOTAL 120,29,39,003 EXPENDITURE: COST O F PURCHASES 120,31,05,000 ADMINISTRATIVE EXPENSES G 3,95,302 SELLING AND DISTRIBUTION EXP H 1,48,920 FINANCIAL EXP I 1,327 PRELIMINARY EXPENSES WRITTEN OFF --- TOTAL 120,36,50,549 PROFITL(LOSS) BEFORE TAX (7,11,546) 14.9 IT IS ALSO SE EN THAT THE ABOVE STATUTORY ACCOUNTS HAVE BEEN PREPARED AND DULY CERTIFIED BY THE AUDITORS, MAHESH KUMAR JAIN & CO. CHARTERED ACCOUNTANTS AS PER THE PROVISIONS OF THE COMPANIES ACT, 1956. SIMILARLY, THE APPELLANT'S ACCOUNTS HAVE ALSO BEEN AUDITED AS PER TH E PROVISIONS OF SECTION 44AB OF THE INCOME TAX ACT, 1961. IT IS ON THE BASIS OF ABOVE TWO AUDITS CARRIED OUT BY THE CONCERNED CHARTERED ACCOUNTANTS THAT THE RETURN OF INCOME HAS BEEN PREPARED AND FILED BY THE APPELLANT. 14.10 SO FAR AS THE ISSUE OF ADMIS SION OF ADDITIONAL EVIDENCES IS CONCERNED, IT IS SEEN THAT THE APPELLANTS PREMISES WERE SEARCHED BY THE CBI AND ALL THE RELEVANT DOCUMENTS AND DETAILS WERE TAKEN AWAY BY THEM. ACCORDINGLY, THE APPELLANT COULD NOT FILE THESE ADDITIONAL EVIDENCES BEFORE AO DUE TO A REASONABLE CAUSE. HENCE, THE CONDITIONS PRESCRIBED IN RULE 46A FOR ADMISSION OF ADDITIONAL EVIDENCES ARE SATISFIED. SAME ARE THEREFORE ADMITTED FOR ADJUDICATION . 9 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) 14.11 WE NOW MUST ANALYSE THE EVIDENCE AGAINST THE APPELLANT REGARDING TH E ALLEGATION OF PROVIDING ACCOMMODATION ENTRIES TO OTHER PARTIES. SUCH EVIDENCE, IF ANY, CAN BE SUMMARIZED AS UNDER: A NOTE PREPARED BY CSI APPARENTLY WITH THE AID OF A CHARTERED ACCOUNTANT, WHEREIN THE SEIZED BOOKS OF ACCOUNT AND DOCUMENTS WERE ANALYS ED IN RC. B A1/2010/A0006 AND IT WAS CONCLUDED THAT THE GROUP WAS INVOLVED IN MONEY LAUNDERING AND PROVIDING ACCOMMODATION ENTRIES. THIS NOTE SHOWS THAT ONLY A SCRUTINY OF THE SEIZED DOCUMENTS WAS CARRIED OUT AND CONCLUSIONS WERE DRAWN ONLY ON THAT BASIS. NO INDEPENDENT ENQUIRIES WITH THE CONCERNED THIRD PARTIES APPEAR TO HAVE BEEN CARRIED OUT. B ASED ON THE SAID NOTE, A LETTER DATED 05.03.2010 WAS SENT BY JT. DIRECTOR, C B I TO INCOME TAX INVESTIGATION WING TO INVESTIGATE SHRI ARUN DALMIA, SHRI HARSH DALMIA AND THEIR GROUP COMPANIES FOR EVASION OF TAX. FURTHER, A REPORT DATED 21(29)/12/2010 OF THE SUPT OF POLICE, CSI, AC B , WAS ALSO SENT TO THE INCOME TAX INVESTIGATION WING, WHERE AGAIN SIMILAR ALLEGATIONS HAVE BEEN MADE, SPECIFICALLY IN RESPECT OF A TRAN SACTION CARRIED OUT BY THE APPELLANT' S GROUP COMPANY INDIGO EDUTAINMENT PVT. LTD IN RESPECT OF ACCOMMODATION OF IT SOFTWARE BILLS OF RS. 100.64 CRORES TO A COMPANY RADIOVANI HOLDING PRIVATE LTD BY ENTERING INTO A TRIPARTITE ERP SOFTWARE CONTRACT WITH A CON CERN OF NIGERIA NAME LY DELTA STEEL COMPANY. IT HAS BEEN ALLEGED THAT THIS TRANSACTION WAS ONLY ON PA PER; ACTUAL SUPPLY OF IT SOFTWARE, HAVING NOT TAKEN PLACE. SIMILAR ALLEGATIONS HAVE BEEN LEVELLED AGAINST THE APPELLANT'S GROUP CONCERN BASENT MARKETING PVT. LTD OF GIVING IT SOFTWARE ACCOMMODATION BILLS OF RS. 26.10 CRORES TOA COMPANY GSS AMERICA INFOTECHLTD OF HYDERABAD. AGAIN, THIS TRANSACTION ISSTATED TO BE ONLY ON PAPER; ACTUAL SUPPLY OF IT SOFTWARE, HAVING NOT TAKEN PLACE. IT IS STATED IN THE SAME REPORT THAT BASANT MARKETING PVT. LTD HAS GIVEN AN AGGREGATE AMOUNT OF ACCOMMODATION ENTRIES OF RS. 129.76 CRORES TO VARIOUS COMPANIES. 10 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) SIMILAR ALLEGATION HAS BEEN MADE IN RESPECT OF IT SOFTWARE ACCOMMODATION BILLS GIVEN TO M/S HFCL OF RS. 194 CRORES (THE NAME OF THE COMPANY GIVING THE ACCOMMODATION BILLS HAS NOT BEEN SPECIFIED). IT IS ALSO ALLEGED IN THE REPORT OF SUPDT OF POLICE, CBI, ACB THAT SHRI ARUN DALMIA AND HIS SON SHRI HARSH DALMIA THROUGH THEIR CONCERN BASANT MARKETING PVT. LTD AND SATYA SEC URITIES LTD. ACQUIRED 5.55% SHAREHOLDING IN GRANULES INDIA LTD WITHOUT FOLLOWING THE NORMS OF SECURITIES A EXCHANGE BOARD OF INDIA ACT, 1992 IN CONNIVANCE WITH THE PROMOTERS OF THE SAID CONCERN (GRANULES INDIA LTD). ALSO, SIMILAR ACTS WERE DONE BY THEM THR OUGH BASANT MARKETING PVT. LTD IN RESPECT OF ANOTHER TWO COMPANIES WELSPUN CORPORATION AND HFCL IN CONNIVANCE WITH THE DIRECTORS OF THESE COMPANIES . NO FURTHER ENQUIRIES HAVE BEEN CARRIED OUT BY THE INCOME TAX INVESTIGATION WING AND THE ABOVE LETTERS OF JT. DIRECTOR, CBI AND SUPT OF POLICE, CBI, ACB ALONG WITH THE NOTE WERE FORWARDED BY THE WING TO THE AO. THE A O CONDUCTED SOME ENQUIRIES UNDER SECTION 133(6) WITH STADS LTD, PASHUP ATI FABRIC LTD, RADIOVANI HOLDINGS PVT. LTD AND HFCL. THE NOTICES UND ER SECT ION 133(6) IN THE CASES OF STADS LTD, PASHUPATI FABRIC LTD AND RADIOVANI HOLDINGS P VT LTD WERE RETURNED UN - SERVED, WHEREAS THE HFCL SUBMITTED THE CONFIRMATION, BUT DELIVERY CHALLANS, WHICH WERE CALLED FOR BY THE AA WERE NOT SUBMITTED BY HFC L THE A O ALSO CONDUCTED ENQUIRIES IN RESPECT OF THE EMPLOYEES OF THE APPELLANT AND THE APPELLANT SUBMITTED THE LIST OF THE NAMES OF PERSONS EMPLOYED; BUT THEIR ADDRESSES WE R E NOT SUBMITTED. 14.12 AS ALREADY STATED, SINCE THE APPELLANT HAD FURNISHED ADDITIONAL E VIDENCES DURING THE COURSE OF APPELLANT PROCEEDINGS, THE AO, DURING THE REMAND PROCEEDINGS, WAS DIRECTED TO EXAMINE THE SAME AND FURNISH HIS REPORT ON MERITS OF THE CLAIM OF THE APPELLANT THAT NO ACCOMMODATION ENTRIES HAVE BEEN PROVIDED TO ANY PARTY AND TH E TRANSACTIONS IN THE BOOKS OF ACCOUNT ARE GENUINE TRANSACTIONS. HOWEVER, THE AO, DURING THE REMAND PROCEEDINGS HAS NOT EXAMINED THE ADDITIONAL EVIDENCES AND HAS NOT GIVEN ANY COMMENTS IN RESPECT OF THE SAME. THEREFORE, I HAVE EXAMINED ALL THE DOCUMENTS FU RNISHED BY THE APPELLANT AS WELL AS THE ADDITIONAL EVIDENCES. IN THE BACKGROUND OF 11 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) ABOVE DISCUSSION AS WELL AS AFTER EXAMINATION OF THE DOCUMENTS FURNISHED BY THE APPELLANT, THE FACTS WHICH HAVE EMERGED ARE AS UNDER: (I) DURING THE COURSE OF SEARCH OPERA TION IN THE PREMISES OF THE APPELLANT, NO INCRIMINATING DOCUMENTS INDICATING THE APPELLANT'S INVOLVEMENT IN PROVIDING ACCOMMODATION ENTRIES WERE FOUND OR SEIZED. (II) THE REPORT OF THE CHARTERED ACCOUNTANT ENGAGED BY THE CBI IS PURELY BASED ON THE SCRUTI NY OF REGULAR BOOKS OF ACCOUNT AND DOCUMENTS OF THE APPELLANT WHICH WERE SEIZED BY THE CBI. THE CBI/THE CHARTERED ACCOUNTANT HAVE NOT CARRIED OUT ANY INDEPENDENT ENQUIRIES WITH THE THIRD PARTIES, TO WHOM ACCOMMODATION ENTRIES ARE ALLEGED TO HAVE BEEN