Aditya & Nayan Enterprises, Delhi V. ITO, New Delhi

ITA 4580/DEL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6565 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 27-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 29-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: PRADEEP KUMAR JAIN
• Keywords: Search and seizure; Accommodation entries
• Section: 153A; 131; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-1, NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NO.4580/DEL/2016 ASSESSMENT YEAR : 2007-08 ADITYA & NAYAN ENTERPRISES, (PROPRIETOR PRADEEP KUMAR JAIN HUF), GULAB SADAN, 152, STATE BANK COLONY, G.T. KARNAL ROAD, NEW DELHI. VS. INCOME TAX OFFICER, WARD-36(4), NEW DELHI PAN : AABHP 9196 D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PRADEEP KUMAR JAIN RESPONDENT BY : SHRI S. K. JAIN, SR. DR DATE OF HEARING : 27-10-2016 DATE OF PRONOUNCEMENT : 01-12-2016 O R D E R PER S.V. MEHROTRA, A.M : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 27.06.2016 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-12, NEW DELHI, U/S 143(3)/148 OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT) RELATING TO A.Y. 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING O FFICER RECEIVED INFORMATION FROM ACIT, CENTRAL CIRCLE-10, NEW DELHI THAT SHRI VAIBHAV JAIN & SHRI NAVNEET JAIN HAD INDULGED IN PROVIDING ACCOMMODATION ENTRIES THROUGH THEIR THIRTY SEVEN PAPER ENTITIES AND CHARG ING COMMISSION FROM THE BENEFICIARIES ON THE ACCOMMODATION ENTRIES PROVIDED . HE NOTED THAT 2 ITA NO.4580/DEL/2016 ASSESSEE WAS ONE SUCH BENEFICIARY AS PER THE INFORM ATION RECEIVED. ACCORDINGLY, NOTICE U/S 148 WAS ISSUED TO ASSESSEE. THE ASSESSEE VIDE LETTER DATED 18.03.2014 STATED THAT THE RETURN OF INCOME F ILED ON 31.10.2007 DECLARING TAXABLE INCOME OF RS.2,60,782/- MAY BE TR EATED AS RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. THE ASSESSI NG OFFICER OBSERVED THAT DURING THE COURSE OF SEARCH AND SEIZURE AND ASSESSM ENT PROCEEDINGS U/S 153A FOR THE ASSESSMENT YEARS 2005-06 TO 2011-12, S HRI VAIBHAV JAIN & SHRI NAVNEET JAIN HAD GIVEN STATEMENT ON OATH U/S 1 31 THAT THEY HAD GIVEN ACCOMMODATION ENTRIES THROUGH THIRTY SEVEN PAPER EN TITIES. THE LIST OF FIRMS GIVING ACCOMMODATION ENTRIES AND THE ACCOMMODATION ENTRIES RECIPIENTS HAD BEEN PROVIDED. SHRI VAIBHAV JAIN & SHRI NAVNEET JA IN HAD ADMITTED TO BE ENGAGED IN THE BUSINESS OF PROVIDING PAPER/ACCOMMOD ATION ENTRY WITHOUT ANY DELIVERY OF GOODS. IT WAS ALSO SUBMITTED ON OA TH THAT THE SALE BILLS (ACCOMMODATION/PAPER BILLS) WERE DESTROYED, NO SOON ER THE TRANSACTION RELATED TO THE RESPECTIVE BILLS WERE OVER. NO BOOK S OF ACCOUNT WERE MAINTAINED FOR THE ACCOMMODATION TRANSACTIONS. HE FURTHER NOTED THAT IT WAS ALSO ADMITTED BY HIM THAT THE RESPECTIVE TRANSA CTION OF RECEIPT OF CONSIDERATION IN LIEU OF ACCOMMODATION BILLS I.E. C HEQUE BY THE BENEFICIARY PARTIES (TO WHOM THE CASH WAS REPAID BEFORE ENCASHM ENT OF CHEQUE) WERE DULY CREDITED IN BANK STATEMENT OF PAPER CONCERNS. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WHOSE PROPRIETOR IS PRAD EEP KUMAR JAIN (HUF) 3 ITA NO.4580/DEL/2016 WAS ONE OF THE BENEFICIARY WHO HAD AVAILED ACCOMMOD ATION ENTRIES OF RS.2,35,868/- + RS.1,44,940/- = RS.3,80,808/- AS PE R THE DETAILS PROVIDED BY SHRI VAIBHAV JAIN. THE ASSESSING OFFICER EXAMINED THE DETAILS FILED BY THE ASSESSEE AND NOTED FROM DETAILS OF LEDGER OF PURCHA SE AND PURCHASE INWARD BRANCH TRANSFER REGISTER THAT THERE WAS ONE PURCHAS E TRANSACTION FOR AMOUNT OF RS.2,36,412/- PLUS RS.9,456/- INPUT TAX ON IT, T OTALING TO RS.2,45,868/- WITH M/S ESS MART ENTERPRISES, WHICH WAS ONE OF THE PAPER ENTITIES OF SHRI VAIBHAV JAIN & SHRI NAVNEET JAIN. HE THEREFORE REQ UIRED THE ASSESSEE TO PROVE THE GENUINENESS OF THE PURCHASE TRANSACTION A ND TO PRODUCE THE PROPRIETOR OF M/S ESS MART ENTERPRISES TO ARRIVE AT THE CORRECT STATE OF AFFAIRS. THE ASSESSEE DID NOT AVAIL THE OPPORTUNIT Y AND DID NOT DISCHARGE THE ONUS CAST ON HIM OF PROVIDING THE GENUINENESS OF TH E TRANSACTION. THE ASSESSING OFFICER MADE ADDITION OF RS.3,90,808/- INTER-ALIA OBSERVING THAT ADDITION OF RS.2,45,868/-, AS PER DETAILS FILED BY THE ASSESSEE, AND RS.1,44,940/- NOT DECLARED BY THE ASSESSEE IN BOOKS OF ACCOUNT WAS MADE. HE FURTHER MADE AN ADDITION OF RS.1,954/- ON ACCOUN T OF COMMISSION CHARGED BY SHRI VAIBHAV JAIN AS ADMITTED BY HIM. L D. CIT(A) CONFIRMED THE ADDITION (RS.2,36,412/- + RS.9,456/- AND COMMIS SION OF RS.1,954/-) INTER-ALIA OBSERVING AS UNDER :- IT IS A FACT THAT APPELLANTS NAME WAS APPEARING I N THE LIST OF PERSONS WHO HAD TAKEN SUCH ENTRY. THEREFORE, ONUS CAST ON THE APPE LLANT HAS NOT BEEN DISCHARGED 4 ITA NO.4580/DEL/2016 AND, THEREFORE, THERE IS NO BASIS IN THE CLAIM OF A PPELLANT HAS CROSS EXAMINATION HAS NOT BEEN ALLOWED TO HIM. 3. THE LD. COUNSEL SUBMITTED THAT THE ADDITION HAS BEEN CONFIRMED SOLELY ON THE BASIS OF OBSERVATIONS MADE BY THE DEPARTMENT AND NO INDEPENDENT ENQUIRIES WERE CONDUCTED FOR MAKING THE ADDITION SP ECIALLY IN CASE WHERE THE ASSESSEE HAS DISCHARGED HIS PRIMARY ONUS OF SHO WING BOOKS OF ACCOUNT, PAYMENT BY WAY OF ACCOUNT PAYEE CHEQUE AND PRODUCIN G VOUCHERS FOR SALE OF GOODS. HE FURTHER SUBMITTED THAT ALL THE RELEVA NT DOCUMENTS VIZ. PURCHASE/SALES BILLS, BANKS, BANK TRANSACTIONS, TIN NOS. IN RESPECT OF SHRI RAKESH GUPTA, SHRI VISHESH GUPTA, SHRI NAVNEET JAIN AND SHRI VAIBHAV JAIN HAD NOT BEEN PROVIDED TO ASSESSEE, DESPITE NUMEROUS REQUESTS. MOREOVER, ASSESSEE HAD NOT BEEN GIVEN OPPORTUNITY TO CROSS-EX AMINE/PHYSICALLY MEET THE ABOVEMENTIONED PERSONS. THE LD. DR RELIED UPON THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PA RTIES AND PERUSED THE RECORD OF THE CASE. THE ADDITION HAS BEEN MADE SOL ELY ON THE BASIS OF STATEMENT GIVEN BY SHRI VAIBHAV JAIN & SHRI NAVNEET JAIN IN THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS U/S 153A OF THE ACT. THIS ADDITION COULD BE MADE ONLY IF IT WAS ESTABLISHED THAT THE DOCUMENTS PRODUCED BY ASSESSEE WITH REGARD TO ALLEGED PURCHASES MADE FROM M/S ESS MART ENTERPRISES WERE NOT GENUINE. THE ADVERSE INFERENCE WAS WITHDRAWN B Y DEPARTMENT MERELY ON THE BASIS OF STATEMENT RECORDED IN THE COURSE OF SEARCH AND SEIZURE 5 ITA NO.4580/DEL/2016 OPERATION AND UNDER SUCH CIRCUMSTANCES, IT WAS INCU MBENT UPON THE ASSESSING OFFICER TO PROVIDE REASONABLE OPPORTUNITY FOR CROSS-EXAMINATION OF SHRI VAIBHAV JAIN TO ASSESSEE BEFORE ARRIVING AT ANY CONCLUSION. I, THEREFORE, RESTORE THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TO PROVIDE REASONABLE OPPORTUNITY TO ASSESSEE FOR CROS S-EXAMINATION OF SHRI VAIBHAV JAIN. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 ST DAY OF DECEMBER, 2016. SD/- SD/- (SUDHANSHU SRIVASTAVA) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 01-12-2016. SUJEET COPY OF ORDER TO: - 1) THE APPELLANT; 2) THE RESPONDENT; 3) THE CIT; 4) THE CIT(A), NEW DELHI; 5) THE DR, I.T.A.T., NEW DELHI; BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, NEW DELHI