SHRI DINESH CHOUDHARY, BHAYANDER -EAST, THANE V. DCIT, CENTRAL CIRCLE-1(1), , MUMBAI

ITA 5183/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 2013 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2008-2009
• Appeal Filed On: 07-08-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANOOP
• Keywords: Search and seizure; Accommodation entries; Set aside
• Section: 153A; 250; 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI SHRI SHAMIM YAHYA (AM) & SHRI AMARJIT SINGH (JM) I.T.A. NO. 5183/MUM/2019 (ASSESSMENT YEAR 2008-09) I.T.A. NO. 5184/MUM/2019 (ASSESSMENT YEAR 2009-10 ) I.T.A. NO. 5185/MUM/2019 (ASSESSMENT YEAR 2010-11 ) I.T.A. NO. 5186/MUM/2019 (ASSESSMENT YEAR 2011-12 ) I.T.A. NO. 5187/MUM/2019 (ASSESSMENT YEAR 2012-13 ) I.T.A. NO. 5188/MUM/2019 (ASSESSMENT YEAR 2013-14 ) I.T.A. NO. 5189/MUM/2019 (ASSESSMENT YEAR 2014-15 ) SHRI DINESH CHOUDHARY A-304, MEW OSTWAL ONYX JESAL PARK, BHAYANDER EAST, THANE, MAHARASHTRA PINECODE 400 092. PAN : AKFPC3048P VS. DCIT, CC-1(1) ROOM NO. 903 9 TH FLOOR PRATISHTHA BHAVAN OLD CGO BUILDING M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI PRAKASH JHUNJHUNWALA DEPARTMENT BY SHRI ANOOP DATE OF HEARING 18 .0 5 .2021 DATE OF PRONOUNCEMENT 09.06.2021 O R D E R PER SHAMIM YAHYA (AM) :- THESE ARE APPEALS BY THE ASSESSEE AGAINST A COMMON ORDER OF LEARNED CIT(A) FOR THE CONCERNED ASSESSMENT YEARS. SINCE TH E ISSUES ARE COMMON AND CONNECTED AND THE APPEALS HAVE BEEN HEARD TOGETHER THESE ARE BEING CONSOLIDATED AND DISPOSED OFF BY THIS COMMON ORDER. 2. SINCE COMMON GROUNDS ARE RAISED FOR THE SAKE OF REFERENCE WE ARE REFERRING TO THE GROUNDS OF APPEAL FOR ASSESSMENT Y EAR 2008-09 :- THE APPELLANT HAS PREFERRED AN APPEAL AGAINST THE ORD ER DATED 30.04.2019 PASSED BY ID. CIT (A) U/S. 250 OF THE INCOME TAX AC T, IN PURSUANCE OF APPEAL FILED AGAINST ASSESSMENT ORDER DATED 26.03.2016 PASSE D U/S. 153A R.W.S. 143 (3) OF THE INCOME TAX ACT, FOLLOWING ARE THE GROUN DS OF APPEAL WITHOUT PREJUDICE TO ONE ANOTHER SHRI DINESH CHOUDHARY 2 I. THE LEARNED COMMISSIONER OF INCOME TAX ( APPEAL) HAS ERRED IN ADDING GENUINE UNSECURED LOAN TAKEN AMOUNTING TO RS. 21,10, 000/- AS UNEXPLAINED INCOME AND ADDED IN THE INCOME OF THE APPELLANT WITHO UT APPRECIATING THE SUBMISSION/DOCUMENTARY EVIDENCES PROVIDED BY THE APP ELLANT. II. THE LEARNED COMMISSIONER OF INCOME TAX (APPE AL) HAS ERRED IN IMPUGNED ADDITION RS. 2,00,000/- ALLEGED AS COMMISSI ON INCOME OF THE APPELLANT WITHOUT CONSIDERING THE SUBMISSION/EVIDENCES PROVIDED BY THE APPELLANT. III. THE APPELLANT CRAVES TO ADD, AMEND OR ALTE R THE GROUNDS OF APPEAL AT THE TIME OF OR BEFORE THE HEARING OF APPEAL. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A P ROPRIETOR OF M/S. PLY PLAZA AND IS ENGAGED IN TRADING OF PLY. THE ASSESSMENT WA S FRAMED PURSUANT TO SEARCH AND SEIZURE ACTION IN THE CASE OF PRAVEEN JA IN GROUP. IN THE ASSESSMENT ORDER ASSESSING OFFICER NOTED THAT ASSESSEE WAS IN RECEIPT OF UNSECURED LOAN AS ACCOMMODATION ENTRY FROM THE CONCERNS BELONGING TO THE PRAVEEN JAIN GROUP COMPANY AMOUNTING TO RS. 21.10 LAKHS. THE ASSESSING OFFICER ELABORATELY REFERRED TO THE SEARCH ACTION IN THE CASE OF PRAVEE N JAIN GROUP. HE REJECTED THE ASSESSEE'S CONTENTION THAT ASSESSEE HAS SUPPLIED TH E NECESSARY EVIDENCE IN SUPPORT OF THE LOAN TAKEN ON THE GROUND THAT IT HA S BEEN ACCEPTED IN THE PRAVEEN JAIN GROUP OF COMPANY, THAT THESE ARE ACCOM MODATION ENTRIES. 4. FURTHERMORE THE ASSESSING OFFICER ALSO NOTED THA T ASSESSEE WAS ENGAGING INTO ACCOMMODATION ENTRY TRANSACTION WITH PRAVEEN J AIN GROUP. HENCE HE ESTIMATED A COMMISSION OF RS. 2 LAKHS ON THE BASIS OF THE CLAIM THAT ASSESSEE WAS ENGAGING INTO ACCOMMODATION ENTRY BUSINESS. 5. UPON ASSESSEE'S APPEAL LEARNED CIT(A) CONFIRMED THE ORDER OF ASSESSING OFFICER. HE ALSO REFERRED TO THE SEARCH AND SEIZURE ACTION IN THE CASE OF PRAVEEN JAIN GROUP OF COMPANIES. 6. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BE FORE US. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ECORDS. AT THE OUTSET LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT HE I S NOT PRESSING THE ADDITION ON ACCOUNT OF COMMISSION ON BOGUS ACCOMMODATION ENT RY. THEREAFTER LEARNED SHRI DINESH CHOUDHARY 3 COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ADDITION ON ACCOUNT OF UNSECURED LOAN IS NOT SUSTAINABLE ON THE TOUCHSTONE OF HONOUR ABLE BOMBAY HIGH COURT DECISION IN THE CASE OF PCIT VS. ALAG SECURITIES PV T. LTD. (117 TAXMAN.COM 292). HE SUBMITTED THAT IN THIS CASE IT WAS HELD TH AT ONCE IT IS ACCEPTED THAT ASSESSEE IS ENGAGING INTO ACCOMMODATION ENTRY BUSIN ESS ONLY THE COMMISSION IN THE SAID BUSINESS IS TO BE ADDED IN THE HANDS OF THE ASSESSEE. HE CLAIMED THAT ONCE ASSESSING OFFICER ADDED COMMISSION ON ACC OUNT OF BOGUS ENTRY OPERATION THE ADDITION OF UNSECURED LOAN ON ACCOUNT OF BOGUS ACCOMMODATION ENTRY IS NOT SUSTAINABLE. HENCE, LEARNED COUNSEL OF THE ASSESSEE SUBMITTED THAT ON THE TOUCHSTONE OF AFORESAID BOMBAY HIGH COU RT DECISION THE ADDITION ON ACCOUNT OF UNSECURED LOAN IS NOT SUSTAINABLE. 8. PER CONTRA LEARNED DEPARTMENTAL REPRESENTATIVE R ELIED UPON THE ORDERS OF AUTHORITIES. WE HAVE HEARD BOTH THE PARTIES AND PER USED THE RECORDS. WE NOTE THAT ASSESSING OFFICER HAS GIVEN THE FINDING THAT A SSESSEE IS ENGAGING INTO BOGUS ACCOMMODATION ENTRY BUSINESS IN COLLABORATION WITH PRAVEEN JAIN GROUP. HENCE HE HAS ADDED COMMISSION TO THE INCOME OF THE ASSESSEE. ONCE ASSESSEE HAS BEEN ACCEPTED AS ENGAGED INTO GIVING B OGUS ACCOMMODATION ENTRIES AND COMMISSION ON THAT COUNT HAS BEEN ADDED FURTHER ADDITION OF BOGUS UNSECURED LOAN IS NOT SUSTAINABLE ON THE TOUC HSTONE OF HONOURABLE BOMBAY HIGH COURT DECISION IN THE CASE OF ALAG SECU RITIES PVT. LTD. (SUPRA). IN THIS CASE HONOURABLE BOMBAY HIGH COURT HAS HELD THA T (HEAD NOTE ONLY) SECTION 68 OF THE INCOME-TAX ACT, 1961-CASH CREDITS (AC COMMODATION ENTRIES) - ASSESSMENT YEAR 2003-04 - ASSESSEE WAS E NGAGED IN PROVIDING ACCOMMODATION ENTRIES TO ITS CUSTOMERS - IT RECEIVED CAS H AMOUNT FROM CUSTOMERS/BENEFICIARIES AND ISSUED THEM CHEQUES OF S LIGHTLY LOWER AMOUNT AFTER CHARGING ITS COMMISSION - IN COURSE OF ASSESSM ENT, ASSESSING OFFICER BROUGHT ENTIRE AMOUNT OF CASH RECEIVED FROM CUSTOMERS TO TAX IN ASSESSEE'S HANDS - TRIBUNAL, HOWEVER, HELD THAT ONLY AMOUNT OF C OMMISSION RECEIVED BY ASSESSEE FROM ITS CUSTOMERS WAS LIABLE TO BE ADDED TO A SSESSEE'S TAXABLE INCOME - WHETHER, ON FACTS, SINCE CASH AMOUNT DEPOSITE D BY CUSTOMERS/BENEFICIARIES HAD BEEN ACCOUNTED FOR IN AS SESSMENT ORDERS OF THOSE BENEFICIARIES, QUESTION OF ADDING SUCH CASH CR EDITS TO INCOME OF ASSESSEE DID NOT ARISE PARTICULARLY WHEN ASSESSEE W AS ONLY CONCERNED WITH COMMISSION EARNED ON PROVIDING ACCOMMODATION ENTRIES TO ITS CUSTOMERS - SHRI DINESH CHOUDHARY 4 HELD, YES -WHETHER, THEREFORE, IMPUGNED ORDER PASSED BY TRIBUNAL DID NOT REQUIRE ANY INTERFERENCE - HELD, YES [PARA 20] [IN F AVOUR OF ASSESSEE] 9. ACCORDINGLY ONCE THE REVENUE ACCEPTS THE ASSESSE E IS ENGAGING INTO COMMISSION BUSINESS ON ACCOUNT OF ACCOMMODATION ENT RIES AND ADDITION IS DONE FOR BROKERAGE/COMMISSION OF SUCH BUSINESS, THE ADDITION ON ACCOUNT OF ACCOMMODATION ENTRY UNSECURED LOAN IS NOT SUSTAINAB LE ON THE BASIS OF AFORESAID BOMBAY HIGH COURT DECISION. APART FROM TH E ABOVE WE NOTE THAT IN THE ADDITION ON ACCOUNT OF UNSECURED LOAN THE ASSES SING OFFICER HAS NOT MADE ANY INDEPENDENT INQUIRY OF HIS OWN. HE HAS CUT AND PASTE SEARCH ACTION IN PRAVEEN JAIN GROUP ONLY. IN THESE CIRCUMSTANCES WIT HOUT ANY INDEPENDENT ENQUIRY BY THE ASSESSING OFFICER THE ADDITION IS NO T SUSTAINABLE ON THIS COUNT ALSO. 10. ACCORDINGLY IN THE BACKGROUND OF AFORESAID DISC USSION AND PRECEDENT WE SET ASIDE THE ORDER OF THE AUTHORITIES BELOW AND DE LETE THE ADDITION OF UNSECURED LOAN. OUR AFORESAID ADJUDICATION ON ACCOU NT OF UNSECURED LOAN APPLIES MUTATIS MUTANDIS TO ITA NO. 5186/MUM/2019 & 5187/MUM/2019 FOR A.Y. 2011-12 & 2012-13, WHEREIN IDENTICAL FACTS ARE THERE AND IDENTICAL ISSUE OF ADDITION OF UNSECURED LOAN IS THERE. 11. AS THE ASSESSEE HAS NOT CONTESTED THE ADDITION ON ACCOUNT OF COMMISSION ON BOGUS ACCOMMODATION ENTRY MADE BY THE ASSESSING OFFICER, WE REJECT THE AFORESAID GROUND RAISED BY THE ASSESSEE AS NOT PRESSED IN THE APPEALS. 12. FOR A.Y. 2014-15 ONE MORE GROUND RELATING TO AD DITION ON ACCOUNT OF UNEXPLAINED JEWELLERY FOUND IN SEARCH AMOUNTING TO RS. 1,28,510/- IS RAISED. THE ADDITION WAS MADE BY THE ASSESSING OFFICER AND CONFIRMED BY LEARNED CIT(A) THAT ASSESSEE COULD NOT EXPLAIN THE SOURCE T HEREOF. SHRI DINESH CHOUDHARY 5 13. BEFORE US ALSO NO SUCH EXPLANATION OF THE SOURC E WAS SUBMITTED. HENCE, THIS ISSUE RAISED IS REJECTED. 14. ACCORDINGLY ASSESSEE'S APPEAL IN ITA NOS. 5183/ MUM/2019, 5186/MUM/2019 & 5187/MUM/2019 ARE PARTLY ALLOWED AN D OTHER APPEALS ARE DISMISSED BY NOT PRESSED. PRONOUNCED IN THE OPEN COURT ON 9.6.2021. SD/- SD/- (AMARJIT SINGH) (SHAMIM Y AHYA) JUDICIAL MEMBER ACCOUNTAN T MEMBER MUMBAI; DATED : 09/06/2021 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// ( ASSISTANT REGISTRAR) PS ITAT, MUMBAI