GIVEN BY THE APPELLANT OR ITS GROUP CONCERNS. NEITHER DID THE CBI/THE CHARTERED ACCOUNTANT CONFRONTED THESE ALLEGATIONS REGARDIN G ACCOMMODATION ENTRIES TO THE APPELLANT (SHRI ARUN DALMIA OR SHRI HARSH DALMI OR ANY OTHER OFFICIAL OF THE COMPANY), NOR THEIR EXPLA NATION WAS CALLED. (III) THUS, BOTH THE REPORTS OF THE CBI ARE BASED ON A UNILATERAL SCRUTINY OF DOCUMENTS OF THE APPELLANT GROUP AND CONCLUSIONS HAVE BEEN DRAWN, IGNORING THE FACT THATTHE REGULAR BOOKS OF ACCOUNT OF THE APPELLANT ARE SUPPORTED BY NECES SARY BILLS/VOUCHERS/OTHER DOCUMENTS. THE STATUTORY AUDIT AS PER THE COMPANIES ACT, 1956 AND TAX AUDIT AS PER SECTION 44AB OF THE INCOME TAX ACT, 1961 HAVE ALSO BEEN CARRIED OUT, WHERE - IN NO - FAULT WAS FOUND WITH THE APPELLANT'S BOOKS OF ACCOUNT AND THE T RANSACTIONS ENTERED THEREIN. (IV) IT MAY BE NOTED THAT NO THIRD PARTY HAS INDEPENDENTLY CONFIRMED THE ALLEGATION OF BEING A BENEFICIARY OF ACCOMMODATION BILLS OR OF MONEY - LAUNDERING. (V) THE INCOME TAX INVESTIGATION WING ALSO DID NOT CARRY OUT ANY FURT HER ENQUIRIES AND SIMPLY FORWARDED THE REPORTS OF THE CBI TO THE AO. (VI) ON HIS PART, THE AO ISSUED NOTICES UNDER SECTION 133(6) TO 4 PARTIES NAMELY 1) STADS LTD, 2) PASHUPATI FABRIC LTD, 3) RADIOVANI HOLDINGS PVT. LTD AND 4) HFCL. THE NOTICES UNDER SEC TION 133(6) 12 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) IN THE CASES OF STADS LTD, PASHUPATI FABRIC LTD AND RADIOVANI HOLDINGS PVT. LTD WERE RETURNED UN - SERVED, WHEREAS THE HFCL SUBMITTED THE CONFIRMATION IN RESPECT OF THE TRANSACTION CARRIED OUT BY HFCL WITH THE APPELLANT. THE AO ALSO DIRECTED THE APPELLANT TO FURNISH THE DETAILS OF THE EMPLOYEES OF THE APPELLANT AND THE APPELLANT SUBMITTED THE LIST OF THE NAMES OF PERSONS EMPLOYED; ALTHOUGH THEIR ADDRESSES WERE NOT SUBMITTED. THE AO OBSERVED THAT THE APPELLANT HAS PURPORTEDLY MADE SALES/PURCHASES WORTH SEVERAL CRORES OF RUPEES, WITHOUT NECESSARY INFRASTRUCTURE IN TERMS OF EITHER STAFF/ PREMISES OR ANY TECHNICAL PERSONNEL KNOWING SOFTWARE RELATED ISSUES. ON THE BASIS OF THIS MEAGRE ENQUIRY, THE AO CONCLUDED THAT THE APPELLANT IS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES, WITHOUT CONSIDERING THE FACT THAT THE APPELLANT WAS MERELY A TRADER IN SOFTWARE AND NOT A MANUFACTURER OF SOFTWARE. (VII) IN THE CASE OF THE FIRST THREE PARTIES NAMELY 1) STADS LTD, 2) PASHUPATI FABRIC LTD AND 3) RADIOVANI HOLDING S PVT. LTD, THE NOTICES HAD RETURNED UN - SERVED BECAUSE 1) STADS LTD HAD GOT CLOSED DOWN AND WAS STRUCK OFF AS PER WEBSITE OF REGISTRAR OF COMPANIES AS ON DATE. THE APPELLANT HAS NOW FILED THE INVOICES, CONFIRMATIONS AND LEDGER ACCOUNT OF STADS LIMITED BEFO RE THE UNDERSIGNED AS ADDITIONAL EVIDENCE (THESE WERE IN THE CUSTODY OF THE CSI AND COULD NOT BE FILED BEFORE THE AO. THE PASUPATI FABRICS LTD HAS BEEN IN LIQUIDATION MUCH BEFORE THE RE- ASSESSMENT OF THE APPELLANT AND ITS ADDRESS HAD CHANGED. FURTHER, THER E WERE NO DEALINGS OF THE APPELLANT WITH PASUPATI FABRICS LTD AND RADIOVANI HOLDINGS PVT. LTD DURING THE CURRENT YEAR. SO FAR AS THE STADS LTD IS CONCERNED, THE APPELLANT, AS STATED ABOVE HAS FILED CONFIRMATION FROM THE SAID PARTY. (VIII) IN THE CASE OF HFCL, THE NOTICE OF THE AD ULS 133(6) WAS COMPLIED WITH, AS IS EVIDENT FROM THE ASSESSMENT ORDER. THE AD IN THE ASSESSMENT ORDER HAS FURTHER MENTIONED THAT CERTAIN AMOUNT HAS BEEN WRITTEN OFF BY HFCL WHICH IS DUE FROM THE APPELLANT. IN THIS REGARD, THE APP ELLANT HAS STATED THAT IT IS STILL REQUIRED TO PAY THE OUTSTANDING' DUES TO HFCL AND SUCH OUTSTANDING AMOUNT IS REFLECTED IN ITS BOOKS OF ACCOUNT. HOWEVER, FROM THE ASSESSMENT ORDER IT IS SEEN THAT THIS ISSUE DOES NOT PERTAIN TO THE CURRENT YEAR AND IT PER TAINS ONLY TO ASSESSMENT YEAR 2006 - 07. SO FAR AS THE AD'S ALLEGATION REGARDING MODE OF 13 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) DELIVERY OF GOODS IS CONCERNED, THE APPELLANT HAS SUBMITTED A LETTER DATED 28/03/2014, EXPLAINING THE SAME. (IX) YET ANOTHER ALLEGATION AGAINST THE APPELLANT GROUP IS THAT IT HAS FLOATED 20 DUMMY COMPANIES THROUGH WHOM ACCOMMODATION ENTRIES ARE MANAGED. HOWEVER, IT IS ONLY AN OBSERVATION OF THE CHARTERED ACCOUNTANT OF THE CBI AND NO HOLISTIC ENQUIRIES IN THIS REGARD HAVE BEEN CONDUCTED EITHER BY THE CBI OR BY THE I. T. DEPARTMENT INVESTIGATION WING OR BY THE AD. THE AD HAS PURELY ASSUMED THE SAID OBSERVATION OF THE CBI AND THE INVESTIGATION WING TO BE TRUE AND HAS DRAWN HIS CONCLUSIONS ACCORDINGLY. IT MUST BE NOTED THAT UNLESS THIS FACT IS PROVED THROUGH FIELD ENQUIRIES, SUCH A FINDING COULD NOT HAVE BEEN GIVEN. THE SO - CALLE D 20 DUMMY COMPANIES ARE LARGELY PRIVATE LIMITED COMPANIES OF THE APPELLAN T. REGULAR RETURNS OF INCOME IN RESPECT OF THESE COMPANIES ARE BEING FILED A ND THESE ARE BEING ACCEPTED BY THE DEPARTMENT EITHE R ULS 143(1) OR ASSESSED U/S 143(3) OF THE ACT. THE BOOKS OF ACCOUNT OF THESE COMPANIES ARE BE ING MAINTAINED REGULARLY AND ARE REGISTERED CORPORATE ENTITIES AND ARE COMPLYING WITH THE COMPANY LAW, R.O.C. AND OTHER AUTHORITIES. HENCE, THESE COMPANIES CANN OT BE HELD TO BE BOGUS COMPANIES. (X) YET ANOTHER OBSERVATION OF THE AO FOR CONCLUDING THAT THE APPELLANT IS ENGAGED IN PROVIDING ACCOMMODATION ENTRIES IS ON ACCOUNT OF THE ALLEGATION THAT THE APPELLANT COULD NOT HAVE DONE GENUINE BUSINESS WITHOUT NECESS ARY INFRASTRUCTURE IN TERMS OF EITHER STAFF/ PREMISES. THE AO FOUND THE EXPENSES INCURRED BY THE APPELLANT IN THIS REGARD TO BE INADEQUATE. IN THIS REGARD, IT IS TO BE NOTED (AS ALREADY STATED ABOVE) THAT THE APPELLANT IS ONLY A TRADER. IT DOES NOT MANUFAC TURE ANY ITEMS. HENCE, VERY LARGE STAFF STRENGTH ETC WOULD NOT BE REQUIRED. THE APPELLANT CONTENDS THAT IT HAS SUFFICIENT STAFF, OFFICE SPACE TO HANDLE THE TRADING ACTIVITIES. THIS CONTENTION OF THE APPELLANT CANNOT BE IGNORED. (XI) SO FAR AS THE AO'S AL LEGATION REGARDING VAT PAYMENT CLAIM OF THE. APPELLANT IS CONCERNED, IT IS SEEN THAT THE CHALLAN (RECEIPT) OF RS.99,35,200/ - (THE TOTAL AMOUNT PAID IS RS.1 ,03,08,170/ - WHICH INCLUDES THE INTEREST ALSO, FOR THE DELAYED PAYMENT) HAS BEEN ISSUED BY THE CONCE RNED AUTHORITY IN THE NAME OF THE APPELLANT. THE AO HOWEVER OBSERVED THAT THE VAT PAYMENT WAS NOT MADE BY THE APPELLANT AND IT WAS ACTUALLY CREDITED TO THE ACCOUNT OF 14 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) INDIGO EDUTAINMENT PVT. LTD THROUGH A JOURNAL ENTRY. THIS FACT IS IMMATERIAL, AS IT IS PO SSIBLE THAT THE FUNDS FOR THE PAYMENT OF VAT WERE PROVIDED BY THE SAID COMPANY INDIGO EDUTAINMENT PVT. LTD (OF THE APPELLANT GROUP) ON BEHALF OF THE APPELLANT AND A CREDIT ENTRY HAS BEEN ACCORDINGLY MADE IN THE BOOKS OF ACCOUNT OF THE APPELLANT IN THE NAME OF THE SAID COMPANY. THE FACT NEVERTHELESS REMAINS THAT THE VAT OF RS.99,35,200/- HAS BEEN PAID IN THE NAME OF THE APPELLANT. (XII) THUS THIS IS A CASE WHERE BOTH THE SELLERS AND THE PURCHASERS OF THE GOODS HAVE CONFIRMED THE TRANSACTIONS AND VAT HAS AL SO BEEN PAID. EVEN DURING THE ENQUIRIES CARRIED OUT BY THE AO, THE CONCERNED PARTIES HAVE CONFIRMED THE TRANSACTIONS TO THE AO EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING REMAND PROCEEDINGS. 14.13 COMING TO THE DOCUMENTS FILED BY THE APPELLANT BEFORE THE UNDERSIGNED INCLUDING THE ADDITIONAL EVIDENCES, IT IS SEEN THAT THE APPELLANT HAS TRADED IN SOFTWARE DURING THE YEAR AND THE TURNOVER WAS RS.106,64,15,000/ - . THE APPELLANT HAS FILED COMPLETE DETAILS OF SALES PARTY - WISE AND ALL THE INVOICES IN C ONNECTION WITH THE SALES EFFECTED. AS AGAINST THIS SALES MADE, THE PURCHASES OF SOFTWARE ARE RS.120,31,05,000/ - AND COMPLETE DETAILS OF THE SAME INCLUDING THE COPIES OF THE INVOICES HAVE BEEN FURNISHED. THE APPELLANT HAS ALSO FURNISHED COPIES OF CONFIRMATI ONS OF ACCOUNTS FROM VARIOUS PARTIES INCLUDING STADS LIMITED, AHMEDABAD. THE PURCHASES AND SALES HAVE MOSTLY BEEN MADE FROM/TO HFCL, STADS LIMITED, HINDUSTAN ENGINEERING & INDUSTRIES LTD AND BASANT MARKETING PVT. LTD DURING THE YEAR. THE A O HAS NO - WHERE ES TABLISHED THAT PURCHASES AND SALES EFFECTED BY THE APPELLANT WERE BOGUS. IN THE BACKGROUND OF ABOVE FACTS, WHICH ARE DISCUSSED ABOVE, IT IS EVIDENT THAT THE TRANSACTIONS OF THE APPELLANT CANNOT BE DOUBTED SIMPLY ON THE BASIS OF A SCRUTINY REPORT OF A CHART ERED ACCOUNTANT ENGAGED BY THE CBI, WHO ALSO DID NOT CARRY OUT ANY ENQUIRIES TO ESTABLISH THAT THE TRANSACTIONS FOR PURCHASES AND SALES WERE BOGUS. HIS CONCLUSIONS WERE EVIDENTLY BASED ON ASSUMPTIONS AND SURMISES. THE INVESTIGATION WING OF THE INCOME TAX D EPARTMENT HAS ALSO NOT CARRIED OUT ANY ENQUIRIES TO PROVE THAT THE SALES AND PURCHASES OF THE APPELLANT WERE BOGUS/ SHAM. AS ALREADY STATED, THEREFORE, THIS IS A CASE WHERE BOTH THE SELLERS AND THE PURCHASERS OF THE GOODS HAVE CONFIRMED THE TRANSACTIONS AN D VAT HAS ALSO BEEN PAID. EVEN DURING 15 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) THE ENQUIRIES CARRIED OUT BY THE AO, THE CONCERNED PARTIES HAVE CONFIRMED THE TRANSACTIONS TO THE AO EITHER DURING THE ASSESSMENT PROCEEDINGS OR DURING REMAND PROCEEDINGS. 14.14 THE LAW ON THIS ASPECT IS SETTLED BY V ARIOUS SUPREME COURT DECISIONS. IN THE CASE OF SREE MEENAKSHI MILLS LIMITED, 31 ITR 28 (SC) THE SUPREME COURT DISTINGUISHED THE MEANING OF THE WORD 'SHAM' VIS - A - VIS 'BENAMI' IN FOLLOWING TERMS: BENAMI - BENAMI TRANSACTION - VIS - A - VIS SHAM TRANSACTION - WORD 'B ENAMI'; IS USED TO DEVOTE TWO CLASSES OF TRANSACTIONS WHICH DIFFER FROM EACH OTHER IN THEIR LEGAL CHARACTER AND INCIDENTS - IN ONE SENSE IT SIGNIFIES A TRANSACTION WHERE THE SALE IS GENUINE BUT THE NAME OF REAL PURCHASER IS NOT DISCLOSED - THIS IS THE CLASS O F TRANSACTIONS WHICH IS USUALLY TERMED A BENAMI - WORD BENAMI IS ALSO USED, PERHAPS INACCURATELY, TO REFER TO A SHAM TRANSACTION WHERE THE TRANSFER CONTINUES TO RETAIN THE TITLE NOTWITHSTANDING THE EXECUTION OF TRANSFER DEED - ONLY IN THE FORMAL CLASS OF CAS ES, IT WOULD BE NECESSARY TO FIND OUT AS TO WHO PAID THE CONSIDERATION. 21. NOW, THE ASSUMPTION UNDERLYING THIS ARGUMENT IS THAT THE TRIBUNAL HAD FOUND IN ITS ORDER THAT THE INTERMEDIARIES WERE BENAMIDARS FOR THE APPELLANT, BUT THERE IS NO BASIS FOR THIS IN THE ORDER. IN THIS CONNECTION, IT IS NECESSARY TO NOTE THAT THE WORD 'BENAMI' IS USED TO DENOTE TWO CLASSES OF TRANSACTIONS WHICH DIFFER FROM EACH OTHER IN THEIR LEGAL CHARACTER AND INCIDENTS. IN ONE SENSE, IT SIGNIFIES A TRANSACTION WHICH IS REAL, AS FOR EXAMPLE, WHEN A SELLS PROPERTIES TO B BUT THE SALE DEED MENTIONS X AS THE PURCHASER. HERE THE SALE ITSELF IS GENUINE, BUT THE REAL PURCHASER IS B, X BEING HIS BENAMIDAR. THIS IS THE CLASS OF TRANSACTIONS WHICH IS USUALLY TERMED AS BENAMI. BUT THE WORD 'BENAMI' IS ALSO OCCASIONALLY USED, PERHAPS NOT QUITE ACCURATELY, TO REFER TO A SHAM TRANSACTION, AS FOR EXAMPLE, WHEN A PURPORTS TO SELL HIS PROPERTY TO B WITHOUT INTENDING THAT HIS TITLE SHOULD CEASE OR PASS TO B. THE FUNDAMENTAL DIFFERENCE BETWEEN THESE TWO CLASSES OF TRANSACTIONS IS THAT WHEREAS IN THE FORMER THERE IS AN OPERATIVE TRANSFER RESULTING IN THE VESTING OF TITLE IN THE TRANSFEREE, IN THE LATTER THERE IS NONE SUCH, THE TRANSFEROR CONTINUING TO RETAIN THE TITLE NOTWITHSTANDING THE EXECUTION OF THE TRANSFER DEED. IT IS ONLY 16 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) IN THE FORMER CLASS OF CASES THAT IT WOULD BE NECESSARY, WHEN A DISPUTE ARISES AS TO WHETHER THE PERSON NAMED IN THE DEED IS THE REAL TRANSFEREE OR B, TO ENQUIRE INTO THE QUESTION AS TO WHO PAID THE CONSIDERATION FOR THE TRANS FER, X OR B. BUT IN THE LATTER CLASS OF CASES, WHEN THE QUESTION IS WHETHER THE TRANSFER IS GENUINE OR SHAM, THE POINT FOR DECISION WOULD BE, NOT WHO PAID THE CONSIDERATION BUT WHETHER ANY CONSIDERATION WAS PAID. THEREFORE, THERE WILL BE FORCE IN THE CONTE NTION OF THE APPELLANT THAT A FINDING AS TO WHO FURNISHED THE CAPITAL FOR THE INTERMEDIARIES WAS REQUISITE BEFORE THEY COULD BE HELD TO BE BENAMIDARS, IF THE TRIBUNAL HAD HELD THEM TO BE BENAMIDARS IN THE FORMER SENSE BUT NOT IN THE LATTER. WE MUST, THEREF ORE, EXAMINE WHAT IT IS THAT THE TRIBUNAL HAS ACTUALLY FOUND. NOW, THE TRIBUNAL HAS NOT HELD THAT ANY OF THE TRANSACTIONS WITH WHICH THE ASSESSMENT PROCEEDINGS ARE CONCERNED ARE BENAMI. INDEED, THE WORD 'BENAMI' DOES NOT FIND A PLACE ANYWHERE IN ITS ORDER. IT IS ONLY IN THE QUESTION WHICH THE APPELLANT FRAMED FOR REFERENCE TO THE COURT IN ITS APPLICATION UNDER SECTION 66(1) THAT IT HAS CHOSEN FOR THE FIRST TIME TO INTRODUCE THE WORD 'BENAMIDAR'. THAT APART, LOOKING AT THE SUBSTANCE OF THE FINDING, THE POINT THAT AROSE FOR DETERMINATION BEFORE THE TAXING AUTHORITIES WAS WHAT PROFIT THE APPELLANT HAD MADE ON CERTAIN SALES STANDING IN ITS BOOKS IN THE NAMES OF THE INTERMEDIARIES. IF THE SALES WERE TRUE, THE AMOUNT SHOWN IN THE BOOKS AS PRICE RECEIVED THEREFOR W OULD BE THE BASIS FOR WORKING OUT THE PROFITS, AND THAT WAS THE STAND OF THE APPELLANT; BUT THE AUTHORITIES HELD THAT THOSE SALES WHERE SHAM AND THE ENTRIES RELATING TO THE PAYMENT OF PRICE THEREFOR FICTITIOUS. THEN, THEY FOUND THAT THE CONCERNED GOODS WER E SOLD BY THE APPELLANT DIRECTLY TO ITS OWN CONSTITUENTS, THAT THE PRICE PAID BY THEM WAS ACTUALLY RECEIVED BY IT, AND THAT THAT SHOULD BE THE BASIS FOR CALCULATING ITS PROFITS. THUS, THE POINT WHICH WAS ACTUALLY IN ISSUE IN THE PROCEEDINGS WAS A QUESTION OF BENAMI IN THE SECOND SENSE AND NOT IN THE FIRST, AND TO DECIDE THAT, THE TRIBUNAL HAD ONLY TO FIND WHETHER ANY PRICE WAS PAID BY THE INTERMEDIARIES FOR THE SALES AND NOT WHO PAID THE PRICE FOR THEM IT IS SCARCELY NECESSARY TO ADD THAT NO QUESTION ARISES AS TO WHETHER THE INTERMEDIARIES ARE BENAMIDARS FOR THE ULTIMATE PURCHASERS, BECAUSE THE CLAIM OF THE FORMER IS THAT THEY HAD SOLD THE GOODS TO 'THE LATTER UNDER FRESH CONTRACTS AT DIFFERENT PRICES. NOR COULD THERE BE A QUESTION OF BENAMI IN THE FIRST SEN SE, AS THAT COULD ARISE ONLY BETWEEN A PARTY TO A DEED AND ANOTHER WHO IS EO NOMINE NOT A PARTY TO IT 17 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) BUT CLAIMS TO BE BENEFICIALLY ENTITLED TO THE PROPERTIES CONVEYED BY THE DEED. THEREFORE, ON THE FINDINGS OF THE TRIBUNAL, THE QUESTION WHETHER THE INTERM EDIARIES WERE BENAMIDARS FOR THE APPELLANT COULD NOT ARISE, AND THE FURTHER QUESTION AS TO WHO FOUND THE CAPITAL FOR THE INTERMEDIARIES IS ALTOGETHER IRRELEVANT. LIKEWISE, ON THE FINDING THAT THE YARN WAS REALLY SOLD BY THE APPELLANT NOT TO THE INTERMEDIAR IES BUT TO ITS OWN CONSTITUENTS AND THAT THEY PAID THE PRICE THEREFORE TO THE APPELLANT, THE QUESTION WHO HAD THE BENEFIT OF THE TRANSACTION COULD NOT ARISE EITHER. 14.15 IN THE CASE OF THE APPELLANT, IT HAS NOT BEEN ESTABLISHED THAT THE TRANSACTIONS WERE SHAM AND NO TRANSFER(IN TERMS OF SALE AND PURCHASE OF GOODS) HAD AT ALL TAKEN PLACE. IN THE CAE OF CWT V/S ARVIND NAROTTAM, 173 ITR 479 (SC), THE RATIO OF THE DECISION AND THE PRINCIPLES LAID DOWN BY HONBLE SUPREME COURT CAN BE UNDERSTOOD FROM THE FOL LOWING OBSERVATIONS: 5.. THE CONTENTION OF DR. V. GAURI SHANKER ON BEHALF OF THE REVENUE IS THAT THE SETTLOR HAD SPECIFICALLY MADE THESE THREE TRUSTS FOR THE BENEFIT OF HIS SON, ARVIND, THE ASSESSEE, AND HAS DECLARED UNEQUIVOCALLY THAT THE SETTLEMENT IS F OR THE BENEFIT OF THE ASSESSEE, AND ON THE ASSESSEE'S MARRIAGE, ALSO FOR THE BENEFIT OF HIS WIFE AND CHILDREN. IT IS URGED THAT THE HIGH COURT HAS ERRED IN FAILING TO COLLECT THE REAL INTENTION OF THE SETTLOR FROM THE ENTIRE DOCUMENT AND HAS ERRONEOUSLY CO NFINED ITSELF TO PARAGRAPH 7 OF THE DEED. ACCORDING TO THE LEARNED COUNSEL, WHAT THE HIGH COURT SHOULD HAVE DONE WAS TO ASCERTAIN THE STATE OF AFFAIRS EXISTING ON THE RELEVANT VALUATION DATE. IT SHOULD NOT HAVE BEEN INFLUENCED BY WHAT COULD POSSIBLY HAPPEN IN THE INDEFINITE FUTURE ON THE HAPPENING OF CERTAIN CONTINGENCIES. THE SUBMISSION IS THAT ON THE VALUATION DATES THERE WAS ONLY ONE BENEFICIARY, THE ASSESSEE, HIS SHARE WAS DETERMINED AND KNOWN, AND IT EXTENDED TO THE ENTIRE INTEREST IN THE TRUST PROPERT IES. IT IS URGED THAT IN THE CASE OF A DISCRETIONARY TRUST THE INTEREST OF THE BENEFICIARY EXTENDS NOT ONLY TO THE ACTUAL SHARE PAID TO HIM BUT TO HIS RIGHT TO BE CONSIDERED AS A POTENTIAL RECIPIENT OF THE NET INCOME REMAINING AFTER DEFRAYING THE MANAGEMEN T EXPENSES AND PAYING THE TAXES. IT EXTENDS, HE SAYS, TO AN INTEREST IN THE TRUST ACCUMULATION BOTH BEFORE OR AFTER THE EXPIRY OF THE STIPULATED PERIOD WHEN THE 18 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) TRUSTEES ARE EMPOWERED TO DISTRIBUTE THE ACCUMULATED BALANCE AS CAPITAL. THE LEARNED COUNSEL UR GES THAT THE WHOLE DEED OF SETTLEMENT IN EACH CASE SHOULD BE READ AND UNDERSTOOD COMPREHENSIVELY AND ONLY THEREUPON CAN A TRUE ANSWER BE RETURNED TO THE QUESTION FRAMED IN THE REFERENCE. CONSIDERABLE EMPHASIS HAS BEEN PLACED ON THE SUBMISSION THAT THE CAPI TAL VALUE OF THE CONTINGENT INTEREST IN THE ENTIRE PROPERTY MUST BE KEPT IN VIEW. I HAVE NO DIFFICULTY IN ACCEPTING THE SUBMISSION OF DR. GAURI SHANKER THAT FOR A PROPER UNDERSTANDING OF A CASE BEFORE US WE MUST CONSIDER THE ENTIRE DEED OF SETTLEMENT. THAT , HOWEVER, DOES NOT LEAD TO THE CONCLUSION WHICH THE LEARNED COUNSEL WISHES US TO ACCEPT. WHAT IS THE INTEREST OF THE ASSESSEE UNDER THE DEED OF SETTLEMENT ON THE RELEVANT VALUATION DATE ? WE ARE CONCERNED WITH THE CAPITAL VALUE OF THAT INTEREST. IT IS APP ARENT THAT THE ASSESSEE WAS ENTITLED ONLY TO THE MINIMUM PRESCRIBED IN EACH OF THE DEEDS OF SETTLEMENT. WHETHER OR NOT HE RECEIVED ANY FURTHER AMOUNT OUT OF THE NET INCOME OF THE TRUST FUND WAS LEFT ENTIRELY IN THE DISCRE TION OF THE TRUSTEES. THERE WAS NO RIGHT IN THE ASSESSEE TO ANY PORTION OF THE NET INCOME IN EXCESS OF THE MINIMUM GUARANTEED TO HIM. IT IS THE MINIMUM ALONE WHICH HE COULD CLAIM AS HIS PROPERTY. SO ALSO, ON THE DISTRIBUTION OF THE ACCUMULATED BALANCE AS CAPITAL AT THE END OF THE STIPULATE D PERIOD THERE WAS NO RIGHT IN HIM TO RECEIVE ANY PART THEREOF. IT WAS OPEN TO THE TRUSTEES TO IGNORE HIM ALTOGETHER AND THEY COULD PAY IT TO SUCH OTHER MEMBERS OF THE FAMILY AS THEY CHOSE. 6. IN SUPPORT OF THE PROPOSITION THAT THE EXPRESSION 'PROPERTY' IS A TERM OF THE WIDEST AMPLITUDE AND THAT EVERY POSSIBLE INTEREST IS INCLUDIBLE THEREIN WE ARE REFERRED TO AHMED G.H. ARIFF V. CWT [1970] 76 ITR 471 ( SC ) :TC 64R.457. . I HAVE NO DOUBT THAT THE EXPRESSION 'PROPERTY' MUST BEAR A COMPREHENSIVE IMPORT THE QUESTION REMAINS WHETHER WHAT IS CONVEYED UNDER THE THREE DEEDS OF SETTLEMENT TO THE ASSESSEE IS A RIGHT TO ANYTHING MORE THAN THE PRESCRIBED MINIMUM UNDER EACH DEED. I MAY REITERATE THAT THE INTEREST EXTENDS TO NO MORE THAN THAT MINIMUM. 7. IT IS CONTENDED ON BEHALF OF THE REVENUE THAT THE FACT THAT A BENEFICIARY MAY CHANGE ON THE HAPPENING OF CERTAIN CONTINGENCIES WILL NOT MAKE THE SHARE OF THE BENEFICIARY 19 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) UNDETERMINED OR UNKNOWN, AND RELIANCE HAS BEEN PLACED ON PADMAVATI JAYKRISHNA TRUST V. CWT [1966] 61 ITR 66 (GUJ.) , CWT V. TRUSTEES OF MRS. HANSABAI TRIBHUWANDAS TRUST [1968] 69 ITR 527 (BOM.) , CWT V. TRUSTEES OF H.E.H. NIZAM'S FAMILY (REMAINDER WEALTH) TRUST [197 7] 108 ITR 555 ( SC ) AND CWT V. TRUSTEES OF H.E.H. THE NIZAM'S SAHEBZADI ANWAR BEGUM TRUST [1981] 129 ITR 796 (AP) . THESE CASES CAN BE OF NO ASSISTANCE TO US, FOR, UNLI KE THE FACTS IN EACH OF THOSE CASES, THE INSTANT CASE IS ONE WHERE BEYOND THE SPECIFIED MINIMUM THE ASSESSEE WAS NOT ENTITLED TO ANYTHING MORE. THERE MUST BE A RIGHT, PRESENT OR CONTINGENT, BEFORE IT CAN BE SAID THAT AN ASSESSEE HAS AN INTEREST, AND I AM S UPPORTED IN THIS BY WHAT WAS SAID BY THE HOUSE OF LORDS IN GARTSIDE V. IRC LR [1968] AC 553 WHERE IT WAS ALSO OBSERVED THAT A MERE RIGHT TO BE CONSIDERED FOR DISTRIBUTION OF THE INCOME OR OF THE CORPUS OF THE TRUST FUND CANNOT BE REGARDED AS AN 'INTEREST' SINCE IT WAS NOT CAPABLE OF VALUATION. DR. GAURI SHANKER RELIES ON LEEDALE (INSPECTOR OF TAXES) V. LEWIS [1982] (3) ALL. ER 808. BUT THE DECISION IN THAT CASE TURNED ON THE PARTICULAR LANGUAGE OF THE ENGLISH STATUTE, WHERE AN APPROXIMATION OF THE VALUE IS PERMITTED BY THE 'JUST AND REASONABLE' CLAUSE AND BY THE WORDS 'AS NEAR AS MAY BE' IN SECTION 42(2) OF THE FINANCE ACT. 8. IT IS VEHEMENTLY URGED BY DR. GAURI SHANKER THAT THE APPROACH TO BE ADOPTED IN THIS CASE IS NOT THAT WHICH FINDS FAVOUR UNDER THE IN COME - TAX LAW, AND DIFFERENT CONSIDERATIONS PREVAIL UNDER THE ACT. AS I AM PROCEEDING ON THE BASIS OF THE TRUE CONSTRUCTION OF THE DEEDS OF SETTLEMENT, I FAIL TO SEE ANY SUBSTANCE IN THAT CONTENTION. RELIANCE WAS ALSO PLACED BY THE LEARNED COUNSEL FOR THE R EVENUE ON MCDOWELL & CO. LTD. V. CTO [1985] 154 ITR 148 ( SC ) . THAT DECISION CANNOT ADVANCE THE CASE OF THE REVENUE BECAUSE THE LANGUAGE OF THE DEEDS OF SETTLEMENT IS PL AIN AND ADMITS OF NO AMBIGUITY. 9. IN THE RESULT, I ENDORSE THE VIEW TAKEN BY THE HIGH COURT AND DISMISS THESE APPEALS WITH COSTS. I AGREE WITH THE JUDGMENT OF THE LEARNED CHIEF JUSTICE. THERE IS, HOWEVER, ONE ASPECT OF THE MATTER ON WHICH SOME ARGUMENTS WERE ADVANCED AT THE TIME OF HEARING OF THIS CASE, TO WHICH I WOULD LIKE TO ADVERT. 20 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) 2. DR. V. GAURI SHANKER APPEARING ON BEHALF OF THE REVENUE MADE AN APPEAL BEFORE US STATING THAT WE SHOULD REALLY CONSTRUE THE THREE TRUST DEEDS TOGETHER AND SEE 'THE GAM E OF THE HIDDEN PURPOSE' BEHIND THESE TRUST DEEDS WHICH WERE, IN FACT, FOR THE SOLE AND EXCLUSIVE BENEFIT OF THE ASSESSEE. HE DREW OUR ATTENTION TO THE OBSERVATIONS OF JUSTICE CHINNAPPA REDDY, WITH WHICH OTHER LEARNED JUDGES OF THE FULL BENCH AGREED IN MCD OWELL & CO. LTD.'S CASE (SUPRA). HE INVITED US THAT HAVING REGARD TO THE TAXING STATUTE THE TAX AVOIDANCE DEVICE SHOULD BE EXPOSED. JUSTICE CHINNAPPA REDDY HAS NOTICED THE CHANGE IN JUDICIAL ATTITUDE TO THE TAX AVOIDANCE DEVICES. JUSTICE REDDY MENTIONED TH AT IN THE COUNTRY OF ITS BIRTH THE PRINCIPLES OF WESTMINSTER OF CONDONING TAX AVOIDANCE HAVE BEEN GIVEN A DECENT BURIAL. IN THAT VERY COUNTRY, THE PHRASE 'TAX AVOIDANCE' IS NO LONGER CONDONED OR LOOKED UPON WITH SYMPATHY. 3. IT IS TRUE THAT TAX AVOIDANCE IN AN UNDER - DEVELOPED DEVELOPING ECONOMY SHOULD NOT BE ENCOURAGED ON PRACTICAL AS WELL AS IDEOLOGICAL GROUNDS. ONE WOULD WISH, AS NOTED BY REDDY, J. THAT ONE COULD GET THE ENTHUSIASM OF JUSTICE HOLMES THAT TAXES ARE THE PRICE OF CIVILIZATION AND ONE WOULD LIKE TO PAY THAT PRICE TO BUY CIVILIZATION. BUT THE QUESTION WHICH MANY ORDINARY TAXPAYERS VERY OFTEN IN A COUNTRY OF SHORTAGES WITH OSTENTIOUS CONSUMPTION AND DEPRIVATION FOR THE LARGE MASSES ASK, IS DOES HE WITH TAXES BUY CIVILIZATION OR DOES HE FACILITA TE THE WASTES AND OSTENTIOUSNESS OF THE FEW. UNLESS WASTES AND OSTENTIOUSNESS IN THE GOVERNMENT'S SPENDINGS ARE AVOIDED OR ESCHEWED, NO AMOUNT OF MORAL SERMONS WOULD CHANGE PEOPLE'S ATTITUDE TO TAX AVOIDANCE. 4. IN ANY EVENT, HOWEVER, WHERE THE TRUE EFFEC T ON THE CONSTRUCTION OF THE DEEDS IS CLEAR, AS IN THIS CASE, THE APPEAL TO DISCOURAGE TAX AVOIDANCE IS NOT A RELEVANT CONSIDERATION. BUT SINCE IT WAS MADE IT HAS TO BE NOTED AND REJECTED. WITH THESE OBSERVATIONS I AGREE. 14.16 THE ABOVE IS A VERY IMPORTA NT JUDGEMENT, WHICH LEADS US TO CONCLUDE THAT IF A BUSINESS TRANSACTION IS SIMPLE AND UNAMBIGUOUS, THE SAME HAS TO BE ACCEPTED AS SUCH, UNLESS ESTABLISHED TO BE FALSE. IN THE 21 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) CASE OF THE APPELLANT, THE FALSITY OF THE TRANSACTIONS HAS NOT AT ALL BEEN ESTABL ISHED AND ALL THE DOCUMENTS FURNISHED BY THE APPELLANT INDICATE THAT SUCH TRANSACTIONS OF SALE AND PURCHASE OF SOFTWARE HAD ACTUALLY TAKEN PLACE. EVEN IN THE CASE OF MCDOWELL, 154 ITR 148, HON'BLE JUSTICE RANGANATH MISHRA (OF SUPREME COURT) HAS OBSERVED TH AT: TAX PLANNING MAY BE LEGITIMATE PROVIDED IT IS WITHIN THE FRAMEWORK OF LAW. COLOURABLE DEVICES CANNOT BE PART OF TAX PLANNING AND IT IS WRONG TO ENCOURAGE OR ENTERTAIN THE BELIEF THAT IT IS HONOURABLE TO AVOID THE PAYMENT OF TAX BY RESORTING TO DUBIO US METHODS. IT IS THE OBLIGATION OF EVERY CITIZEN TO PAY THE TAXES HONESTLY WITHOUT RESORTING TO SUBTERFUGES. 14.17 IN THE CASE OF THE APPELLANT, IT HAS NOT BEEN ESTABLISHED THAT THE APPELLANT HAS CARRIED OUT ANY TRANSACTIONS OUTSIDE THE FRAMEWORK OF LA W AND FOR THIS PURPOSE, IT HAS UTILISED COLOURABLE DEVICES. THE AO HAS NOT ESTABLISHED THAT THE SALE AND PURCHASE TRANSACTIONS CARRIED OUT BY THE APPELLANT HAVE IN REALITY NOT TAKEN PLACE AND THE SAME ARE AN EXERCISE IN NULLITY. IN THE CASE OF BANYAN AND B ERRY, 222 ITR 831 (GUJ) , HON'BLE GUJARAT HIGH COURT HAS ALSO INTERPRETED THE DECISION OF SUPREME COURT IN THE CASE OF MCDOWELL (SUPRA) AND HAS OBSERVED AS UNDER: 20. FROM THE AFORESAID, IT IS APPARENT THAT ON THE FACTUAL ASPECT THE COURT WAS CONSIDERIN G THE CASE WHERE IN A GOING BUSINESS A LIABILITY TO PAY DUTY WHICH WAS LEGALLY OF THE ASSESSEE AND WHICH ON SUCH PAYMENT WAS TO BECOME PART OF ITS COST OF COMMODITY SOLD BY IT AND TO BECOME PART OF ITS SELLING PRICE TO THE BUYERS, WAS AS A RESULT OF ARRANG EMENT BETWEEN THE SELLER AND BUYER SPLIT INTO TWO, NAMELY - DUTY SO FAR PAID SEPARATELY DIRECTLY TO THE TAX AUTHORITIES AND THE BALANCE SO PAID TO THE SELLER; THE ARRANGEMENT WAS EXISTING SOLELY FOR THE PURPOSE OF NOT PAYING THE TAX AND IT IS NOT A TRANSAC TION IN REALITY OF RECEIVING LESS PRICE THAN THE ONE ON WHICH IT WAS MARKETING. THE COURT NOWHERE SAID, THAT EVERY ACTION OR INACTION ON THE PART OF THE TAXPAYER WHICH RESULTS IN REDUCTION OF TAX LIABILITY TO WHICH HE MAY BE SUBJECTED IN FUTURE, IS TO BE V IEWED WITH SUSPICION AND BE TREATED AS A DEVICE FOR AVOIDANCE OF TAX IRRESPECTIVE OF LEGITIMACY OR GENUINENESS OF THE ACT; AN INFERENCE WHICH UNFORTUNATELY, IN OUR OPINION, THE TRIBUNAL APPARENTLY APPEARS TO HAVE DRAWN FROM THE ENUNCIATION MADE IN MCDOWELL & CO. LTD.S CASE (SUPRA). RATIO OF ANY DECISION HAS TO BE UNDERSTOOD IN THE CONTEXT IT HAS BEEN MADE. THE FACTS 22 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) AND CIRCUMSTANCES WHICH LEAD TO MCDOWELL'S DECISION LEAVES US IN NO DOUBT THAT THE PRINCIPLE ENUNCIATED IN THE ABOVE CASE HAS NOT AFFECTED THE FREEDOM OF CITIZEN TO ACT IN A MANNER ACCORDING TO HIS REQUIREMENTS, HIS WISHES IN THE MANNER OF DOING ANY TRADE, ACTIVITY OR PLANNING HIS AFFAIRS WITH CIRCUMSPECTION, WITHIN THE FRAMEWORK OF LAW, UNLESS THE SAME FALL IN THE CATEGORY OF COLOURABLE DEVICE W HICH MAY PROPERLY BE CALLED A DEVICE OR A DUBIOUS METHOD OR A SUBTERFUGE CLOTHED WITH APPARENT DIGNITY. 14.18 IN THE FACE OF ABOVE DISCUSSION THEREFORE, IT IS EVIDENT THAT UNLESS IT IS ESTABLISHED THAT THE TRANSACTIONS CARRIED OUT BY THE APPELLANT WERE FA LSE, BOGUS OR SHAM AND WERE SUPPORTED BY COLOURABLE DEVICE, THERE CANNOT BE ANY ASSUMPTION AGAINST THE APPELLANT TO THAT EFFECT. THERE ARE INNUMERABLE OTHER DECISIONS, WHICH ALSO SUPPORT THIS VIEW [MUTHURAM AGARWAL VS. STATE OF UP, 87 AIR 109 (SC); AZADI B ACHAO ANDOLAN, 263 ITR 703 (SC); CIT VS. RAMAN, 67 ITR 11 (SC); M. V. VALLIAPPAN, 170 ITR 238 (MAD), TO NAME A FEW]. HENCE, IT CANNOT BE HELD THAT THE APPELLANT HAS PROVIDED ACCOMMODATION ENTRIES TO THIRD PARTIES AND THE SALES AND PURCHASES REFLECTED IN IT S ACCOUNTS ARE BOGUS. 14.19 THE APPELLANT HAS A DISCLOSED B ANK ACCOUNT, THROUGH WHICH ALL THE TRANSACTIONS HAVE BEEN CARRIED OUT. THE BANK A CCOUNT IS A PART OF THE AUDITED BOOKS OF THE APPELLANT AND THE DEBIT AND CREDIT ENTRIES ARE FULLY SUPPORTED BY B ILLS AND VOUCHERS. THEREFORE, ADDITION OF PEAK CREDIT OF R S.10,00,523/ - IN THE DISCLOSED BANK ACCOUNT OF THE APPELLANT COULD NOT HAVE BEEN MADE AND THE SAME IS TOTALLY UNJUSTIFIED. SIMILARLY, WHEN THE PURCHAS ES AND SALES OF THE APPELLANT HAVE NOT BEEN P ROVED TO BE BOGUS, THE ADDITION OF OF RS.53,32,075/ - @0.5% OF THE TURNOVER, TERMED BY THE A O AS BILLING PROFIT ALSO COULD NOT MADE. THE A O HAS NOT POINTED OUT ANY SPECIFIC DEFECTS IN THE APPELLANT'S AUDITED ACCOUNTS AND NO FLAWS IN THE ACCOUNTS HAVE BEEN NOTED BY THE A O . THESE ADDITIONS ARE THEREFORE ORDERED TO BE DELETED. 14.20 ABOVE GROUNDS OF APPEAL ARE ALLOWED. 15. IN THE RESULT, THE APPEAL OF THE APPELLANT IS TREATED TO BE PARTLY ALLOWED FOR STATISTICAL PURPOSES. 23 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) 9 . THE LD.DR VEHEMENTLY SUBMITT ED BEFORE US THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF HAWALA OPERATORS PROVIDING ACCOMMODATION ENTRIES HAVING THE NET WORKING OF 20 SISTER CONCERNS WITHOUT DOING ANY ACTUAL BUSINESS OF SALE AND PURCHASE OF SOFTWARE . THE LD. DR POINTED OUT THA T THE ASSESSEE SHOWED TO HAVE MADE THE SALE AND PURCHASES OF COMPUTER SOFTWARE WHEREAS AS A MATTER OF FACT SHOWING NO SUCH BUSINESS OF PURCHASE, SALE AND DEVELOPMENT OF SOFTWARE WAS CARRIED ON AND THE ASSESSEE WAS NOT HAVING BACK UP INFRASTRUCTURE OR TECHNICA L MANPOWER TO DEVELOP THE SOFTWARE AS AS SHOWN BY THE ASSESSEE. THE LD. DR ALSO STATED THAT THE AO HAS ACTED ON THE REPORT OF CID/ACB THAT THE ASSESSEE WAS OPERATING HAWALA RACKETS AND THUS CORRECTLY MADE THE ADDITION TOWARDS THE INCOME EARNED BY TH E ASSESSEE BY TAXING THE SAME ON THE PEAK CREDIT BASIS OF RS.10,00,523/ - UNDER SECTION 68 OF THE ACT. SIMILARLY, THE AO WAS JUSTIFIED IN MAKING ADDITION AT 0.50% OF THE TOTAL SALES TO BRING THE COMMISSION ON HAWALA TRASACTIONS TO TAX AND ACCORDINGLY APP LIED 0.5% OF THE TOTAL SALES AND MADE ADDITION OF RS.53,32,075/ - WHICH WAS MOST REASONABLE AND JUSTIFIED IN THE CIRCUMSTANCES WHERE THE ASSESSEE HAS NOT PRO DUCED ANY DOCUMENTARY EVIDENCES. THE LD. DR FINALLY SUBMITTED THAT THE FAA HAS COMPLETELY IGNORED ALL THE RELEVANT FACTS ON RECORD AND DELETED THE ADDITION BY OBSERVING THAT THE ASSESSEE HAS ALREADY DISCLOSED COMPLETE INCOME IN THE RETURN OF INCOME AND IN THE BOOKS OF ACCOUNTS ALSO AND SALES AND PURCHASES WERE PROPERLY ACCOUNTED FOR AND FILED 24 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) THE RE TURN OF INCOME ACCORDINGLY. FINALLY THE LD.DR PRAYED BEFORE THE BENCH TO RESTORE THE ORDER OF AO BY SETTING ASIDE THE ORDER OF THE LD.CIT(A). 10 . ON THE OTHER HAND, THE LD.AR STRONGLY OBJECTED TO THE ARGUMENTS OF THE LD.DR AND SUBMITTED THAT THE ASSE SSEE FURNISHED ALL THE DETAILS QUA THE S A LES AND PURCHASES MADE WITH THE VARIOUS PARTIES AND ALSO FURNISHED CONFIRMATION S FROM THE MOST OF THE DEBTORS AND CREDITORS AND ALSO FILED COPY OF LEDGER ACCOUNTS WHEREAS THE AO HAS FAILED TO CARRY OUT FURTHER IN QUIRY EVEN IGNORING THE CONFIRMATION S WITHOUT ASSIGNING ANY REASON. THE LD. AR OF THE ASSESSEE ALSO ARGUED THAT THE FACTS OF NON - SERVICE OF NOTICE U/S 133(6) TO M/S STADS LTD AND PASHUPATI FABRIC LTD HAVE NOT BEEN INFORMED TO THE ASSESSEE AND USED AGAINS T THE ASSESSEE THEREBY CAUSING HUGE MISCARRIAGE OF JUSTICE . WHILE JUSTIFYING THE NON SERVICE , T HE LD. AR ALSO SUBMITTED THAT OUT OF THESE THREE COMPANIES ON WHOM THE NOTICE S U/S 133(6) W ERE NOT SERVED , ONE M/S STADS LTD WAS STRUCK - OFF FROM THE REGISTE R OF COMPANIES BY THE REGISTRAR OF COMPANIES WHEREAS THE SECOND COMPANY M/S PASHUPATI FABRIC LTD WAS UNDER LIQUIDATION BEFORE COMMENCEMENT OF RE - ASSESSMENT PROCEEDINGS AND MOST IMPORTANTLY , THERE WAS NO TRANSACTIONS WITH THESE TWO COMPANIES AT ALL DURI NG THE YEAR . UNDER THESE FACTS AND CIRCUMSTANCES, THE LD.AR SUBMITTED THAT THE ADVERSE INFERENCE S BASED ON NON SERVICE OF NOTICE U/S 133(6) OF THE ACT CANNOT BE DRAWN. THE LD. AR ALSO ARGUED THAT THE ADDITION WAS NOT BASED 25 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) UPON THE INQUIRIES BY AO BUT M ERELY ON THE BASIS OF C BI /ACB REPORT, WHEREAS THE AO BEING QUASI - JUDICIAL AUTHORITIES SHOULD NOT BASE HIS CONCLUSION AND DECISION ON THE FINDING S OF THE ANY OTHER AUTHORITIES UNDER THE ACT AND LAW WITHOUT CARRYING OUT I T S OWN INDEPENDENT INVESTIGATION . THE LD. AR ALSO POINTED OUT THAT THERE WAS NO INQUIRY BY THE INVESTIGATION WING OF THE REVENUE DEPARTMENT AND IT HAS SIMPLY FORWARDED THE LETTER RECEIVED FROM THE CBI/ACB TO THE AO. THE LD COUNSEL OF THE ASSESSEE SUBMITTED THAT THE LD.CIT(A) ALSO N OTED IN PARA 14.12(V) AT PAGE 46 OF HIS ORDER THAT THE AO DID NOT MADE INDEPENDENT INQUIRY. THE ASSESSEE HAS DULY FILED RETURN OF VAT TO THE SALES TAX DEPARTMENT AND THE SAME HAS BEEN ACCEPTED BY THE DEPARTMENT WHICH IS BINDING ON THE OTHER STATUTORY A UTHORITIES INCLUDING THE INCOME TAX DEPARTMENT. SINCE THE PURCHASE , SALES AND CLOSING STOCK W ERE ACCEPTED BY THE SALES TAX DEPARTMENT, IT WOULD NOT BE OPEN TO THE AO TO MAKE ADDITION ON THE BASIS OF STATEMENT OF THIRD PARTY AND THEREFORE THE ADDITION SO MADE SHOULD B E DELE TE D. AS REGARD THE PAYMENT OF VAT BY M/S INDIGO ENTERTAINMENT PVT LTD , T HE LD. AR SUBMITTED THAT THE PAYMENT WAS MADE ON BEHALF OF THE ASSESSEE BY M/S INDIGO ENTERTAINMENT PVT LTD AND THEREFORE THE PAYMENT WAS IN FACT MADE BY THE ASSESS EE FOR ALL PRACTICAL PURPOSES AS T HE ACCOUNT S WITH M /S INDIGO ENTERTAINMENT PVT LTD WERE DULY SETTLED AFTER MAKING THE NECESSARY ADJUSTMENTS AND THEREFORE THE PAYMENT OF THIRD PARTY OF VAT CANNOT BE THE GROUND FOR TREATING THE TRANSACTIONS AS NON - 26 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) GENUINE. FURTHER, THE BOOKS OF ACCOUNTS OF THE ASSESSEE WAS AUDITED BY THE CHARTERED ACCOUNTANT WHO GAVE UNQUALIFIED REPORT AND THE AO WITHOUT REJECTING THE BOOKS OF ACCOUNT COULD NOT HAVE ESTIMATED THE INCOME . IN SUPPORT OF THIS CONTENTIONS THE LD.AR RELIED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF APOLLO TYRES LTD. V. CIT (2002) 255 ITR 273 (SC). THE AR ALSO SUBMITTED THAT THE OBSERVATION AND CONCLUSION BY THE AO WERE TOTALLY WRONG AND UNFOUNDED THAT WHOLE RACKET WAS CARRIED ON THROUGH SISTER CONC ERNS TO EVADE THE INCOME TAX AS THE ASSESSEE AND ALL THE ASSOCIATE CONCERNS WERE SUBJECT TO SAME RATE OF INCOME TAX. THE LD. AR ALSO SUBMITTED BEFORE THE BENCH THAT AOS CONCLUSION THAT THE ASSOCIATE CONCERNS OF THE ASSESSEE W ERE DUMMY CONCERN S WAS ERRO NEOUS AS IT WAS BASED UPON THE REPORT OF THE CBI AND NOT RESULTED FROM HIS OWN INVESTI G ATION. IT WAS ALSO STATED THAT THE FAA REQUIRED THE AO TO GIVE REMAND REPORT AFTER EXAMINATION OF THE ADDITIONAL EVIDENCE AS FILED BY THE ASSESSEE IN THE APPELLATE PROCEEDINGS AND THE CIT(A) HAS ALSO RECORDED THE FINDING THAT THE AO HAS NOT EXAMINED THE SE ADDITIONAL EVIDENCES WHILE PREPARING THE REMAND REPORT. THE LD.AR STATED THAT A SUM OF RS.6,28,300/ - WAS FOUND BY THE CBI AT THE TIME OF SEARCH ON THE ASSESSEE AND GROUP CONCERN S WHICH INDICATE D T HAT THE ASSESSEE WAS NOT ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES AND SO MUCH SO THAT NO INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH BY CBI. LASTLY THE LD. AR SUBMITTED 27 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) THAT THE ADDITION OF RS . 10,00,523/ - ON THE BASIS OF PEAK CREDIT WAS CALCULATED ON THE BASIS OF ENTRIES MADE IN THE BANK STATEMENT S WHICH W ERE ALREADY ACCOUNTED FOR AND DISCLOSED IN THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND THEREFORE ADDITIONS WERE RIGHT LY DELETED BY THE FAA. SIMILARLY, THE ASSESSEE HAS FILED ALL THE NECESSARY DETAILS QUA THE SALE S AND PURCHASES BEFORE THE AO AND IT WAS NOT PROVED BY THE AO BY BRINGING ANY COGENT MATERIAL ON RECORD EXCEPT THE REPORT OF THE CBI WHICH WAS PREPARED ON THE BASIS OF THE REPORT OF THE CHARTERED ACCOUNTANT AND THEREFORE TO MAKE ADDITION AT THE RATE OF 0.5% OF THE TOTAL TURNOVER OF RS.53,32,075/ - WITHOUT PROVING PURCHASE AND SALES TO BE BOGUS WAS WRONG AS THE ASSESSEE HAS ALREADY DECLARED SALES AND PURCHASES AND SHOWN THE EARNING FROM THE SAID TRANSACTIONS IN THE BOOKS OF ACCOUNTS AND THUS, THE LD.AR HEAVILY SUPPORTED HE ORDER OF FAA AND PRAYED BEFORE THE BENCH THAT THE SAME SHOULD BE UPHELD. 11 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT M ATERIAL PLACED BEFORE US INCLUDING THE ORDERS OF AUTHORITIES BELOW AND CASE LAW AS RELIED UPON BY THE ASSESSEE. WE FIND IN THE PRESENT CASE, THE CBI RAIDED THE BUSINESS PREMISES OF THE ASSESSEE AND ITS ASSOCIATE CONCERNS . DURING THE COURSE OF SEARCH/RAI D THE CBI FOUND THAT THERE ARE SOME ENTITIES INCLUDING THE ASSESSEE AND ITS GROUP CONCERN WERE DOING HUGE TRANSACTIONS OF FUNDS TRANSFER AND THEREFORE APPOINTED THE CHARTERED ACCOUNTANT TO CARRY OUT THE 28 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) AUDIT ALL THE CONCERNS INCLUDING THE ASSESSEE . T HE CA APPOINTED BY T HE CBI FORWARDED THE REPORT STATING THAT THE TRANSACTIONS OF THE ASSESSEE AND ITS ASSOCIATE CONCERNS WERE IN THE NATURE OF ACCOMMODATION ENTRIES AND THEREFORE THE SAME SHOULD BE FORWARDED TO TH E INCOME TAX DEPARTMENT TO ASSESS THE I NCOME TAX FROM THE SAID TRANSACTION CORRECTLY. IT IS PERTINENT TO NOTE THAT THE CA APPOINTED BY THE CBI PREPARED THE AUDIT REPORT WITHOUT CONFRONTING THE SAME TO THE ASSESSEE . THE AO ISSUED NOTICE U /S 133(6) TO SOME OF THE DEBTORS AND CREDITORS AND MOST OF THESE PARTIES WERE VERIFIED BY THE AO . I T IS ONLY IN THE CASE OF THREE CREDITORS THAT THE NOTICES ISSUED U/S 133(6) WERE RETURNED UNSERVED . O UT OF THE THREE CONCERNS M/S STADS LTD WAS STRUCK - OFF FROM THE REGISTER OF COMPANIES AND THE SECOND CONCERN M/S PASHUPATI FABRIC LTD WAS UNDER LIQUIDATION BEFORE COMMENCEMENT OF RE - ASSESSMENT PROCEEDINGS. WE ALSO FIND THAT THE AO HAS NOT BROUGHT TO THE NOTICE OF THE ASSESSEE THAT THE NOTICES SENT TO THESE PARTIES WERE RETURNED UNSERVED AND PROCEEDED TO FRAM E T HE ASSESSMENT BELIEVING THESE PARTIES TO BE NON - GENUINE . I T IS ALSO SUBMITTED THAT BEFORE THE AO, THE NECESSARY DOCUMENTS COULD NOT BE PRODUCE D BECAUSE THE RECORDS WERE IN THE CUSTODY OF CBI. WE FIND THAT THE FAA HAS COMPREHENSIVELY CONSIDERED VARIOUS FACTS AND CONTENTION OF THE ASSESSEE AND CAME TO THE CONCLUSION THAT THE ADDITION OF RS.10,00 , 523/ - WERE MADE ON THE BASIS OF PEAK CREDIT WHICH WAS WRONG AS THE ASSESSEE HAS FULLY DISCLOSED ALL THE TRANSACTIONS IN ITS BOOKS OF ACCOUNT . 29 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) SIMILARLY THE LD .CIT(A) ALSO DELETED T HE ADDITION MADE OF RS.53,32,075/ - AT THE RATE OF 0 .5% OF THE TOTAL SALES ON THE GROUND THAT THE ASSESSEE HAS FULLY DISCLOSED THE SALE S AND PURCHASE S IN ITS BOOKS OF ACCOUNT AND WHATEVER PROFIT OR LOSS EARNED ON THESE TRANSACTION S WERE DULY CALCULATED AND FILED BEFORE THE AO IN THE RETURN OF INCOME . UNDER THESE CIRCUMSTANCES, WE ARE INCLINED TO AGREE WITH THE CONCLUSION DRAWN B Y THE LD.CIT(A) . ACCORDINGLY , THE APPEAL OF THE REVENUE DEPARTMENT IS DISMISSED. I.T.A.NO.4400 TO 4403 /MUM/2014(AYS:2006 - 07 TO 2009 - 10) 12 . GROUNDS OF APPEAL NO.1 AND 2 RAISED BY THE REVENUE IN ALL THESE APPEALS ARE SAME AS HAS BEEN IN ASSESSMENT YEAR 2005 - 06 WHICH HAS BEEN DISMISSED AS NOT PRESSED. ACCORDINGLY, GROUNDS OF APPEAL NO.1 AND 2 ARE DISMIS SED IN THESE APPEALS AS WELL . 13 . GROUNDS OF APPEAL NO.3 IN ITA NO.4400/MUM/2014 (AY - 2006 - 07), GROUND NO.4 IN ITA NO.4401/MUM/2014 (AY - 2007 - 08), GROUND NO.3 IN ITA NO.4402/MUM/2014 (AY - 2008 - 09) AND GROUND NO.4 IN ITA NO.4403/MUM/2014(AY - 2009 - 10) ARE IDENT ICAL TO THAT OF GROUND NO.4 OF ASSESSMENT YEAR 2005 - 06 . SINCE, WE HAVE ALREADY DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE IN ASSESSMENT YEAR 2005 - 06 AND OUR FINDINGS OF THE ASSESSMENT YEAR 2005 - 06 WOULD , MUTATIS MUTANDIS , APPLY TO THE COMMON 30 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) GROUNDS I NVOLVED IN THESE YEA R S. ACCORDINGLY , GROUNDS RAISED BY THE REVENUE IN ALL THESE APPEALS ARE DISMISSED. 14 . GROUNDS OF APPEAL NO.3 IN ITA NO.4401/MUM/2014 (AY - 2007 - 08) AND ITA NO.4402/MUM/2014 (AY - 2008 - 09) ARE IDENTICAL TO THAT OF GROUND NO.3 OF ASSESSM ENT YEAR 2005 - 06. SINCE, WE HAVE ALREADY DECIDED THE ISSUE BY DISMISSING THE APPEAL OF THE REVENUE BY UPHOLDING THE ORDER OF CIT(A) AND OUR FINDINGS OF THE ASSESSMENT YEAR 2005 - 06 WOULD , MUTATIS MUTANDIS , APPLY TO THE COMMON GROUNDS INVOLVED IN THESE YEA R S. ACCORDINGLY, GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 15 . GROUNDS OF APPEAL NO.4 IN ITA NO.4400/MUM/2014 (AY - 2006 - 07) IS AGAINST THE DELETION OF RS.35 LAKHS BY THE LD.CIT(A) AS MADE BY THE AO U/S 68 OF THE ACT IN RESPECT OF UNSECURED LOANS FROM P ASHUPATI FABRIC LTD. 1 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS RECEIVED RS.35 .00 L A KH FROM PASHUPATI FABRIC LTD AS ADVANCE AGAINST THE SUPPLY OF SOFTW ARE . THE AO WRONGLY MISTOOK THE SAME AS UNSECURED LOAN FROM THE SAID PARTY AND ISSUED S HOW CAUSE NOTICE DATED 27.2.2013 AS TO WHY THE SAID AMOUNT SHOULD NOT BE ADDED TO THE TOTAL INCOME OF THE ASSESSEE FOR THE REASONS THAT THE ASSESSEE FAILED TO PRODUCE ANY CONFIRM ATION FROM THE SAID PARTY ALONG WITH THE RETURN OF INCOME AND BA NK STATEMENT A ND THUS THEREBY NOT PROVING 31 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) IDENTITY OF THE CREDITORS, CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTIONS . T HE AMOUNT WAS FINALLY ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE ACT. 17 . IN THE APPELLATE PROCEEDINGS, THE FAA DE LETED THE ADDITION AFTER CONSIDERING THE VARIOUS CONTENTIONS RAISED BY THE ASSESSEE BY OBSERVING AND HOLDING AS UNDER (PG.49 OF CIT(A) (PARA 14.14) (AY - 2006 - 07) : 14.14 SO FAR IS THE ADDITION MADE BY THE AO OF RS.35,00,0001 - UNDER SECTION 6 8 IS CONCERNED, IT IS SEEN THAT THE AO'S OBSERVATION IN THIS REGARD IS INCORRECT. THE APPELL ANT HAS NOT TAKEN ANY LOAN FROM THE SAID PARTY I.E. PASUPATI FABRICS LTD. INSTEAD THE AMO UNT OF R S .35,00,000 / - WAS RECEIVED BY THE APPELLANT FROM PASUPATI FABRICS LTD AS ADVA NCE FO R SUPPLY OF SOFTWARE AND THE THREE PAYMENTS RECEIVED BY THE APPELLANT AGGREGATING TO R S .35,00,000 / - ARE REFLECTED IN THE BANK ACCOUNT OF THE APPELLANT. IT IS STATED BY THE APPELLANT THAT THE SOFTWARE HAS BEEN SOLD TO PASUPATI FABRICS LTD LATER ON 08/05/20 0 6. AS ALREADY STATED, THE APPELLANT HAS FILED A CONFIRMATION OF ACCOUNT IN THIS REGARD FROM THE SAID PARTY. SO FAR AS THE CREDITWORTHINESS OF THE SAID PARTY IS CONCERNED, IT IS SEEN THAT PASUPATI FABRICS LTD HAS A PAID UP CAPITAL OF RS.91 ,21 ,77,200/ - . TH E APPELLANT HAS FILED NECESSARY DOCUMENTS IN THIS REGARD IN PAPER BOOK. IN VIEW OF THIS THEREFORE, EVEN THE ADDITION OF RS.35,00,000/ - U/S 68 IS NOT JUSTIFIED. 18 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT MATERIAL PLACED BEFORE US. WE F IND THAT THE ASSESSEE HAS RECEIVED ADVANCE OF RS.35 LAKHS AGAINST THE SALE OF SOFTWARE FROM PASHUPATI FABRIC LTD WHICH WA S WRONGLY TAKEN BY THE AO AS UNSECURED LOANS. THE LD. CIT(A) HAS RECORDED THE FINDINGS OF FACTS THAT THE SAID AMOUNT WAS RECEIVED AS ADVANCE AGAINST THE SUPPLY OF SOFTWARE WHICH WAS SOLD AND SUPPLIED ON 8.5.2006. THE 32 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) CONFIRMATION ON ACCOUNT WAS ALSO FILED BEFORE THE LD.CIT(A). THE LD. CIT(A) HAS ALSO RECORDED THE FINDINGS OF FACTS THAT THE SAID BUYER M/S PASHUPATI FABRIC LTD HAS P AID UP SHARE CAPITAL OF RS.91,21,77,200/ - AND THEREFORE, THE CREDITWORTHINESS OF THE SAID PARTY WAS NOT IN DOUBT AND FINALLY DELETED THE ADDITION AFTER EXAMINING THE VARIOUS DOCUMENTS IN THE PAPER BOOK WHICH PROVE D THE TRANSACTION TO BE GENUINE AND THE AD VANCES WAS ADJUSTED IN THE SUBSEQUENT YEARS AND THUS DELETED THE ADDITION. IN OUR OPINION, THE ORDER OF THE LD.CIT(A) ON THIS POINT IS VERY REASON ED ORDER WHICH CALL FOR NO INTERFERENCE ON OUR PART AS THE FAA HAS ALLOWED THE APPEAL OF THE ASSESSEE BY OBSE RVING THAT THE ADDITION BY THE AO WAS MADE ON THE WRONG UNDERSTANDING OF FACTS THAT UNSECURED LOAN WAS RECEIVED BY THE ASSESSEE WHEREAS AS A MATTER OF FACTS THE ADVANCE WERE RECEIVED AGAINST THE SALE OF SOFTWARE WHICH WAS FINALLY SUPPLIED ON 8.5.2006. WE, THEREFORE, UPHOLD THE ORDER OF HE LD.CIT(A) BY DISMISSING THE GROUND RAISED BY THE REVENUE. 19 . IN THE RESULT, ALL THE APPEALS OF THE REVENUE STAND DISMISSED. I.T.A. NO.4319 TO 4323/MUM/2014 (BY ASSESSEE) 20 . SINCE, WE HAVE ALREADY DECIDED THE A PPEAL OF THE REVENUE ON MERITS AGAINST THE ASSESSEE BY UPHOLDING T HE ORDER OF LD.CIT(A), THEREFORE, WE DO NOT CONSIDER IT NECESSARY TO ADJUDICATE THE ISSUE ON TECHNICAL GROUND 33 I.T.A. NO.4319 TO 4323/MUM/2014(BY - A) I.T. A. NO.4399 TO 4403/MUM/2014(BY - R) CHALLENGING HE REOPENING O F THE ASSESSMENT U/S 147 R.W.S.148 OF THE ACT. ACCO RDINGLY , ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED AS INFR U CT UOUS. 21 . IN SUM AND SUBSTANCE ALL THE APPEALS FILED BY BOTH T HE PARTIES ARE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 7TH JU LY , 2017 . SD SD ( D.T.GARASIA ) ( RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 7. 7 .2017 SR.PS:SRL: / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A ) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, TRUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI