M/S. VN PAREKH SECURITIES PVT. LTD, MUMBAI V. THE ACIT CEN CIR-40, MUMBAI

ITA 5868/MUM/2007

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 5119 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 24-06-2010
• Assessment Year: 1999-2000
• Appeal Filed On: 12-09-2007
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DANIEL
• Keywords: Unexplained investment; Additional evidence
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESDIENT AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 5868/M/2007 ASSESSMENT YEAR: 1999-2000 V.N. PAREKH SECURITIES PVT. LTD., APPELLANT BHUPEN CHAMBERS, GROUND FLOOR, 9, DALAL STREET, FORT, MUMBAI 400 023. VS. ASSTT. COMMISSIONER OF INCOME-TAX, RESPONDENT CENTRAL CIRCLE 40, MUMBAI. APPELLANT BY : MR. RAJIV KHANDELWAL RESPONDENT BY : MR. DANIEL ORDER PER A.L. GEHLOT, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)-VII, MUMBAI, PASSED ON 28.08.2007 FOR THE ASSESSMENT YEAR 1999-2000. 2. THIS APPEAL IS DIRECTED AGAINST THE ORDER OF CIT (A), CENTRAL- VII, MUMBAI, PASSED ON 28.08.2007 WHEREIN THE ASSES SEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE COMMISSIONER OF INCOME TAX (APPEALS), CENTRA L VII, MUMBAI (HEREINAFTER REFERRED TO AS THE CIT(A) ) ERR ED IN UPHOLDING THE ACTION OF THE ASSESSING OFFICER IN CO NFIRMING THE ADDITION OF RS. 38,90,250/- ADDED AS UNEXPLAINED INVESTMENTS BEING THE AGGREGATE OF PURCHASE TRANSA CTIONS OF CLIENTS, IN RESPECT OF WHICH CONFIRMATIONS COULD NO T BE FURNISHED TO THE ASSESSING OFFICER. THE APPELLANTS CONTEND THAT THE SAID ADDITION IS NO T SUSTAINABLE ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, INASMUCH AS THE HONBLE TRIBUNAL IN ITS ORDER DATED 22 ND AUGUST, 2006 RESTORED THE MATTER BACK TO THE ASSESSING OFFICER TO CONSIDER CONFIRMATIONS AND OTH ER DETAILS WHICH COULD NOT BE FILED BEFORE THE COMPLETION OF A SSESSMENT AND DECIDE THE MATTER AFRESH, AND THAT THE APPELLAN TS ITA NOS. 5868/M/07 V.N. PAREKH SECURITIES LTD. 2 FURNISHED THE CIRCUMSTANTIAL EVIDENCES IN THE ABSEN CE OF CONFIRMATIONS. THE APPELLANTS FURTHER CONTEND THAT THE IMPUGNED AD DITION MADE BY THE ASSESSING OFFICER UNDER SECTION 69 OF T HE ACT IS ERRONEOUS INASMUCH AS THE PROVISIONS OF SECTION 69, IN TERMS, ARE NOT APPLICABLE. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT IN THE OR IGINAL ASSESSMENT MADE VIDE ORDER U/S 143(3), VARIOUS ADDI TIONS WERE MADE ONE OF WHICH PERTAINED TO UNEXPLAINED INVESTME NT MADE IN PURCHASES MADE BY THE ASSESSEE WHICH COULD NOT BE E XPLAINED AT THE RELEVANT POINT OF TIME. HOWEVER, THE ITAT SET A SIDE THE MATTER VIDE ITS ORDER DATED 22.08.2006 FOR RECONSIDERATION OF THE ISSUE AFTER TAKING INTO ACCOUNT THE CONFIRMATIONS AND OTH ER RELEVANT EVIDENCES. THE DIRECTIONS OF THE ITAT NOTED FROM TH E ORDER OF THE AO ARE REPRODUCED AS UNDER :- AFTER CONSIDERING THE SUBMISSIONS AND PERUSING AND RELEVANT MATERIAL ON RECORD WE ARE OF THE CONSIDERED VIEW TH AT THE MATTER SHOULD BE SENT BACK TO THE FILE OF THE ASSES SING OFFICER TO CONSIDER THE CONFIRMATIONS AND OTHER DETAILS WHI CH COULD NOT BE FILED BEFORE THE COMPLETION OF THE ASSESSMENT. T HERE IS NO DISPUTE THAT EACH CASE HAS ITS OWN FACTS. IN THE C ASE OF TRIUMPH INTERNATIONAL FINANCE INDIA LTD., THE TRIBU NAL REJECTED THE CONTENTIONS OF THE LD COUNSEL. IN THAT CASE IT HAS BEEN OBSERVED THE TRIBUNAL THAT AMPLE OPPORTUNITIES WERE GRANTED BY THE AO AND THEREFORE THE ORDER OF THE CIT(A) WAS CONFIRMED WHO CONFIRMED THE ACTION OF THE ASSESSING OFFICER. IN THE PRESENT CASE, ONLY FEW DAYS WERE LEFT WITH THE ASSE SSEE WHEN THE ASSESSING OFFICER DIRECTED TO FILE THE CONFIRMA TION IN REGARD TO TRANSACTIONS WORTH RS. 6800 CRORES OF TURNOVER A ND THE ASSESSEE HAS FILED ABOUT 93% OF THE CONFIRMATION BE FORE COMPLETION OF THE ASSESSMENT AS THOSE CONFIRMATIONS HAVE BEEN ACCEPTED BY THE ASSESSING OFFICER. NO ADDITION HAS BEEN MADE TO THE EXTENT TO WHICH CONFIRMATIONS WERE FILE D BEFORE HIM. ALMOST ALL CONFIRMATIONS WERE BEFORE THE CIT(A ), HOWEVER, THEY HAVE NOT ACCEPTED BY THE CIT(A) BY OBSERVING T HAT THESE ARE ADDITIONAL EVIDENCES. THE CIT(A) HAS CO-TERMINU S POWERS, THEREFORE, HE SHOULD HAVE ACCEPTED THE ADDITIONAL E VIDENCES SUBJECT TO ALLOWING OPPORTUNITY TO THE ASSESSING AS PER IT RULES. INSTEAD OF CONFIRMING THE ADDITION, THE CIT (A) SHOULD HAVE RESTORED THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER OR SHOULD HAVE SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER WHICH HE FAILS TO DO SO. IN SIMILAR CIRCUMSTANCES I N MANY CASES MATTER HAS BEEN RESTORED TO THE FILE OF THE A SSESSING OFFICER TO ALLOW OPPORTUNITY TO THE ASSESSEE. IN TH E CASE OF SHRI BHUPENDRA C. DALAL DECIDED IN ITA NO. 166/MUM/2004 FOR AY 1992-93 VIDE ORDER DATED 29.3.06 BY WHICH THE MATTE R WAS ITA NOS. 5868/M/07 V.N. PAREKH SECURITIES LTD. 3 SENT BACK TO THE FILE OF THE ASSESSING OFFICER TO C ONSIDER THE SAME AFRESH. THEREFORE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND TO MEET THE END OF JU STICE, WE RESTORE THE ISSUE TO THE FILE IN REGARD TO ADDITION OF RS. 1409430834/- TO THE FILE OF THE ASSESSING OFFICER T O CONSIDER THE SAME AFRESH AFTER AFFORDING PROPER OPPORTUNITY TO THE ASSESSEE. 3.1. THOUGH, IN THE ORIGINAL ASSESSMENT ORDER THE A GGREGATE ADDITION WAS TO THE EXTENT OF RS. 140.94,CRORES IN THE SET ASIDE ASSESSMENT THE ADDITION WAS RESTRICTED TO RS. 38,90 ,250/- IN RESPECT OF THREE PARTIES FROM WHOM THE ABOVE PURCHA SES WERE CLAIMED TO HAVE BEEN MADE BUT NO CONFIRMATIONS IN T HIS RESPECT WERE FILED IN ANY OF THE CASES. THE DETAILS OF WHIC H ARE AS UNDER:- SR.NO. NAME OF THE CLIENT ADDRESS AMOUNT (RS.) 1. AAMY SHAH KARAMACHAND 11,26,125 2. M.L. MACHINERY CO.PVT. LTD. MANSION 16,38,000 3. SONAL SHAH BARACK ROAD, BEHIND METRO CINEMA, MUMBAI 11,26,125 38,90,250 3.2 THE AO HELD THAT SINCE THE ASSESSEE FAILED TO A SSIGN ANY REASON FOR SUCH COMPLIANCE IN OBTAINING CONFIRMATIO NS, DESPITE ADEQUATE OPPORTUNITY, THE ADDITION OF RS. 38,90,250 /- IS SUSTAINED. BEFORE THE CIT(A) THE LEARNED AR OF THE ASSESSEE CO NTENDED THAT CONSIDERING THE LARGE NUMBER OF CONFIRMATIONS FILED IN RESPECT OF OTHER PARTIES, NON-COMPLIANCE ON THE PART OF THE AS SESSEE IN RESPECT OF THREE PARTIES ARE QUITE NEGLIGIBLE. IT W AS STATED THAT THE AO MADE ADDITION OF A SUM OF RS. 38,90,250/- BEING PURCHASES OF CLIENTS (3PARTIES.) ON ACCOUNT OF NON-AVAILABILITY OF CONFIRMATION. THE TURNOVER OF THE ASSESSEE FOR THE YEAR UNDER CON SIDERATION WAS RS. 6800.79 CRORES (PURCHASES RS. 33906.00 CRORES A ND SALES RS. 3404.79 CRORES) AND THE TOTAL NUMBER OF CLIENTS IS 79. THE ASSESSEE FURNISHED CONFIRMATIONS TO THE AO OF 76 CLIENTS REP RESENTING 99.00% OF THE TOTAL TURNOVER. CONFIRMATIONS FROM 3 CLIENTS BELONGING TO THE SAME GROUP HAVE NOT BEEN RECEIVED WHICH ITA NOS. 5868/M/07 V.N. PAREKH SECURITIES LTD. 4 REPRESENTS 0.01% OF TOTAL TURNOVER. WITH REGARD TO THE SPECIFIC PARTIES, WHOSE CONFIRMATIONS WERE NOT FILED, THE AS SESSEE HAD SUBMITTED THAT IN RESPECT OF AAMY SHAH AND SONAL SH AH, THE ASSESSEE SUBMITTED THE CHEQUE NO. AND BANK DETAILS. AS SUCH, THE CLIENTS ARE ALSO KNOWN TO THE BANK AND THE BANKERS MAY HAVE OPENED THEIR BANK ACCOUNTS ON THE BASIS OF INTRODUC TION OF AN ACCOUNT HOLDER OF THE BANK. IN RESPECT OF M.L. SHAH & CO. MACHINERY PVT. LTD., AS THE CLIENT IS A CORPORATE, THE IDENTITY OF THE CLIENT WAS KNOWN TO THE REGISTRAR OF COMPANIES. FRO M THE ABOVE IT WAS CRYSTAL CLEAR THAT CLIENTS ARE NOT FICTITIOUS P ERSONS. IT WAS ALSO CONTENDED THAT SECTION 69 IS NOT APPLICABLE. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT(A) HELD AS UND ER:- 3. I HAVE CAREFULLY CONSIDERED THE ABOVE FACTS AND DO NOT FIND ANY MERIT IN IT. IN SO FAR AS THE CONTENTION REGARD ING THE APPLICABILITY OF THE PROVISION OF SECTION 69 IS CON CERNED, THE ISSUE IS BEYOND THE APPEAL AS NO SUCH GROUND HAS BE EN TAKEN EITHER IN THE PRESENT APPEAL OR IN THE APPEAL FILED AGAINST THE ORIGINAL ASSESSMENT ORDER, EITHER BEFORE THE HONBL E ITAT OR THE LEARNED CIT(A). NO ADDITIONAL GROUND HAS ALSO B EEN FILED. THEREFORE, SUCH A QUESTION CANNOT BE AGITATED AS IT HAS REACHED FINALITY AS THE APPELLANT NEVER AGITATED IT BEFORE ANY OF THE AUTHORITIES. 3.1)IT IS AN ADMITTED FACT THAT CONFIRMATION S IN RESPECT OF THE ABOVE THREE PARTIES WERE NEITHER FUR NISHED IN THE ORIGINAL ASSESSMENT NOR APPEAL PROCEEDINGS OR IN TH E SECOND INNINGS ALLOWED TO IT BY THE HONBLE ITAT, THOUGH MORE THAN ENOUGH OPPORTUNITY WAS ACCORDED TO THE APPELLANT WH ICH IT HAS FAILED TO UTILIZE. THE REFERENCE TO STATISTICAL FIG URES RATHER THAN MAKING COMPLIANCE TO THE DIRECTION OF THE TRIBUNAL , ONLY GOES TO SHOW THAT THE APPELLANT HAS NO CASE. IT HAS FAIL ED TO BRING ON RECORD ANY MATERIAL FACT TO SHOW THAT THE SAID P ARTIES WERE AT ANY TIME, REQUESTED TO GIVE THEIR CONFIRMATIONS. THUS, IT CAN BE CONCLUDED THAT NO EVEN A MINIMUM EFFORT HAS BEEN MADE BY THE APPELLANT. MERE SUBMISSION OF COPIES OF ACCOUNT DO NOT FULFILL THE DIRECTIONS OF THE HONBLE ITAT WHICH IN THE ORDER IN ITA NO. 3716 AND 4894/MUM/04 DATED 22.8.2006 WHERE THE MATTER HAS BEEN RESTORED BACK TO THE ASSESSING OFFI CER WITH A DIRECTION TO CONSIDER THE CONFIRMATION AND OTHER DE TAILS WHICH COULD NOT BE FILED BEFORE THE COMPLETION OF ASSESSM ENT. 3.2) THUS, ,THE APPELLANT HAS FAILED TO COMPLY WITH THE DIRECTIONS OF THE HONBLE ITAT, DESPITE GIVEN MORE THAN ADEQUATE OPPORTUNITY IN THE MATTER IN THE SET ASIDE PROCEEDINGS. THE ASSESSING OFFICER WAS, THEREFORE, NOT LEFT WITH ANY OTHER OPTION BUT TO RETAIN THE ADDITION MA DE IN THE ORIGINAL ASSESSMENT ORDER. IT MAY BE STATED HERE TH AT THE ITA NOS. 5868/M/07 V.N. PAREKH SECURITIES LTD. 5 ASSESSING OFFICER IS REASONABLE ENOUGH TO DELETE SI MILAR ADDITION IN RESPECT OF MANY OTHER PARTIES WHERE THE APPELLANT COULD FILED RESPECTIVE CONFIRMATIONS. THUS, THERE I S ABSOLUTELY NO ERROR IN THE ASSESSMENT ORDER IN THIS REGARD AND THE ADDITION MADE IS, THEREFORE, UPHELD. 4. THE LEARNED AR SUBMITTED THAT IT IS SECOND ROUND OF LITIGATION AS EARLIER THE ITAT HAS REMITTED THE MATTER BACK TO THE FILE OF THE AO. THE LEARNED AR SUBMITTED THAT ORIGINAL DISALLOW ANCE WAS RS. 140.94 CRORES, WHICH WAS RESTRICTED TO RS. 38,90,25 0/- IN RESPECT OF THREE PARTIES TO WHOM PURCHASES WERE CLAIMED TO HAVE BEEN MADE BUT NO CONFIRMATION IN THIS RESPECT WERE FILED . THE LEARNED AR FURTHER SUBMITTED THAT DURING THE YEAR UNDER CONSID ERATION, THE TURNOVER OF THE ASSESSEE WAS IN CRORES OF RS. 6800. 79 WITH A TOTAL 79 NUMBER OF CLIENTS, WHICH REPRESENT 99.99% OF TOT AL TURNOVER. THE CONFIRMATIONS FROM THREE CLIENTS BELONGING TO S AME GROUP HAVE NOT BEEN RECEIVED, WHICH REPRESENT ONLY 0.01% OF TO TAL TURNOVER. THE LEARNED AR SUBMITTED THAT WHEN CONFIRMATION FIL ED BY THE ASSESSEE FOR 99.99% OF THE TOTAL TURNOVER HAS BEEN ACCEPTED BY THE AO, THE AO SHOULD NOT HAVE MADE ADDITION ON ACCOUNT OF 3 CLIENTS FROM WHOM NO CONFIRMATION WAS FILED. THE AO HAS TO CONSIDER ALL OVER THE POSITION AND NATURE OF TRANSACTION. THE LE ARNED AR SUBMITTED THAT IN RESPECT OF THESE PARTIES THE ASSE SSEE HAS SUBMITTED CHEQUE NOS. AND BANK ACCOUNT AND OTHER DE TAILS. THE LEARNED AR SUBMITTED THAT IN RESPECT OF TWO PARTIES M/S ML SHAH MACHINERY CO. P. LTD. AND OTHER, WHO ARE HAVING COR PORATE IDENTITY AND WAS KNOWN TO THE REGISTRAR OF THE COMPANIES, TH EREFORE, THE AO COULD HAVE VERY WELL VERIFIED THE EXISTENCE OF T HOSE PARTIES. IT IS ALSO THE SUBMISSION OF THE LEARNED AR THAT THE AO M ADE ADDITION U/S 69 OF THE ACT, WHICH IS NOT APPLICABLE TO THE F ACTS OF THE CASE UNDER CONSIDERATION. THE LEARNED AR IN SUPPORT OF H IS CONTENTION RELIED UPON THE FOLLOWING DECISIONS:- 1. DEPUTY COMMISSIONER OF INCOME-TAX V. ROHINI BUILDER S 256 ITR 360 (GUJ) 2. EXOIMP RESOURCES (INDIA) LTD. V. CIT [2005] 276 ITR 87 (KOL.) 3. SMT. PRABHAVATI S. SHA V. CIT, [1998] 231 ITR 1 (BOM.) ITA NOS. 5868/M/07 V.N. PAREKH SECURITIES LTD. 6 5. THE LEARNED DR, ON THE OTHER HAND RELIED UPON TH E ORDER OF CIT (A) AND SUBMITTED THAT IN THE FIRST ROUND OF LI TIGATION THE ITAT HAS SENT THE MATTER BACK TO THE FILE OF THE AO ON T HE BASIS OF THE CONTENTION OF THE ASSESSEE THAT THE CONFIRMATIONS W ERE FILED BEFORE THE CIT(A) BUT THE CIT(A) COULD NOT CONSIDER THE SA ME. THE LEARNED DR FURTHER SUBMITTED THAT THE AO HAS GIVEN CATEGORI CAL FINDING THAT THE ASSESSEE DID NOT MAKE ANY ATTEMPT TO COLLECT CO NFIRMATIONS DESPITE VARIOUS OPPORTUNITIES GIVEN BY THE AO. THE LEARNED DR FURTHER SUBMITTED THAT THE CASE UNDER CONSIDERATION RELATED TO KETAN GROUP WHEREIN PURCHASES WERE MADE BY OWN GROU P. THE LEARNED DR WHILE REFERRING THE SPECIAL BENCH DECISI ON OF ITAT MUMBAI IN CASE OF TRIUMPH SECURITIES LTD., IN IT (S S)A NO. 444/M/04 DATED 7 TH APRIL, 2010 WHEREIN IT HAS BEEN HELD THAT MERELY BY FURNISHING 98% CONFIRMATIONS, IT CANNOT B E HELD THAT THE ASSESSEE HAD FULLY DISCHARGED ITS BURDEN THAT THE T RANSACTION DID NOT BELONG TO HIM. IT WAS FURTHER HELD THAT THE BAL ANCE TRANSACTION, IF ANY, DULY CONFIRMED HAVE TO BE CONSIDERED AS UND ISCLOSED INCOME OF THE ASSESSEE. THE LEARNED DR SUBMITTED THAT THE ITAT SPECIAL BENCH OF MUMBAI HAS ALSO GIVEN ITS FINDING IN RESPE CT OF ADDITION U/S 69. IT WAS HELD THAT SECTION 69, HAS DEFINED UN EXPLAINED INVESTMENT WITH RESPECT TO ENTIRE VALUE OF INVESTME NT NOT RECORDED IN THE BOOKS OF ACCOUNT, WHICH IS BEING TREATED AS INCOME OF THE ASSESSEE OF SUCH F.Y. THE LEARNED DR HAS ALSO SUBMI TTED THAT THIS WAS NOT THE CASE WHERE ITAT SENT THE MATTER BACK TO THE FILE OF THE AO, THEREFORE, THE ASSESSEE COULD NOT RAISE THIS GR OUND AT THIS STAGE. THE LEARNED DR SUBMITTED THAT THE ORDER OF T HE AO IS IN ACCORDANCE WITH THE DECISION OF THE ITAT SPECIAL BE NCH MUMBAI CITED SUPRA. 6. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND PERUSED THE RECORD AS WELL AS GONE THROUGH THE DECI SIONS CITED. THE DECISIONS CITED BY THE LEARNED AR ARE DISTINGUISHAB LE ON FACTS AS THOSE CASES WERE DECIDED BY THE COURTS CONSIDERING FACTS OF THE RESPECTIVE CASE WHICH ARE NOT SIMILAR TO THE FACTS OF THE CASE UNDER CONSIDERATION. THIS IS A SECOND ROUND OF LITIGATION . EARLIER THE ORDER ITA NOS. 5868/M/07 V.N. PAREKH SECURITIES LTD. 7 HAS BEEN SENT BACK TO AO BY THE ITAT. THUS, THE ISS UE TO BE EXAMINED IS FOR LIMITED PURPOSE IN THE SENSE WHETHE R THE AO HAS COMPLIED WITH THE DIRECTIONS OF THE ITAT OR NOT? TH E CONTENTION OF THE ASSESSEE IN THE EARLIER ROUND OF LITIGATION THA T THE ASSESSEE WAS OBTAINED CONFIRMATIONS, WHICH WERE FILED BEFORE THE CIT (A) AND THE CIT (A) DID NOT CONSIDER THE SAME. IN COMPLIANCE WI TH THE DIRECTIONS, THE AO TOOK UP THE CASE AND PROVIDED OP PORTUNITY OF HEARING TO THE ASSESSEE. ON PERUSAL OF RECORD, WE F IND THAT THE ASSESSEE DID NOT FILE CONFIRMATIONS IN RESPECT OF T HREE PARTIES THOUGH IT WAS ARGUED BEFORE ITAT AT THE FIRST ROUND OF LITIGATION THAT ASSESSEE POSSESSES THOSE CONFIRMATIONS & OTHER DETAILS. FURTHER, THE ASSESSEE DID NOT EVEN TOOK TROUBLE TO COLLECT THE CONFIRMATIONS & OTHER DETAILS. IN RESPECT OF THREE PARTIES. IT IS SUPPORTED BY THE FACT THAT THE ASSESSEE DID NOT FUR NISH ANY FRESH MATERIAL. THE ASSESSEE RELIED UPON THE MATERIAL, WH ICH WERE ALSO FILED AT THE ORIGINAL ASSESSMENT. UNDER NORMAL SITU ATIONS, IN SUCH CASES, THERE IS HEAVY BURDEN LIES ON THE ASSESSEE. THE ASSESSEE DID NOT TAKE SERIOUS EFFORTS TO DISCHARGE ITS BURDEN. T HE ASSESSEE TRIED TO SHIFT THE BURDEN ON THE AO THAT THE PARTIES ARE HAVING CORPORATE ENTITY AND THEIR DETAILS ARE AVAILABLE WITH THE REG ISTRAR OF COMPANIES AND BANKS AND OTHERS, THE AO SHOULD VERIF Y THOSE DETAILS. THE ASSESSEE INSTEAD OF SHIFTING THIS BURD EN TO THE AO HE SHOULD HAVE COLLECTED SUCH INFORMATION FROM REGISTR AR OF COMPANIES AND THE SAME COULD HAVE BEEN FURNISHED BE FORE THE AO. BUT WE FIND THAT THE ASSESSEE HAS FAILED IN THIS RE GARDS. WE DO NOT FIND SUBSTANCE IN THE SUBMISSION OF THE ASSESSEE TH AT THE ASSESSEE HAS FURNISHED CONFIRMATION IN RESPECT OF 99.99% OF THE TURNOVER; THEREFORE, THE BALANCE TURNOVER 0.01% MAY BE ACCEPT ED WITHOUT CONFIRMATION. THE ITAT SPECIAL BENCH OF MUMBAI CAT EGORICALLY HELD THAT MERELY FURNISHING 98% CONFIRMATION IT CANNOT B E HELD THAT THE ASSESSEE HAS FULLY DISCHARGED ITS BURDEN. AS A MATT ER OF FACT, THE LAW OF EVIDENCE MANDATES THAT IF THE BEST EVIDENCE IS NOT PLACED BEFORE THE COURTS, AN ADVERSE INFERENCE CAN BE DRAW N AGAINST THE PERSON OUGHT TO HAVE FURNISHED IT. IN THE CASE UNDE R CONSIDERATION, THE INFORMATION RELATED TO THE PARTIES IS WITH THE ASSESSEE AND THE SAME WERE NOT PRODUCED, THEREFORE AN ADVERSE VIEW C AN BE TAKEN ITA NOS. 5868/M/07 V.N. PAREKH SECURITIES LTD. 8 AGAINST THE ASSESSEE. IT IS EVIDENT FROM THE ORDER OF THE AO THAT WHEREVER CONFIRMATIONS AND OTHER RECORDED FURNISHED BEFORE THE AO, THE AO HAS REDUCED THE ADDITION FROM RS. 140.19 CRORE TO RS. 38,09,250/-, FOR WHICH NO CONFIRMATION WAS FILED. I T IS ALSO PERTINENT TO MENTION THAT MERELY POINTING OUT CERTA IN BANK ENTRIES IS NOT SUFFICIENT EVIDENCE/PROOF, PARTICULARLY, UND ER THE FACTS AND CIRCUMSTANCES OF THE CASE THAT THOSE MATERIALS WERE ALREADY FILED AT THE TIME OF ORIGINAL ASSESSMENT. IN ADDITION TO THA T MATERIAL, NO FRESH MATERIARLS WERE FURNISHED BY THE ASSESSEE NEI THER BEFORE THE REVENUE AUTHORITIES NOR BEFORE US. FURTHER, THE ASS ESSEE FAILED TO ESTABLISH THAT HOW THOSE ENTRIES WERE RELATED TO TH E ISSUE. WE DO NOT FIND ANY SUBSTANCE IN THE SUBMISSION OF THE LEA RNED AR THAT SECTION 69 IS NOT APPLICABLE TO THE FACTS OF THE CA SE. FIRSTLY, THIS IS A SECOND ROUND OF LITIGATION AND IN THE FIRST ROUND OF LITIGATION THERE WAS NO DIRECTION BY THE ITAT TO EXAMINE THE A PPLICABILITY OF SECTION 69 OF THE ACT. ON MERIT, WE FIND THAT THIS ISSUE IS COVERED BY THE DECISION OF ITAT SPECIAL BENCH OF MUMBAI IN THE CASE OF TRIUMPH SECURITIES LTD. (SUPRA) WHERE IN IT HAS BEE N HELD THAT SECTION 69, HAS DEFINED UNEXPLAINED INVESTMENT WITH RESPECT TO ENTIRE VALUE OF INVESTMENT NOT RECORDED IN THE BOOK S OF ACCOUNT, WHICH IS BEING TREATED AS INCOME OF THE ASSESSEE OF SUCH F.Y. IN THE CASE UNDER CONSIDERATION THE ASSESSEE DID NOT RECOR DED ITS INVESTMENT IN SHARES IN THE BOOKS OF ACCOUNT AS INV ESTMENT BUT SAME WERE RECORDED UNDER DIFFERENT HEAD/NAME, PURCH ASES ON BEHALF OF THE PARTIES UNDER THE CIRCUMSTANCES SECTI ON 69 IS CLEARLY APPLICABLE. IN THE LIGHT OF ABOVE DISCUSSIONS WE FI ND THAT THE CIT HAS RIGHTLY HELD THAT THE ASSESSEE HAS FAILED TO DI SCHARGE ITS BURDEN IN THE LIGHT OF THE DIRECTIONS GIVEN BY THE ITAT IN RESPECT OF THREE PARTIES. THE ASSESSEE FAILED TO FURNISH CONFI RMATIONS AND OTHER DETAILS AS ARGUED BEFORE THE ITAT ON THE BASI S OF WHICH THE MATTER WAS SENT BACK TO THE AO FOR FRESH DECISION. WE THEREFORE, CONFIRM THE ORDER OF THE CIT (A). ITA NOS. 5868/M/07 V.N. PAREKH SECURITIES LTD. 9 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF AUGUST, 2010. SD/- SD/- (D. MANMOHAN) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTAN T MEMBER DATED: 20 TH AUGUST, 2010 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, FBENCH, I.T. A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI. KV S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 24.6.10 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 25.6.10/ 10/8/201 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER