INCOME TAX OFFICER-27(2)(3), MUMBAI V. MURUGAN K. NAIKAR, MUMBAI

ITA 5761/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0656 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 11-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUM C O NO MUM MUMBAI AYS
• Keywords: Business income; Accommodation entries; Retraction
• Section: 201; 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI RAM LAL NEGI, JUDICIAL MEMBER ITA NO. AY. APPELLANT RESPONDENT 5 76 0 /MUM/17 2009 - 10 THE INCOME TAX OFFICER - 2 7 (2)( 3 ), MUMBAI SHRI MURUGAN K. NAIKAR, FLAT NO.601, A - WING, VANAMANLI BUILDING, OPP: DUKES FACTORY, WT PATIL MARG, CHEMBUR, MUMBAI [PAN : A C A P N8520C ] 5 7 61 /MUM/17 201 0 - 1 1 C . O.NO. AY. APPELLANT RESPONDENT 2 7 4/MUM/201 7 (ARISING OUT OF ITA NO. 5 76 1 /M/17) 20 1 0 - 1 1 SHRI MURUGAN K. NAIKAR, FLAT NO.601, A - WING, VANAMANLI BUILDING, OPP: DUKES FACTORY, WT PATIL MARG, CHEMBUR, MUMBAI [PAN : ACAPN8520C] THE INCOME TAX OFFICER - 27(2)(3), MUMBAI REVENUE B Y : SHRI VI KAS K R. AGARWAL & SHRI AMIT PRATAP SINGH ASSESSEE B Y : SHRI VIJAY MEHTA & SHRI GOVIND JHAVERI DATE OF HEARING : 13 - 0 9 - 201 9 DATE OF PRONOUNCEMENT : 17 - 0 9 - 201 9 O R D E R P ER R AJESH KUMAR , A . M: TH ESE APPEAL S FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER (S) OF THE COMMISSIONER OF INCOME TAX(APPEALS) - 25 , ITA NO S . 5 7 6 0 & 576 1 /MUM/ 20 1 7 C.O.NO.2 7 4 /MUM/2017 : 2 : MUMBAI FOR THE AYS.2009 - 10 AND 201 0 - 1 1 . ASSESSEE FILED CROSS - OBJECTION AGAINST THE APPEAL OF REVENUE FOR THE AY. 20 1 0 - 1 1 . 2. THE MAIN ISSUE IN THESE APPEALS OF REVENUE IS THAT THE ACTION OF THE LD.CIT(A) IN DELETING THE ADDITION IS BAD IN LAW , ON ACCOUNT OF BOGUS UN - SECURED LOAN AND ON ACCOUNT OF INTEREST PAID ON SAID LOANS, WHEN IT IS ESTABLISHED THAT M/S. MERIDIAN GEMS, WHICH IS THE LOAN GIVING ENTITY, IS A DUMMY CONCERN, AS ADMITTED BY SHRI BHANARLAL JAIN IN HIS SWORN STATEMENT. 3. BRI EF FACTS OF THE CASE IN AY. 2009 - 10 ARE THAT, ASSESSEE, AN INDIVIDUAL, EARNING INCOME UNDER THE HEAD HOUSE PROPERTY, BUSINESS INCOME AND INCOME FROM OTHER SOURCES. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE FILED HIS RETURN OF INCOME ON 31 - 03 - 2011 DECLARING INCOME OF RS. 1,48,490/ - . ON THE BASIS OF THE INFORMATION REC EIVED FROM DIT(INV.) - II, MUMBAI THE AO CAME TO THE CONCLUSION THAT THE ASSESSEE IS BENEFICIARY OF ACCOMMODATION ENTRY OF RS.68,50,000/ - TAKEN FROM MERIDIAN GEMS, ONE OF THE BOGUS CONCERNS OF BANWARLAL JAIN GROUP O N WHICH A SEARCH WAS CONDUCTED U/S 132 OF THE ACT. THEREAFTER THE CASE WAS RE - OPE NE D BY ISSUING NOTICE U/S.148 OF THE ACT DT. 14 - 03 - 2016 AND FINALLY THE RE - ASSESSMENT U/S.143(3) R.W.S.147 OF THE ACT WAS COMPLETED ON 15 - 12 - 2016 DETERMINING THE TOTAL INCOME AT RS.73,00,280/ - . 3.1. AGGRIEVED WITH THE SAID ORDER OF ASSESSMENT, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) . ITA NO S . 5 7 6 0 & 576 1 /MUM/ 20 1 7 C.O.NO.2 7 4 /MUM/2017 : 3 : 3.2. BEFORE THE CIT(A), ASSESSEE RAIS ED VARIOUS GROUNDS OF APPEAL . LD.CIT(A) AFTER TAKING INTO ACCOUNT THE SUBMISSIONS OF THE ASSESSEE PARTLY ALLOWED THE APPEAL BY DELETING THE ADDITION OF RS. 68,50,000/ - ON ACCOUNT OF UNSECURED LOANS AND INTEREST OF RS. 3,01,791/ - THEREON WHILE THE RE - OPENING OF ASSESSMENT WAS AFFIRMED . 3. 3 . AGGRIEVED WITH THE ORDER OF LD.CIT(A), NOW THE REVENUE IS IN APPEAL BEFORE US . 4. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE OBSERVE THAT THE IDENTICAL ISSUE HAS BEEN DECIDED BY THE CO - ORDINATE BENCH OF THE TRIBUNAL AGAINST THE REVENUE AND IN FAVOUR OF ASSESSEE IN ASSESSEE FATHER CASE IN ITA NO.1709/MUM/2017 AY . 2009 - 10 VIDE ORDER DT . 26 - 12 - 2018 . WE OBSERVE THAT IN THE SAID CASE ALSO THE PARTY WHO GAVE THE LOAN WAS SAME. THE OPERATIVE PORTION OF THE SAID ORDER IS REPRODUCED HEREUNDER, FOR READY REFERENCE: AFTER HAVING GONE THROUGH THE FACTS OF THE PRESENT CASE AS WELL AS ORDERS PASSED BY THE REVENUE AUTHORITIES, WE FIND FROM THE RECORDS THAT ASSESSMENT IN THE PRESENT CASE WAS MADE BY THE AO ON THE BASIS OF STATEMENTS OF SHRI BHANWARLAL JAIN AND OTHERS BY HO LDING THAT PURCHASES MADE FROM M/S MERIDIAN GEMS ARE JUST ACCOMMODATION ENTRIES IN THE NAME OF BOGUS UNSECURED LOANS. THE LD. CIT(A) AFTER APPRECIATING THE FACT OF THE PRESENT CASE HAD RIGHTLY POINTED OUT THAT NO ENQUIRY WAS CARRIED OUT/CONDUCTED BY THE AO WHICH WOULD BRING IN EVIDENCES AGAINST THE IDENTITY AND CREDITWORTHINESS OF THE LOAN CREDITORS AND GENUINENESS OF THE LOAN TRANSACTIONS. LD.CIT(A) ALSO APPRECIATED AND CONSIDERED THE DOCUMENTS PLACED ON RECORD TO ESTABLISH THE GENUINENSS OF LOAN I.E A) A COPY OF LOAN CONFIRMATION FROM M/S MERIDIAN GEMS FOR THE YEAR ENDED 31.03.2009, 31.03.2010, 31.03,2011, AND 31.03.2012, B.) RETURN OF INCOME FOR THE YEAR ENDED 31.03.2009, 31.03.2010, 31.03.2011,AND 31.03.2012, C.) THEIR BANK STATEMENT CONFIRMING THE TRANS ACTION, D.) THEIR AFFIDAVIT CONFIRMING THE TRANSACTION IS ENCLOSED, E.) THE BANK STATEMENT OF THE APPELLANT FOR THE RELEVANT PERIOD AND F) ITA NO S . 5 7 6 0 & 576 1 /MUM/ 20 1 7 C.O.NO.2 7 4 /MUM/2017 : 4 : THE RETRACTION STATEMENT DATED 15.05.2014 OF MR. BHAWARLAL M. JAIN. IT WAS ALSO APPRECIATED BY LD. CIT(A) THAT THE L OANS WHICH WERE REPAID IN SUBSEQUENT YEARS AND THE ASSESSEE HAD ALSO PLACED ON RECORD THE COPY OF ORDER OF LD. CIT(A) FOR AY 2008 - 09 WHEREIN IDENTICAL ADDITIONS WERE DELETED BY LD. CIT(A) AND THE SAID APPEAL WAS ALSO CHALLENGED BY THE REVENUE BEFORE ITAT, BUT THE APPEAL OF THE REVENUE WAS DISMISSED BY ITAT. MOREOVER, NO NEW FACTS OR CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US IN ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD. CIT(A). THEREFORE, WE SEE NO REASONS TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS RECORDED BY THE LD.CIT(A). HENCE, WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WELL REASONED. RESULTANTLY, THIS GROUND RAISED BY THE REVENUE STANDS DISMISSED. GROUND NO. 2 & 3 7. THESE GROUNDS RAISED BY THE REVENUE ARE GENERAL IN NATURE, THUS REQUIRES NO SPECIFIC ADJUDICATION. NOW WE TAKE UP C.O. NO. 206/MUM/2018 FILED BY ASSESSEE . 8. SINCE WE HAVE ALREADY DECIDED THE APPEAL FILED BY REVENUE IN ITA NO. 1709/MUM/2017 ON MERITS AND UPHELD THE DELETION OF ADDITIONS. THEREFORE IN VIEW OF OUR FINDINGS, IN ITA NO. 1709/MUM/2017, THE PRESENT C.O. FILED BY THE ASSESSEE BECOMES INFRUCTUOUS . 4.1. SINCE THE FACTS BEFORE US ARE SIMILAR TO ONE AS DECIDED BY THE CO - ORDINATE BENCH OF THE TRIBUNAL SUPRA , WE, THEREFORE, RESPECTFULLY FOLLOWING THE SAME DISMISS TH IS GROUND , RAISED BY REVENUE. 4.2. GROUND NOS.2 & 3 RAISED BY REVENUE ARE GENERAL IN NATURE, HENCE, NEEDS NO ADJUDICATION. 5 . IN T HE RESULT, TH E APPEAL OF REVENUE FOR THE AY.2009 - 10 IS DISMISSED. ITA NO S . 5 7 6 0 & 576 1 /MUM/ 20 1 7 C.O.NO.2 7 4 /MUM/2017 : 5 : AY.2010 - 11 : 6. S INCE THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO ONE AS DECIDED BY US FOR THE AY.2009 - 10 (SUPRA) AND T HEREFORE OUR FINDINGS IN THE SAID APPEAL, MUTATIS MUTANDIS , WOULD APPLY TO THIS APPEAL AS WELL. HENCE, THIS APPEAL OF REVENUE IS DISMISS ED. 7. AS FAR AS THE CROSS - OBJECTION RAISED BY ASSESSEE IS CONCERNED, SINCE THE LD.COUNSEL FOR THE ASSESSEE HAS NOT PRESSED THE SAME BEFORE THE BENCH , THE SAME IS DISMISSED , AS NOT PRESSED. ORDER PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER , 2019 SD/ - SD/ - (RAM LAL NEGI) (RAJESH KUMAR) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI; / DATED : 17 - 09 - 2019 TNMM ITA NO S . 5 7 6 0 & 576 1 /MUM/ 20 1 7 C.O.NO.2 7 4 /MUM/2017 : 6 : / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) , MUMBAI 4. / CIT , MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, //TRUE COPY// / (DY./ASST. REGISTRAR) , / ITAT, MUMBAI