ITO 2(3)(2), MUMBAI V. SHAH PRATAP INDUSTRIES P.LTD, MUMBAI

ITA 5349/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4047 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2011-2012
• Appeal Filed On: 16-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUSHIL KUMAR PODDAR LD
• Assessee Lawyers: SULABH PADSHALD
• Keywords: Bogus purchase; Unexplained cash credit; Opportunity of being heard; Set aside

Judgement Text

ITA NO.5349/MUM/2017 SHAH PRATAP INDUSTRIES PVT. LTD. ASSESSMENT YEAR: 2011-12 1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , BEFORE HONBLE SHRI C.N. PRASAD, JM AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM ./ I.T.A. NO.5349/MUM/2017 ( / ASSESSMENT YEAR: 2011-12) INCOME TAX OFFICER - 2(3)(2) ROOMNO.581A AAYKAR BHAVAN M.K. ROAD, NEW MARINE LINES MUMBAI-400 020. / VS. M/S. SHAH PRATAP INDUSTRIES PRIVATE LIM ITED 16, GUNDECHA CHAMBERS NAGINDAS MASTER ROAD FORT, MUMBAI-400 023. ! ./ ./PAN/GIR NO. AAACS-5494-D ( !# /APPELLANT ) : ( $!# / RESPONDENT ) ASSESSEE BY : SHRI SULABH PADSHA-LD. AR REVENUE BY : SHRI SUSHIL KUMAR PODDAR LD. CIT DR / DATE OF HEARING : 22/08/2019 / DATE OF PRONOUNCEMENT : 22/08/2019 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY REVENUE FOR ASSESSMENT YEAR [IN SHORT REFERRED TO AS AY] 2011-12 CONTEST THE ORDER LD. COMMISSIO NER OF INCOME-TAX (APPEALS)-50, MUMBAI, [IN SHORT REFERRED TO AS CIT (A)], APPEAL NO. CIT(A)-50/IT-323/2013-14 DATED 19/05/2017 ON FOLLOWING GROUNDS OF APPEAL: - ITA NO.5349/MUM/2017 SHAH PRATAP INDUSTRIES PVT. LTD. ASSESSMENT YEAR: 2011-12 2 1. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE IN LAW, THE LD. CLT(A) ERRED IN DELETING THE ADDITION OF RS.3,72,52,750/- ON ACCOUN T OF TRANSACTIONS WITH ACCOMMODATION ENTRY PROVIDER. 2. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ACCEPTING THE CONTENTION OF THE ASSESSEE THAT SUMS RECEIVED FROM M/S. JIK INDUSTRIES LTD. REPRESENTS LOAN IGNORING THE FACTS THAT IT WAS A TR ANSACTION WITH ACCOMMODATION ENTRY OPERATOR AND WHO WAS A NON FILER AND REPEATEDLY FAILED TO CO MPLY TO VARIOUS NOTICES ISSUED BY THE AO.' 3. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD.CIT(A) PASSED THE ORDER DELETING THE ADDITION WITHOUT MAKING NECE SSARY ENQUIRIES WHICH WAS REQUIRED IN THIS CASE.' 4. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING THE APPEAL OF THE ASSESSEE IN RESPECT OF R ELIEF OF INTEREST UNDER SECTION 234B.' 5. 'FOR THESE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING THE DECISION OF MAY BE SET ASIDE AND THAT OF THE AO RESTORED.' 2. FACTS IN BRIEF ARE THAT THE ASSESSEE BEING RESID ENT CORPORATE ASSESSEE WAS ASSESSED FOR IMPUGNED AY U/S143(3) ON 26/03/2013 WHEREIN IT WAS SADDLED WITH CERTAIN ADDITIONS OF RS .372.52 LACS ON ACCOUNT OF TRANSACTIONS WITH BOGUS BILL PROVIDERS. PURSUANT TO SEARCH OPERATIONS ON 04/02/2011 IN THE CASE OF M/S JIK IND USTRIES LTD., CERTAIN DOCUMENTS AND COMPUTER BACK UP WAS FOUND AND SEIZED AND THE CASE OF THE ASSESSEE WAS COVERED U/S 153C OF THE ACT VIDE I SSUANCE OF NOTICE ON 30/04/2012. HOWEVER, THE SAME REMAINED UN-RESPONDED TO BY THE ASSESSEE AND NO RETURN OF INCOME WAS FILED IN THE S PECIFIED TIME. UPON PERUSAL OF DETAILS GATHERED IN THE CASE OF M/S JIK INDUSTRIES LTD., FROM THE BANK ACCOUNTS, IT WAS NOTED THAT THE ASSESSEE U NDERTOOK CERTAIN TRANSACTIONS WITH CONCERNS FLOATED BY SHRI DALIP JAYANTLAL SHAH, AN ALLEGED ACCOMMODATION / BILL PROVIDER. SHRI DALIP JAYANTLAL SHAH IN HIS STATEMENT, ADMITTED TO HAVE INDULGED IN THE ACTIVIT IES OF PROVIDING BOGUS BILLS / ACCOMMODATION BILLS. THE DETAILS OF TRANSAC TIONS CARRIED OUT BY THE ASSESSEE WITH THE BOGUS BILL ISSUING CONCERNS HAS B EEN TABULATED IN PARA-4 & 5, TABLE B & C OF THE QUANTUM ASSESSMENT O RDER. THE ITA NO.5349/MUM/2017 SHAH PRATAP INDUSTRIES PVT. LTD. ASSESSMENT YEAR: 2011-12 3 AGGREGATE CREDIT OF RS.372.52 LACS WAS BEING REFLEC TED IN ASSESSEES BANK ACCOUNT HELD WITH IDBI FOR THE YEAR UNDER CONS IDERATION. SINCE THE ASSESSEE FAILED TO ADDUCE ANY DETAILS, THE AFORESAI D AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. 3. BEFORE LEARNED FIRST APPELLATE AUTHORITY, IT WAS PLEADED THAT LD. AO MADE ADDITION ON ACCOUNT OF BOGUS PURCHASES WHEREAS NO SUCH PURCHASES WERE MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. THE ATTENTION WAS DRAWN TO THE FACT THAT THE BANK ACCOUNT, THE CREDIT OF WHICH WAS ADDED TO THE INCOME OF THE ASSESSEE, WAS FULLY DISCLOSED IN THE BALANCE SHEET. THE LD. CIT(A), AT PARA 7.4.1, OBSERVED THAT IT WAS NOT CLEAR FROM THE ASSESSMENT ORDER THA T WHETHER THE ADDITION WAS ON ACCOUNT OF BOGUS PURCHASES OR ON ACCOUNT OF UNEXPLAINED CREDIT IN THE BANK ACCOUNT. IN THE SAID BACKGROUND, LD. C IT(A) PROCEEDED TO EXAMINE THE ADDITION MADE BY LD. AO ON BOTH COUNTS. IT WAS OBSERVED THAT THE ASSESSEE HAD NOT MADE ANY CLAIM OF PURCHAS ES DURING THE YEAR AND THEREFORE, THE ADDITIONS COULD NOT HAVE BEEN ON ACCOUNT OF BOGUS PURCHASES. THE ASSESSEE SUBMITTED THAT CREDIT IN TH E BANK ACCOUNT REPRESENTED LOANS RECEIVED BY THE ASSESSEE FROM ITS PARENT COMPANY I.E. JIK INDUSTRIES LIMITED AND TO SUPPORT OF THE SAME, THE LEDGER EXTRACTS IN THE BOOKS OF THE ASSESSEE AND IN THE BOOKS OF JIK I NDUSTRIES LTD WERE PRODUCED. IT WAS SUBMITTED THAT THERE WAS NO LINK W HATSOEVER BETWEEN TRANSACTIONS OF SHRI DALIP J.SHAH AND THE BANK ACCO UNT OF THE ASSESSEE. IT WAS ALSO SUBMITTED THAT LOAN RECEIVED BY THE ASS ESSEE FROM THE PARENT COMPANY WAS DULY REFLECTED IN THE BALANCE SHEET UND ER THE HEAD OTHER CURRENT LIABILITIES. AGAINST THOSE SUBMISSIONS, LD. AOS COMMENTS WERE SOUGHT. HOWEVER, IN THE ABSENCE OF ANY RESPONSE, TH E ADDITION OF ITA NO.5349/MUM/2017 SHAH PRATAP INDUSTRIES PVT. LTD. ASSESSMENT YEAR: 2011-12 4 RS.372.52 LACS WAS DELETED. AGGRIEVED, THE REVENUE IS IN FURTHER APPEAL BEFORE US. 4. THE LD. DR HAS SUBMITTED THAT THE ASSESSEE MISER ABLY FAILED TO RESPOND DURING ASSESSMENT PROCEEDINGS AND IT WAS IN CUMBENT ON THE PART OF LD. FIRST APPELLATE AUTHORITY TO CONCLUDE T HE INVESTIGATION TO A LOGICAL CONCLUSION. ON THE OTHER HAND, LD. AR SUBMI TTED THAT THERE WAS NO TRANSACTION, WHATSOEVER, BETWEEN THE ASSESSEE AN D SHRI DALIP J.SHAH AS ALLEGED BY LD. AO AND THEREFORE, THE ADDI TIONS COULD NOT BE SUSTAINED. 5. UPON CAREFUL CONSIDERATION, THE UNDISPUTED POSIT ION THAT EMERGES IS THE FACT THAT THE ASSESSEE HAS REMAINED NEGLIGENT I N FILING THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153C AND FAILED TO ADDUCE THE REQUISITE DETAILS AS CALLED FOR BY LD. AO DURING ASSESSMENT P ROCEEDINGS. THE ONUS WAS ON ASSESSEE TO REFUTE THE ALLEGATIONS LEVE LLED BY LD. AO. HAVING FAILED TO DO SO, CERTAIN SUBMISSIONS WERE MA DE BY THE ASSESSEE BEFORE LEARNED FIRST APPELLATE AUTHORITY ASSAILING THE ADDITIONS MADE BY LD. AO. ALTHOUGH, COMMENTS WERE CALLED ON ASSESSEE S SUBMISSIONS, HOWEVER, NO RESPONSE WAS RECEIVED AGAINST THE SAME. NOTHING ON RECORD THROW ANY LIGHT AS TO WHY THE RESPONSE WAS N OT RECEIVED AND AS TO WHAT HAD TRANSPIRED BEFORE LD. AO WHEN HIS COMMENTS WERE CALLED UPKN BY LEARNED CIT(A). THEREFORE, THE FACTS DO NOT INSP IRE US TO UPHELD THE ACTION OF LD. CIT(A). BY SETTING ASIDE THE SAME, WE REMIT THE MATTER BACK TO THE FILE OF LD. AO FOR RE-CONSIDERATION OF THE M ATTER DE-NOVO WITH A DIRECTION TO THE ASSESSEE TO DEFEND THE ALLEGATIONS LEVELLED AGAINST HIM WHILE MAKING THE ADDITIONS. NEEDLESS TO ADD THAT RE ASONABLE OPPORTUNITY OF BEING HEARD SHALL BE PROVIDED TO THE ASSESSEE. ITA NO.5349/MUM/2017 SHAH PRATAP INDUSTRIES PVT. LTD. ASSESSMENT YEAR: 2011-12 5 6. IN THE RESULT, THE APPEAL STANDS ALLOWED FOR STA TISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND AUGUST, 2019. SD/- SD/- (C.N. PRASAD) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 22/08/2019 SR.PS, JAISY VARGHESE -./012.1 / COPY OF THE ORDER FORWARDED TO : 1. !# / THE APPELLANT 2. $!# / THE RESPONDENT 3. 2 ( ) / THE CIT(A) 4. 2 / CIT CONCERNED 5. 34 & 5 , 5 , / DR, ITAT, MUMBAI 6. 4678 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.