SHREE KRISHNA BENEFICIARY TRUST, MUMBAI V. ITO 12(3)(1), MUMBAI

ITA 4538/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4063 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Next Hearing Date: 15-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 02-07-2014
• Court: TRIBUNAL
• Department Lawyers: ARVND KUMAR
• Assessee Lawyers: NIDHI PATEL
• Keywords: Unexplained investment; Accommodation entries
• Section: 69; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER I.T.A. NO.4538/M/2014 (ASSESSMENT YEAR: 2005 - 2006 ) SHREE KRISHNA BENEFICIARY TRUST, 79, MITTAL CHAMBERS, NARIMAN POINT, MUMBAI - 21. / VS. ITO - 12(3)(1), AAYAKAR BHAVAN, 1 ST FLOOR, M.K. MARG, MUMBAI - 20. ./ PAN : AAETS6048J ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MS. NIDHI PATEL / RESPONDENT BY : SHRI ARVND KUMAR, DR / DATE OF HEARING : 12.4.2016 / DATE OF PRONOUNCEMENT : 22 .04.2016 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 2.7.2014 IS AGAINST THE ORDER OF THE CIT (A) - 23, MUMBAI DATED 7.3.2014 FOR THE ASSESSMENT YEAR 2005 - 2006. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS, WHICH READ AS UNDER: - 1. THE CIT (A) ERRED IN UPHOLDING THE ACTION OF THE AO IN ISSUING NOTICE U/S 148 OF THE ACT AND FRAMING THE IMPUGNED ORDER. THE APPELLANT CONTENDS THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT (A) OUGHT NOT TO HAVE UPHELD THE ACTION OF THE AO INASMUCH AS THE ISSUE OF NOTICE U/S 148 IS BAD IN LAW AND NEE DS TO BE QUASHED AND CONSEQUENTLY THE IMPUGNED ORDER OF REASSESSMENT. 2. THE LD CIT (A) ERRED IN UPHOLDING THE ACTION OF THE AO IN TREATING RS. 91,426/ - AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. THE APPELLANT CONTENDS THAT ON THE FACTS AND IN THE CIRCUM STANCES OF THE CASE AND IN LAW, THE CIT (A) OUGHT TO HAVE UPHELD THE ACTION OF THE ASSESSING OFFICER IN TREATING RS. 91,426/ - AS UNEXPLAINED INVESTMENT U/S 69 OF THE ACT. 3. THE CIT (A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CONSIDERING CAPITAL GAINS OF RS. 85,937/ - AS INCOME FROM OTHER SOURCES. 3.1. FURTHER, THE CIT (A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN TREATING THE SAME AS INCOME U/S 69 OF THE ACT. THE APPELLANT CONTENDS THAT ON THE FACTS AND IN THE CIRCUMSTANCE S OF THE CASE AND IN LAW, THE CIT (A) OUGHT NOT TO HAVE UPHELD THE ACTION OF ASSESSING OFFICER IN CONSIDERING THE CAPITAL GAINS RS. 85,937/ - AS INCOME FROM OTHER SOURCES. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTION TO GROUND NO.1 , RELATING TO THE REOPENING OF THE ASSESSMENT, WAS NOT PRESSED. AFTER HEARING THE LD DR, THE SAID GROUND NO.1 IS DISMISSED AS NOT PRESSED . 3. REGARDING GROUND NO S .2 & 3 , RELATING TO THE ADDITION OF RS. 91,426/ - (GROUND NO.2) AND RS. 85,937/ - (GROUND NO.3 ) U/S 69 OF THE ACT, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID ADDITION S WERE MADE CONSIDERING THE UNEXPLAINED INVESTMENTS IN THE STOCKS / SHARES, WHICH IS ALLEGEDLY CONNECTED TO THE CHOKS H I GROUP OF COMPANIES. IT IS THE CONTENTION OF THE LD DR THAT MR. CHOKS H I PROVIDED ACCOMMODATION ENTRIES FOR THE ASSESSEE ALONG WITH MANY OTHERS. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE, FILED A COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF RAMACHANDRA BAGRODIA HUF AND RAMACHANDRA ASHISH BAGRODIA HUF IN IT A NOS. 4539 AND 4540/M/2014 RESPECTIVELY FOR THE AY 2005 - 2006, DATED 4.12.2014. THESE ASSESSEES ARE ALSO SAID TO THE CONNECTED TO MR. CHOKS H I GROUP OF COMPANIES AND HIS BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. THERE WAS A SEARCH BY THE DEPARTMENT AND A STATEMENT WAS RECORDED WHEREIN HE ADMITTED THE FACT OF PROVIDING BOGUS BILLS AS PER THE DISCUSSION GIVEN IN PARA 9 OF THE SAID ORDER OF THE TRIBUNAL AND THE TRIBUNAL (SMC) GRANTED RELIEF TO THOSE ASSESSEES. 4. ON THE OTHER HAND, LD DR FILED ANOTHER ORDE R OF THE TRIBUNAL IN THE CASE OF SANTALAL GUPTA VS. ITO IN ITA NO. 2802/M/2015 (AY 2007 - 08) AND KANTADEVI GUPTA VS. ITO IN ITA NO. 2829/M/2015 (AY 2007 - 2008), DATED 29.2.2016. THIS IS A DIVISION BENCH JUDGEMENT AND SUBSEQUENT TO THE ABOVE SAID SMC ORDER S DATED 4.12.2014 (SUPRA). IN THIS REGARD, LD DR BROUGHT MY ATTENTION TO PARA 5 OF THE SAID TRIBUNALS ORDER DATED 29.2.2016 AND MENTIONED THAT THE TRIBUNAL HAS CONFIRMED THE ADDITION MADE BY THE AO IN THAT CASE. HE ALSO SUBMITTED THAT THE SAID ADDITION WA S MADE IN THAT CASE BASED ON THE SUBMISSION OF MR. CHOKS H I AND HIS BUSINESS OF PROVIDING ACCOMMODATION ENTRIES. 5. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF CITED ORDER S OF THE TRIBUNAL (SUPRA), I AM OF THE OPINION THAT THE COORDINATE BENCH DECISION DATED 29.2.2016 IS REQUIRED TO BE FOLLOWED AS A PART OF JUDICIAL DISCIPLINE IN SUPPRESSION OF SMC DECISION OF THE TRIBUNAL DATED 4.12.2014 (SUPRA). THE FACTS OF THESE CASES ARE CLOSELY AKIN TO THE ABOVE SAID COORDINATE BENCH DECISION IN THE CASE OF KANTA DEVI GUPTA (SUPRA). AS SUCH, LD COUNSEL FOR THE ASSESSEE COULD NOT DISTINGUISH THE FACTS OF THIS CASE TO THE ONES ALREADY DECIDED BY THE DIVISION BENCH IN THE CASE OF SANTALAL GUPTA AND OTHERS (SUPRA). FOR THE SAKE OF CONVENIENCE AND COMPLETENESS OF THIS ORDER, RELEVANT LINES FROM THE SAID PARA 5 OF THE SAID TRIBUNALS ORDER DATED 29.2.2016 ARE EXTRACTED AS UNDER: - 5.........IN THE LIGHT OF THE SAID AFORESAID DISCUSSION AND THE JUDICIAL PRONOUNCEMENT DISCUSSED HEREINABOVE, THERE IS CATEGORICAL FINDING IN PARA 3.3.3 OF THE IMPUGNED ORDER THAT BOTH THE ASSESSEE BEFORE US ARE BENEFICIARY OF ACCOMMODATION ENTRY PROVIDED BY SHRI MUKESH CHOKSHI AND HIS ASSOCIATES. BEFORE US, THE ASSESSEE HAS NOT CONTRADICTED THE FACTUAL FINDING RECORDED IN THE IMPUGNED ORDER, THUS, CONSIDERING THE TOTALITY OF FACTS, WE FIND NO INFIRMITY IN THE IMPUGNED ORDER, CONFIRMING THE ASSESSED AS INCOME FROM OTHER SOURCES. THE STAND TAKEN BY THE LD FIRST APPELLATE AUTHORITY IS AFFIRMED, THEREFORE, BOTH THE APPEALS ARE HAVING NO MERIT, THEREFORE, DISMISSED. 6. CONSIDERING THE ABOVE, I AM OF THE OPINION, THE ADDITION OF RS. 91,426/ - MADE BY THE AO U/S 69 OF THE ACT BASED ON THE STATEMENT OF MR. M. CHOKSHI IS CONFIRMED. THEREFORE, I AM OF THE CONSIDERED OPINION THAT THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE AS THE SAME IS IN TUNE WITH THE ORDER OF THE TRIBUNAL DATED 29.2.2016 (SUPRA). THUS, THE CONCLUSION S DRAWN BY THE CIT (A) AT PAGES 14 AND 15 OF HIS ORDER ARE CONFIRMED. ACCORDI NGLY , GROUND NO S .2 AND 3 RAISED BY THE ASSESSEE ARE DISMISSED . 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. O RDER IS PRO NOUNCE D IN THE OPEN COURT ON 22 ND APRIL, 2016. SD/ - (D. KARUNAKARA RAO) ACCOUNTANT MEMBER MUMBAI ; 22.4 .2016 . . ./ OKK , SR. PS / 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 . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI