SUDHIR B VORA, MUMBAI V. ASST CIT CEN CIR 18 &19, MUMBAI

ITA 4621/MUM/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0137 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 09-04-2015
• Assessment Year: 1997-1998
• Appeal Filed On: 13-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A L SHARMA SRAR
• Keywords: Bogus purchase; Opportunity of being heard; Tangible material; Accommodation entries
• Section: 143(3); 133A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI R.C. SHARMA , AM AND SHRI AMARJIT SINGH , JM I.T.A. NO S . 4621 /M/ 20 13 & 4622/M/2013 ASSESSMENT YEAR S : 1997 - 98 & 19 9 8 - 99 ) SUDHI R B VORA PARAS - 2, GULMOHAR CROSS RD NO.4, JVPD SCHEME MUMBAI. PIN: 400049 VS. ASST CIT CEN CIR 18 & 19 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD. MUMBAI PIN: 400020 ./ ./ PAN/GIR NO. : AABPV 7456 Q ( APPELLANT ) .. ( RESPONDENT ) I.T.A. NOS . 4440/M/2013 & 441 /M/2013 ASSESSMENT YEARS : 1997 - 98 & 1 9 98 - 99 ) ASST CIT CEN CIR 18 & 19 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD. MUMBAI PIN: 400020 VS. SUDHI R B VORA PARAS - 2, GULMOHAR CROSS RD NO.4, JVPD SCHEME MUMBAI. PIN: 400049 ./ ./ PAN/GIR NO. : AABPV 7456 Q (APPELLANT ) .. (RESPONDENT ) DATE OF HEARING : 07 .0 7 .2017 DATE OF PRONOUNCEMENT : 29 . 08 .2017 O R D E R PER AMARJIT SINGH, JM: ASSESSEE BY: SHRI A.L. SHARMA (SR,AR) DEPARTMENT BY: SHRI RAM TIWARI (SR AR) SUDHIR B VORA 2 THE ABOVE MENTIONED APPEA LS HAVE BEEN FILED BY THE REVENUE AS WELL AS ASSESSEE AGAINST THE DIFFERENT ORDER PASSED BY THE COMMIS S IONER OF INCOME TAX (APPEALS) - 39 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR S 1997 - 98, 1998 - 99 . ITA NO.4621 /M/201 3 : - 2. THE ASSESSEE HAS FILED THE PRESENT A PPEAL AGAINST THE ORDER DATED 13 .03.201 3 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 39 MUMBAI, [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE ASSESSMENT YEAR 1997 - 98 . 3 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS.3,81,637/ - BEING CASH RECEIVED BY APPELLANTS BROTHER NARESH VORA FROM NAPTHA QUOTA HOLDER PARTIES ON WHICH COMMISSION INCOME HAS BEEN CONSIDERED IN THE HANDS OF NARESH VORA. 2. THE APPELLANT CRAVES, LEAVE TO ADD, ALTER, MODIFY, ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 29.10.1997 DECLARING TOTAL INCOME TO THE TUNE OF RS. 1,83,310/ - FOR THE A SSESSMENT YEAR OF 1997 - 98 . A SURVEY ACTION U/S 133A WAS CONDUCTED BY THE INVESTIGATION WING OF THE DEPARTMENT ON 28.09.1998. THE ASSESSMENT WAS COMPLETED ON 28.03.2000 AFTER DETERMINING THE TAXABLE INCOME TO THE TUNE OF RS.5,79,84,610/ - . THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO PARTLY ALLOWED THE SUDHIR B VORA 3 APPEAL OF THE ASSESSEE. THEREAFTER, THE ORDER OF THE CIT(A) WAS GIVEN EFFECT ON 17.09.2002 DETERMINING TAXABLE INCOME OF RS.1,31,38,920/ - . THEREAFTER BOTH THE PARTIES FILED AN APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL SET ASIDE THE ORDER OF THE CIT(A) AND SEND THE MATTER OF CONTROVERSY FOR FRESH CONSIDERATION BY THE AO VIDE ORDER DATED 29.11.2007. THE ASSESSEE SUDHIR RAI VORA AND HIS BROTHER SHRI SURESH RAI VORA AND BALWANTI RAI VORA WERE HAWALA BILL PR OVIDERS TO SOME OF THE PETROLEUM PRODUCT DEALERS IN MUMBAI . THEY WERE PROVIDED HAWALA BILLS TO MEMBER OF THAKKAR GROUP AND PILOT VIJAN GROUP. THE PETROLEUM PRODUCTS DEALERS WERE HAVING LICENSE TO TRADE IN NAPTHA AND OTHER NAPTHA BASED PRODUCTS. THE LICENSE S WERE ISSUED BY THE MINISTRY OF PETROLEUM AND THE END USERS OF THE NAPTHA RELATED PETROLEUM PRODUCTS WERE PAINT AND VARNISH INDUSTRIES. HOWEVER, NAPHTHA WAS FOUND TO BE SOLD IN THE OPEN MARKET , TO PETROL PUMP OWNERS FOR ADULTERATION IN THE PETROL ETC. TH E NAPTHA WAS SOLD TO THE PETROL PUMPS AT A HEAVY PREMIUM OF RS.8.00 PER LITRE IN TANKER LOADS. EACH TANKER HAS CAPACITY OF 12,000 LITERS. FOR INDULGING IN THIS OPERATION , THE ASSESSEE PROVIDED BOGUS PURCHASE BILLS TO THE NAPTHA DEALERS. THE ASSESSEE HAS AC CEPTED THAT HE WAS INDULGED IN THIS PRACTICE. 5. THE ASSESSEE HAS ACCEPTED CASH ALONG WITH FABRICATED TRANSPORT BILLS FROM THE NAPTHA DEALERS AND DEPOSITED THE CASH IN THE BANK ACCOUNTS MAINTAINED BY HIM AND HAS ISSUED DEMAND DRAFT/PAY ORDER TO SUDHIR B VORA 4 THE NAPTHA DEALERS. THE ASSESSEE CLAIMED THAT HE USED TO GET A FIXED COMMISSION ON THE VALUE OF THE BILLS. THE TANKER LOAD OF THE NAPTHA WILL DIRECTLY AND CLANDESTINELY SOLD TO THE PETROL PUMP OWNERS FOR ADULTERATION AND THE OWNERS PAY THE PRICE OF THE TANKER IN CASH TO THE NAPTHA DEALERS. ON RECEIVING THE INFORMATION ABOUT THE ACTIVITY, THE BUSINESS PREMISES OF THE ASSESSEE WAS COVERED U/S 133A BY THE INVESTIGATION WING OF THE INCOME TAX DEPARTMENT ON 24.09.1998. NUMBER OF NOTE BOOKS, DIARIES, NEWSPAPER, REGISTER, ET C., WERE IDENTIFIED AND SUBSEQUENTLY IMPOUNDED U./S 131(3). SUBSEQUENTLY, ACTION U/S 132 OF THE ACT WAS ALSO CARRIED OUT IN THE CASES OF PETROLEUM PRODUCTS DEALER SUCH AS THAKKAR GROUP AND PILOT VIJAN GROUP. IN THIS CONNECTION SHRI NARESH B VORA WAS DETAIN ED IN THE PRISON AS PER THE ORDERS OF THE DISTRICT COLLECTOR GUJARAT. SINCE , THE NARESH B VORA WAS NOT GIVEN AN OPPORTUNITY THEREFORE, DIRECTION WAS GIVEN TO PASS THE ORDER A FRESH AFTER GIVING AN OPPORTUNITY BEING HEARD TO ASSESSEE AS WELL AS NARESH B VOR A. THEREAFTER, IN COMPLIANCE TO THE DIRECTION OF THE TRIBUNAL , THE ORDER WAS PASSED ASSESSING THE TOTAL INCOME TO THE TUNE OF RS.1,25,29,699/ - . ON APPEAL CIT(A) HAS CONFIRMED THE ORDER. FEELING AGGRIEVED THE ASSESSEE FILED THE PRESENT APPEALS BEFORE US. IS SUE NO.1: - 6 . UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF THE ADDITION OF RS.3,81,637/ - . THE MAIN CONTENTION OF THE ASSESSEE IS SUDHIR B VORA 5 THAT AN AMOUNT OF RS.3,81,637/ - WAS RECEIVED BY HIS BROTHER NARESH B VORA IN THE CASH FROM NAPTHA QUOTA HOLDER PARTIES AND COMMISSION INCOME THEREON HAS BEEN CONSIDERED AND ASSESSED IN THE HAND OF NARESH B VORA THEREFORE I N THE SAID CIRCUMSTANCES, THE PRESENT ADDITION IN THE HAND OF ASSESSEE IS NOT JUSTIFIABLE . THE ASSESSEE HAS NO OBJECTION IF THE SAID CLAIM BE VERIFIED. THIS FACT NEEDED TO BE VERIFICATION , THEREFORE , FINDING OF THE CIT(A) IN THIS REGARD DOES NOT FROM JUSTIFIABLE HENCE, ORDER ED TO BE SET ASIDE AND WE RESTORED THIS ISSUE ON THE FILE OF THE AO TO VERIFY THIS FACT THAT AN AMOUNT OF RS.3,81,367/ - AND ITS COMMISSION HAS ALREADY BEEN CONSIDERED IN THE HAND OF THE NARESH K VORA. T HE AO WOULD PASS THE ORDER AFRESH IN THIS REGARD AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AC CORDINGLY, THIS ISSUE IS HEREBY DECIDED IN THE FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO.2: - 7 . ISSUE NO.2 IS FORMAL IN NATURE WHICH NOWHERE REQUIRED ANY ADJUDICATION. 8 . IN RESULT, APPEAL FILED BY THE ASSESSEE I S HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE . I TA NO.4440 /M/201 3 : - 9 . THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 31.03.2015 PASSED BY THE COMMISS IONER OF INCOME TAX (APPEALS) - 39 , SUDHIR B VORA 6 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVAN T TO THE ASSESSMENT YEAR 1997 - 98 . 10 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1 . 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIET(A) ERRED IN HOLDING THAT THE CASH DEPOSITS AMOUNTING TO RS.2, 13,83,250/ - FROM THE PART OF TOTAL CASH DEPOSITS CONSIDERED IN THE HANDS OF SHRI NARESH B VORA, BROTHER OF ASSESSE AND HENCE CANNOT BE TAXED AGAIN IN THE HANDS OF SHRI SUDHIR B VORA. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE SALE OF RS45, 18,575/ - RELA TES TO M/S. GALAXY PLAST - O - CHEM, A PROPRIETARY CONCERN OF SHRI NARESH B VORA AND THEREFORE, NO ADDITION PERTAINING TO THE SAID CONCERN CAN BE MADE IN THE HANDS OF THE ASSESSE.'. 3. 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN DELETING THE ADDITION ON ACCOUNT OF 30% OF OPENING CAPITAL IGNORING THE FACT THAT HE ASSESS E E DID NOT FURNISH ANY EVIDENCES TO EXPLAIN THE OPENING CAPITAL AND AO HAD GIVEN CREDIT @70% OF THE OPENING CAPITAL KEEPING IN VIEW THE FACT THAT THE ASSESSEE WAS INTO THE BUSINESS AND AN INCOME TAX ASSESSE FOR SEVERAL YEAR.' 4 THE APPEL1ANTT.V TO LEAVE TO ADD, TO AMEND AND / OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 5. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUNDS STATED ABOVE, THE ORDER OF THE CI T(A) - 39, MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. . 1 1 . THE FACTS OF THE PRESEN T CASE ARE QUITE SIMILAR TO THE FACTS OF THE CASE AS NARRATED IN TH E ABOVE MENTIONED APPEAL NO . 4621 /M/201 3 ABOVE BECAUSE OF THE SAME YEAR, THEREFORE, THERE IS NO NEED TO REPEAT THE SAME. ISSUE NO.1: - SUDHIR B VORA 7 12 . UNDER THIS ISSUE THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF THIS FACT BY CIT(A) THAT THE CASH DEPOSITS AMOUNTING OF RS.2,13,83,250/ - HAS BEEN CONSIDERED IN THE HAND OF NARESH B VORA THEREFORE THE SAME IS NOT LIABLE TO BE TAXABLE AGAIN. T HE FINDING OF THE CIT( A) IN THIS REGARD IS HEREBY MENTIONED BELOW.: - I HAVE CAREFULLY CONSIDERED THE MATTER. FROM A READING OF THE ORDER OF - THE AO IT IS PERCEIVED THAT THE AO IS ACCOUNT NO. 2166 I N SATARA SAHAKARI BANK LTD., MANDVI BRANCH. IN THE VERY NEXT SENTENCE THE A.O IS MENTIONING THE TOTAL CASH DEPOSITS MADE DURING THE PREVIOUS YEAR RELATING TO AN 1997 - 98. THUS IT CAN BE PERCEIVED THAT ON THE ONE HAND THE A.O IS REFERRING TO A/C. NO. 2166 AN D ON OTHER HAND HE IS REFERRING TO TOTAL CASH DEPOSITS RECEIVED FROM THE NAPHTHA QUOTA HOLDERS, WITHOUT IN FACT SPECIFYING THE RESPECTIVE BANK ACCOUNTS TO WHICH THE SAID SUMS HAVE BEEN DEPOSITED. THE APPELLANT HAS SUBMITTED THAT A TOTAL SUM OF RS. 2,1 1,63 .040/ - WAS RECEIVED BY SHRI NARESH VORA FROM ATLAS PETROCHEMICALS LTD., AND HANDSRUP PETROCHEM LTD., NAPTHA DEALERS. IT HAS TO BE MENTIONED HERE THAT IN THE ASSESSMENT AS COMPLETED IN THE CASE OF SHRI NARESH VORA FOR THE YEAR 197 - 98 IT HAS BEEN FOUND THE T OTAL CASH DEPOSITS RECEIVED DURING THE SAID YEAR IS RS. 13,89,11,705/ - ON WHICH 4% COM MISSION HAD BEEN BROUGHT TO TAX , WHICH HAS BEEN CONFIRMED IN FIRST APPEAL. FURTHER IT IS NOTED THAT THE A.O HAS NOT SPECIFICALLY POINTED OUT THE ACCOUNT IN WHICH OR PERTA INING TO WHOM THE DEPOSIT OF RS. 2,13,83,250/ - WAS MADE. IN THIS CONTEXT IT IS RELEVANT TO REVERT TO THE ASSESSMENT ORDER PASSED IN THE CASE OF SHRI SUDHIR VORA FOR AN 1997 - 98 UNDER S. 143(3) DATED 28.3.2000, A COPY OF WHICH HAS BEEN PLACED IN THE PAPER BO OK AS SUBMITTED IN PAGE NOS 34 TO 48. IN PARAGRAPH 13 OF THE SAID ORDER DATED 28.3.2000 THE A.O HAS MENTIONED THAT THE UNEXPLAINED DEPOSIT IN ACC OUNT NO. 2166 IS RS. 3,81,637/ - . AS PER THE SAID FINDING OF THE AO THERE IS A DEPOSIT OF RS. 3,8 1,637 IN ACCOU NT NO. 2166 IN THE NAME OF S.B. VORA & CO. IT THUS FOLLOWS THAT THERE ARE NO FURTHER DEPOSITS AS MENTIONED OF RS. 2,13,83,250/ - IN ACCOUNT NO. 2166 THOUGH IT IS MENTIONED SO IN PARAGRAPH 10 OF THE ORDER. HENCE IF AT ALL ANY ADDITION HAS TO BE MADE IT HAS T O BE LIMITED TO RS. 3,81,637/ - . UNDER THE CIRCUMSTANCES, THE ADDITION IS RESTRICTED TO RS. 3,81,637/ - . IT IS ORDERED ACCORDINGLY. SUDHIR B VORA 8 13 . ON APPRAISAL OF THE ABOVE MENTIONED FINDING OF THE CIT(A) WE NOTICED THAT THE CIT(A) CONSIDERED AND REDUCED THE ADDITION ON THE PART OF THE ASSESSEE ON THE GROUND OF THAT THE AMOUNT IN QUESTION HAS BEEN ASSESSED IN THE HAND OF THE NARESH B VORA. THE DETAIL HAS BEEN GIVEN IN THE ABOVE MENTIONED PARA, THEREFORE, THERE IS NO NEED TO REPEAT THE SAME. FACTUAL POSITION IS ALSO NOT IN DISPUTE RATHER THE ASSESSEE HAS CHALLENGED THE ADDITION TO THE TUNE OF RS. 3,81,367/ - IN HIS APPEAL ITA NO.4621/M/2013 WHICH HAS BEEN ALLOWED AND REMANDED TO THE AO FOR VERIFY F ACT ABOUT THIS FACT WHETHER THE SAID AMOUNT HAS ALREADY BEEN TAXED OR CONSIDERED IN FAVOUR OF NARESH B VORA OR NOT. THE PRESENT APPEAL OF THE REVENUE DID NOT DISCLOSE ANY FACT THAT THE CIT(A) HAS WRONGLY DELETED THE SAID ADDITION . A CCORDINGLY , THIS ISSUE I S DECIDED AGAINST THE REVENUE . ISSUE NO.2: - 1 4 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE FINDING OF THE CIT(A) THAT THE SALE OF RS. 45,18,575/ - RELATES TO M/S. GALAXY PLAST - O - CHEM, A PROPRIETARY CONCERN OF SHRI NARESH B VORA AND WAS NOT HAVING ANY CONCERN WITH THE ASSESSEE . BEFORE GOING FURTHER IT IS NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD. : - I HAVE CONSIDERED THE MATTER. FROM A READING OF THE SUBMISSION AS MADE BY THE APPELLANT IT IS OBSERVED THAT WHAT THE APPELLANT WAS TRYING TO EXPLAIN WAS THAT THE NOTING IN THE SAID LOOSE PAPER IS WITH REFERENCE TO THE FICTITIOUS TRANSACTIONS ENTERED INTO WITH A NAPTHA QUOTA HOLDERS. IT IS OBSERVED FROM THE ASSESSMENT ORDER THAT THE EXPLANATION OF TH E APPELLANT WAS THAT RS.45,18,575/ - SUDHIR B VORA 9 REPRESENTS FICTITIOUS SALE BY HANDRSUP PETROCHEM PVT. LTD., A NAPTHA QUOTA HOLDER AND THAT THE SAID CASH HAS BEEN RECEIVED BY SHRI NARESH VORA. IT IS FURTHER OBSERVED THAT THE AO HAS REJECTED THE SAID EXPLANATION STATING THAT IT IS MERE A SE LF SERVING STATEMENT. HOWEVER, I AM OF THE VIEW THAT IN THE CONTEXT OF THE FACTS AS UNEARTHED BY THE INVESTIGATION WING THAT THE APPELLANT AND HIS BROTHER WERE ENGAGED IN PROVIDING HAWALA BILLS/ACCOMMODATION ENTRIES, THE SAID EXPLANATION IS NOT WITHOUT MER ITS. IF THE PURCHASES ARE FICTITIOUS THAN IT FOLLOWS THE SALES ARE EQUALLY FICTITIOUS. MOREOVER THE AO HAD HIMSELF ADDED THAT SALE OF RS. 45,18,575/ - RELATES TO M/S. GALAXY PLAST - O - CHEM. IT HAS ALREADY BEEN CONCERN OF SHRI NARESH VORA, THE BROTHER OF THE A PPELLANT. IN SO FAR AS THE TRANSACTION RELATES TO M/S. GALAXY PLAST - O - CHEM, IT IS HELD THAT NO ADDITION PERTAINING TO SAID CONCERN CAN BE MADE IN THE HANDS OF THE APPELLANT. THE ADDITION OF RS.45,18,575/ - IS THEREFORE, DELETED. 15. ON APPRAISAL OF THE ABOVE MENTIONED ORDER , WE FOUND THAT THE ASSESSING OFFICER ADDED THE SALE OF RS. 45,18,575/ - RELATES TO M/S M/S. GALAXY PLAST - O - CHEM, WHICH WAS THE PROPRIETARY CONCERN OF SHRI NARESH B VORA. SINCE, THIS TRANSACTION WAS NOT RELATED TO THE ASSESSEE, THEREFORE, THE SA ME WAS ORDER TO BE DELETED. THE FACTS ARE NOT DIFFERENT AT THIS STAGE. NOTHING WAS PRODUCED BEFORE US TO SUGGEST THE MATTER THAT THE SAID AMOUNT WAS BELONGING TO THE ASSESSEE. NO DOUBT IN THE SAID CIRCUMSTANCES, THE CIT(A) HAS RIGHTLY DELETED THE SAID ADDITION HENCE WE AFFIRMED THE FINDING OF THE CIT(A) ON THIS ISSUE AND DECIDED THIS ISSUE AGAINST THE REVENUE. ISSUE N.3: - 16. U NDER THIS ISSUE IS REVENUE HAS CHALLENGED THE DELETION OF THE 30% OF CAPITAL REVENUE OF RS.3,39,000/ - OUT OF RS. 11,31,560/ - WHICH WAS NOT EXPLAINED PROPERLY BEFORE THE AO. F OR THE SAKE OF SUDHIR B VORA 10 CONVENIENCE , IT IS NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON THIS ISSUE .: - I HAVE CONSIDERED THE MATTER. IT IS UNDISPUTED THAT THE APPELLANT HAS BEEN AN INCOME TAX ASSESSEE AND HAS BEEN FILING RETURNS OF INCOME. IT HAS BEEN DEMONSTRATED BY THE APPELLANT AS P ER THE COPY OF BALANCE SHEET FOR A.Y.1996 - 97 THAT THE CLOSING BALANCE AS ON 31.03.1996 IS 11,07,976/ - HOWEVER, THE APPELLANT HAS TAKEN CREDIT FOR OPENING BALANCE AS ON 1.3.1996 AT RS.11,31,56/ - , THUS THERE IS A DIFFERENCE OF RS.23,584/ - IT IS HELD THAT IT IS THIS DIFFERENCE WHICH IS TO BE BROUGHT TO TAX. THUS, AS AGAINST THE ADDITION OF RS.3,39,468/ - AN ADDITION OF RS.23,584/ - IS SUSTAINED. THE APPELLANT GETS RELIEF OF RS.3,15,884/ - . 17. THE ABOVE SAID MATTER OF CONTROVERSY WAS DECIDED BY CIT(A) ON THE BAS IS OF THE PEAK OF ACCOUNT MAINTAINED BY THE ASSESSEE. THE CAPITAL ACCOUNT OF THE ASSESSEE AS ON 31.03.1996 WAS TO THE TUNE OF RS.11,07,976/ - . WHEREAS THE OPENING BALANCE WAS TO THE TUNE OF RS.11,31,56/ - AS ON 01.03.1996 THE ONLY DIFFERENCE WAS TO BE FOUND OF RS.23,584/ - AND ADDITION ON THIS ACCOUNT WAS SUSTAINED BY THE CIT(A) . WE FOUND NO TANGIBLE MATERIAL ON RECORD TO WHICH IT CAN ASSUME D THAT THE CIT(A) HAS WRONGLY DELETED THE SAID ADDITION THEREFORE, IN THE SA ID CIRCUMSTANCES WE CONFIRM THE ORDER OF THE FINDING OF THE CIT(A) ON THIS ISSUE. ACCORDINGLY , THIS ISSUE IS BEING DECIDED IN FAVOUR OF ASSESSEE. ISSUE NO. 4 - 5 : - 18 . THESE ISSUES ARE FORMAL IN NATURE WHICH NOWHERE REQUIRED ANY ADJUDICATION. SUDHIR B VORA 11 19 IN RESULT APPEAL FILED BY THE REVENUE IS HER E BY ORDERED TO BE DISMISSED . I TA NO.4622 /M/201 3 : - 20 . THE ASSESSEE HAS FILED THE PRESENT APPEAL AG AINST THE ORDER DATED 13 .03.2013 PASSED BY THE COMMISS IONER OF INCOME TAX (APPEALS) - 39 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE ASSESSMENT YEAR 1998 - 99 . 2 1 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1 . ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT (A) ERRED IN TAXING COMMISSIONOF RS.4,39,494/ - ON CASH DEPOSITS OF RS.1,09,87,257/ - (30,90,602 + 78,96,655). THE LD. CIT(A) FAILED TO APPRECIATE THAT HAWALA BUSINESS WAS DONE BY APPELLANT BROTHER NARESH VORA AND THAT THE COMMISSION ON THE SAID AMOUNT HAS BEEN TAXED INTO HIS HANDS. 2. THE APPELLANT CRAVES, LEAVE TO ADD, ALTER, MODIFY, ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2 2 . THE FACTS OF THE PRESENT CASE ARE THE SAME AS MENTIONED IN TH E ABOVE MENTIONED APPEAL NO 4621/M/2013 THEREFORE, THERE IS NO NEED TO REPEAT THE SAME. HOWEVER , THE FIGURE IS DIFFERENT. ISSUE NO.1: - SUDHIR B VORA 12 2 3 . UNDER THIS ISSUE , THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF THE COMMISSION OF RS. 4,39,494/ - . THE CONTENTION OF THE ASSESSEE IS THAT THE SAID AMOUNT HAS ALREADY BEEN ASSESSED WITH HIS BROTHER NARESH B VORA THEREFORE THE SAID COMMISSION IS NOT LIABLE T O BE CONSIDERED IN THE HAND OF ASSESSEE, THEREFORE, IN THE SAID CIRCUMSTANCES, THE PRESENT ADDITION IS NOT JUSTIFIABLE WHICH CAN BE VERIFIED IN ACCORDANCE WITH LAW. THIS FACT NEEDS TO BE VERIFICATION THEREFORE FINDING OF THE CIT(A) IN THIS REGARD DOES NOT SEEMS JUSTIFIABLE HENCE, ORDER IN THIS REGARD IS HERBY ORDERED TO BE SET ASIDE AND WE RESTORED THIS ISSUE ON THE FILE OF THE AO TO VERIFY THIS FACT THAT AN AMOUNT OF RS.4,39,494/ - AND ITS COMMISSION HAS ALREADY BEEN CONSIDERED IN THE HAND OF THE ASSESSEE OR NOT. T HE AO WOULD PASS THE ORDER ON THIS ISSUE AF TER GIVING AN OPPORTUNITY BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THIS ISSUE IS BEING DECIDED IN THE FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO.2: - 2 4 . ISSUE NO.2 IS FORMAL IN NATURE WHICH NOW HERE REQUIRED ANY ADJUDICATION. 2 5 . IN RESULT, APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE. ITA NO.444 1 /M/201 3 : - SUDHIR B VORA 13 2 6 . THE REVENUE HAS FILED THE PRESENT A PPEAL AGAINST THE ORDER DATED 13 .03.201 3 PASSED BY THE COMMISS IONER OF INCOME TAX (APPEALS) - 39 MUMBAI, [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE ASSESSMENT YEAR 1998 - 99 . 2 7 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS: - 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE POOJA INDUSTRIAL CORPORATION IS OPERATED BY SHRI NARESH B VORA AND THE SAID CONCERN IS NO WAY CONNECTED WITH THE ASSESSEE, THEREBY DELETING THE ADDITION OF RS. 55,130/ - @ 4% RS.13,78,260/ - 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE POOJA INDUSTRIAL CORPORATION IS OPERATED BY SHRI NARESH B VORA AND THE SAID CONCERN IS NO WAY CONNECTED WITH THE ASSESSEE, THER EBY DELETING THE ADDITION OF RS.3,46,249/ - MADE BY THE AO U/S 68 OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN HOLDING THAT THE ENTRIES IN IMPOUNDED ITEM NO., A - 15 PERTAINS TO SALE OF CHEMICALS SBPS AND NOT SALE OF NAPTHA UNLIKE HELD BY THE AO. 4. THE APPELLANT CRAVES TO LEAVE TO ADD, TO AMEND AND/ OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 5. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUNDS STATED ABOVE, THE ORDER OF THE CIT(A) - 39, MUMBAI MAY BE S ET ASIDE AND THAT OF THE AO RESTORED. 2 8 . THE FACTS OF THE CASE ARE THAT QUITE SIMILAR TO THE FACTS OF THE CASE A S MENTIONED IN THE APPEAL OF THE ASSESSEE BEARING ITA . NO. 4621 /M/201 3 HOWEVER, THE FIGURE IS DIFFERENT. ISSUE NO. 1 : - SUDHIR B VORA 14 2 9 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE DELETION OF THE ADDITION OF RS.55,130/ - @ OF 4% OF RS.13,78,260/ - BY GIVING THE FINDING THAT THE POOJA INDUSTRIAL CORPORATION WAS OPERATED BY SHRI NARESH B VORA . THE FINDING OF THE CIT(A) ON THIS IS SUE IS HER EBY MENTIONED BELOW.: I HAVE CONSIDERED THE MATTER. THERE IS NO DISPUTE, AS EVIDENCED BY FACTS ON RECORD, THAT M/S. POOJA INDUSTRIAL CORPORATION IS THE PROPRIETARY CONCERN OF THE APPELLANTS BROTHER SHRI NITIN B .VORA. BESIDES, WHILE CONSIDERING THE APPEAL IN RESPECT OF SHRI SUDHIR VORA FOR THE CAPTIONED YEAR, IT HAS BEEN OBSERVED THAT THE CASH DEPOSITS MADE TO THE VARIOUS ACCOUNTS ARE OUT OF VARIOUS AMOUNTS RECEIVED BY SHRI NARESH B. VORA AS MENTIONED IN THE ROUGH CASH BOOK. SINCE, ALL THE ENTRIES HA VE BEEN CONSIDERED IN THE HANDS OF NARESH VORA, AND M/S. POOJA INDUSTRIAL CORPORATION IS NO WAY CONNECTED WITH THE APPELLANT THE ADDITION OF RS.55,130/ - IS DIRECTED TO BE DELETED. 30 . ON APPRAI SAL OF THE ABOVE MENTIONED FINDING , WE FIND THAT THE CIT(A) HA S GONE THROUGH THE ENTRIES AND RECORD OF THE BOOKS OF ACCOUNT AND CAME TO THE CONCLUSION THAT THE POOJA INDUSTRIAL CORPORATION WAS THE PROPRIETARY CONCERN OF THE APPELLANT BROTHER SHRI NARESH B VORA AND THE ENTRIES ARE REQUIRED TO BE CONSIDERED IN HAND OF THE NARESH B VORA . POOJA INDUSTRIAL CORPORATION WAS NOWHERE FOUND CONNECTED WITH THE ASSESSEE, T HEREFORE, THE AMOUNT WAS DELETED . N O MATERIAL OF ANY KIND WAS PRODUCED BEFORE US TO WHICH IT CAN BE ASSUMED THAT THE POOJA INDUSTRIAL CORPORATION WAS BELONGING TO THE ASSESSEE. THEREFORE , THE SAID CIRCUMSTANCES THE CIT(A) HAS RIGHTLY SUDHIR B VORA 15 DELETED THE ADDITION . W E CONFIRM THE FINDING OF THE CIT(A) IN THIS REGARD. ISSUE NO. 2: - 31 . ISSUE NO. 2 IS IN CONNECTION WITH THE DELETION OF THE ADDITION OF RS.3,46,249/ - U/S 68 OF THE ACT. THIS AMOUNT WAS ALSO BELONGING TO POOJA INDUSTRIAL CORPORATION WHICH WAS THE PROPRIETARY CONCERN OF APPELLANT BROTHER SHRI NARESH B VORA. THE SAID AMOUNT HAS ALREADY BEEN ASSESSED IN THE HAND SHRI NARESH B VORA, T HEREFORE, IS NOT REQUIRED HAS BEEN ASSESSED IN FAVOUR OF THE ASSESSEE HOWEVER, IN THIS REGARD THE FINDING IS HEREBY REPRODUCED BELOW.: - I HAVE CONSIDERED THE MATTER. IT HAS ALREADY BEEN HELD AS A F ACT THAT THE ASSESSEE/APPELLANT IS IN NO WAY CONNECTED WITH POOJA INDUSTRIES CORPORATION. THAT BEING SO HE IS NOT LIABLE TO EXPLAIN THE CASH DEPOSITS FOUND THEREIN. FURTHER, AS HELD IN THE CASE OF SHRI SUDHIR VORA, FOR THE CAPTIONED YEAR, THE APPELLANT AND HIS BROTHER WERE PROVIDING HAWALA ENTRIES IN RETURN FOR COMMISSION AT A PRE - DETERMINED RATE. HENCE WHAT IS ASSESSABLE IS ONLY THE COMMISSION FROM THE SAID DEPOSITS. AS A MATTER OF RECORD, IN THE ASSESSMENT OF SHRI NARESH VORA, THE TOTAL DEPOSITS CONSIDERE D IN H IS HANDS IS RS.20,79,04,537/ - ON WHICH COMMISSION INCOME HAS ALREADY BEEN ASSESSED IN HIS HANDS. FOR THE SAID REASON, THE AO ERRED IN BRINGING TO TAX SUM OF RS.3,46,429/ - U/S 68 OF THE ACT IN THE HANDS OF THE APPELLANT. THE ADDITION IS DELETED. 32 . NO DISTINGUISHABLE OF MATERIAL HAS BEEN PRODUCED BEFORE US TO DEVIATE THE FINDING OF THE CIT(A) ON THIS ISSUE BEING ALL THE AMOUNT HAS BEEN ASSESSED IN FAVOUR OF THE SH RI NARESH B VORA. NO MATERIAL OF ANY KIND HAS BEEN PRODUCED BEFORE US TO WHICH IT CAN B E ASSUMED THAT THE SAID AMOUNT IN QUESTI ON IS BELONGING TO THE ASSESSEE, THEREFORE, IS SUDHIR B VORA 16 LIABLE TO BE ADDED U/S 68 OF THE I.T. ACT IN THE INCOME OF THE ASSESSEE. WE FOUND NO GROUND TO INTERFERE WITH THE FINDING OF THE CIT(A) ON THIS ISSUE. HENCE, WE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. ISSUE NO. 3: - 33 . UNDER THIS ISSUE THE REVENUE HAS CHALLENGED THE FINDING OF THE CIT(A) IN WHICH THE CIT(A) HAS HELD THAT THE ENTRIES IN IMPOUNDED ITEM NO., A - 15 PERTAINS TO SALE OF CHEMICALS SBPS AND NOT THE SALE OF NAPTHA AS HELD BY ASSESSING OFFICER. BEFORE GOING FURTHER , IT IS NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON THIS ISSUE WHICH IS HEREBY REPRODUCED BEL OW. : - I HAVE GIVEN THOUGHTFUL CONSIDERATION TO THE MATTER. THE INVESTIGATION BY THE DEPARTMENT AND POST SEARCH ENQUIRIES CONDUCTED INTO THE BUSINESS ACTIVITIES OF THE APPELLANT REVEALED THAT THE MAIN BUSINESS ACTIVITY OF THE APPELLANT WAS TO SUPPLY HAWA LA BILLS ON WHICH COMMISSION WAS CHARGED AT A PREDETERMINED RATE. BESIDES, HE CARRIED ON HIS OWN CHEMICAL BUSINESS I.E. SBPS. ON THE OTHER HAND THE AO HAS TAKEN A VIEW THAT HE CANNOT AGREE WITH THE EARLIER ORDER OF CIT(A) DATED 13.07.2004 WHEREIN IT WAS HE LD THAT THE APPELLANT COULD NOT HAVE DEALTH WITH NAPTHA SWITHOUT HAVING ANY LICENSE, STATING THAT EVEN WITHOUT A LICENSE NOTHING PREVENTED THE APPELLANT FROM BUYING AND SELLING NAPTHA. FURTHER THE AO HAS PROCEEDED TO STATE THAT THE APPELLANT HAVING SEEN HU GE MARGINS IN NAPTHTHA ADULTERATION HAS PURCHASED A FEW TANKERS HIMSELF AND TRADED IN NAPHTHA TO EARN PROFIT. FURTHER, IT IS ON RECORD THAT EARLIER NO EXPLANATION OR SUBMISSION WAS GIVEN BY THE ASSESSEE FOR THE REASON THAT HE WAS IN JUDICIAL CUSTODY AND HE NCE NOT ABLE TO APPEAR BEFORE THE DEPARTMENTAL AUTHORITIES. ON AN APPRECIATION OF THE ENTRIES FACTS AND CIRCUMSTANCES I AM UNABLE TO SUSTAIN THE FINDINGS/VIEW OF THE AO THAT INSPITE OF NOT HAVING A LICENSE NOTHING PREVENTED THE APPELLANT FROM BUYING AND SE LLING NAPHTHA. NAPHTHA SUDHIR B VORA 17 BEING A CONTROLLED COMMODITY CAN BE ACCESSED ONLY BY THE NAPHTHA LICENSE HOLDER, IT CAN BE OBSERVED THAT IT IS ONLY ON THE BASIS OF CONJECTURE THE A O HAS TAKEN A VIEW THAT THE APPELLANT HAS DEALT IN NAPHTHA. ON THE OTHER HAND, THE EN TIRE EVIDENCE UNEARTHED IN THE COURSE OF SEARCH/INVESTIGATION REVEALED THAT THE ROLE OF THE APPELLANT WAS THATOF A HAWALA PROVIDER I.E. TO ISSUE FICTITIOUS BILLS TO THE NAPHTHA QUOTA HOLDERS. AN ADDITION CANNOT BE SUSTAINED ON THE PREMISE THAT HAVING SEEN HUGE PROFIT MARGINS, THE APPELLANT HIMSELF WOULD HAVE DEALT WITH THE SAME COMMODITY, WITHOUT ANY EVIDENCE ON RECORD. THEREFORE, THE ADDITION OF RS.7,99,680/ - IS TO BE DELETED AND IS ACCORDINGLY DELETED. HOWEVER, BASED ON THE WORKING AS PROVIDED BY THE APPE LLANT AND AS EXTRACTED ABOVE, THE AO MAY VERIFY WHETHER THE PROFIT OF RS.4,44/ - PER TANKER FROM THE BUSINESS OF SPBS HAS BEEN ASSESSED TO TAX . 34 . IN VIEW OF THE SAID FINDING OF THE CIT(A) WE NOTICED THAT CIT(A) HAS ALREADY DIRECTED THE AO TO VERIFY THE PROFIT OF RS .4.440/ - PER TANKER FROM THE BUSINESS OF SPBS WHICH HAS BEEN ASSESSED TO TAX . T HE FINDING OF THE CIT(A) IS ON THE BASIS OF THE RECORD AND RELEVANT MATERIAL WAS AVAILABLE WITH THEM. THERE IS NO NEED TO DISCUSS THE SAME BEING THE CIT(A) HAS ALREAD Y DISCUSSED THE MATTER AT LENGTH ABOVE .VERIFICATION IS YET TO BE DONE BY THE AO . NOTHING DISTINGUISHABLE HAS PRODUCED BEFORE US TO DEVIATE THE FINDING OF THE CIT(A) ON THIS ISSUE. THEREFORE, WE DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE 3 5 . IN THE RESULT , THE APPEALS FILED BY THE ASSESSEE ARE HEREBY ALLOWED AND APPEAL FILED BY THE REVENUE IS HERBY ORDERED TO BE DISMISSED . ORDER P RONOUNCED IN THE OPEN COURT ON 29.08. 2017 . SUDHIR B VORA 18 SD/ - SD/ - ( R.C. SHARMA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 29.08. 2017 V.P. SINGH / 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. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI