M/S. SHIELD TRADELINKS PVT. LTD, MUMBAI V. ITO 8 (2)(1), MUMBAI

ITA 5909/MUM/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 8345 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2002-2003
• Appeal Filed On: 15-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Set aside
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM / I .T.A. NO. 5909 / MUM/ 20 1 8 ( / ASSESSMENT YEAR: 200 2 - 03 ) M/S. SHIELD TRADELINKS PVT. LTD. 51, BROACH STREET, KAPADIA CHAMBERS, MASJID BUNDER, MUMBAI - 400009. / VS. ITO 8(2)(1) MUMBAI. ./ ./ PAN/GIR NO. : AAFCS 5456 C ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 20/02/2020 / DATE OF PRONOUNCEMENT : 20 / 04 / 2020 / O R D E R PER SHAMIM YAHYA, AM: THIS IS APPEAL BY THE ASSESSES AGAINST THE O RDER OF LEARNED CIT(A) DATED 23.07 .201 8 AND PERTAINS TO A.Y.2002 - 03 . 2. T HE ISSUE RAISED IS THAT THE LD. CIT(A) ERRED IN CONFIRMED THE DISALLOWANCE OF COMMISSION PAYMENT OF RS. 23,66,028/ - . 3. IN THIS CASE , THIS IS THE SECOND ROUND OF APPEAL BEFORE ITAT. TH E ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE I. T. ACT, 1961 VIDE ORDER DATED 29.12.2009 MAKING THE DISALLOWANCE OF COMMISSION PAYMENT OF RS.23,66,028/ - TO M/S. MOIRA STEELS LTD. ON THE GROUND THAT THE PAYMENTS WERE BOGUS. THE SAID DISALLOWANCE WAS CONFIRMED BY THE CIT(A) VIDE ORDER DATED 22.11.2012. THE ASSESSEE ASSESSEE BY : SHRI CHAITANYA ANJARIA (AR) RE VENUE BY: NONE ITA. NO. 5909 /M/2018 A.Y.2002 - 03 2 FILED APPEAL AGAINST THE ORDER OF THE CIT(A) BEFORE THE HONBLE ITAT TAKING THE PLEA THAT THE REPLY FROM M/S. MOIRA STEEL DATED 18.11.2009 WAS NOT CONSIDERED BY THE ASSESSING OFFICER. TH E HONBLE ITAT VIDE ITS ORDER NO. ITA. NO.1476/M/2013 DATED 08.12.2014 HAD REMAND THE APPEAL TO THE FILE OF THE AO TO DECIDE THE APPEAL OF THE ASSESSEE AFRESH IN ACCORDANCE WITH LAW FOR WHICH DUE OPPORTUNITY OF BEING HEARD. IN THE SET ASIDE ASSESSMENT THE AO AGAIN REFERRED THE MATTER OF STATEMENT ON OATH ON THE BASIS OF WHICH THE PAYMENT OF COMMISSION WAS DISALLOWED. HE HELD THAT A SSESSEE HAS NOT FURNISHED ANY EVIDENCE OR SUPPORTING PROOF IN RESPECT OF SERVICE RENDERED BY M/S. MOIRA STEELS LTD. FOR WHICH TH E COMMISSION WAS PAID. HENCE THE AO CONFIRMED THE ADDITION . U PON THE ASSESSEE S APPEAL LD. CIT(A) HELD THAT WHEN DURING THE COURSE OF SURVEY ACTION U/S 133A OF THE I. T . A CT AT THE BUSINESS PREMISES OF M/S MOIRA STEELS LTD, THE RESPONSIBLE DIRECTOR SHRI VI MAL TODI CONFESSED BEFORE THE AUTHORIZED OFFICERS AND THAT M/S. MOIRA STEELS LTD. HAD NOT RENDERED ANY SERVICE TO THE ASSESSEE COMPANY AND HAD RATHER GIVEN ACCOMMODATION ENTRY IN RESPECT OF COMMISSION PAYMENT OF RS.23,66,028/ - , THE ONUS WAS CAST ON THE ASS ESSEE . HENCE BE HELD THAT IT CANNOT BE HELD THAT ONUS HAS BEEN DISCHARGED BY FILING MERE CONFIRMATION OF M/S. MOIRA STEELS LTD. HE HELD THAT T HE ASSESSEE SHOULD HAVE AT LEAST FILED THE CORRESPONDENCE FROM THE CUSTOMERS REGARDING SERVICES RENDERED BY M/S. MOIRA STEELS LTD. FROM TIME TO TIME IN THE COURSE OF RENDERING SERVICE. I N THE ABSENCE OF ABOVE HE UPHELD THE ORDER OF THE AO. 2. AGAINST ABOVE ORDER ASSESSEE IS IN APPEAL BEFORE THE ITAT. I HAVE HEARD LD. DR AND PERUSED THE RECORDS. NONE - APPEARED ON BEHA LF ITA. NO. 5909 /M/2018 A.Y.2002 - 03 3 OF THE ASSESSEE. I NOTE THAT THE ADDITION OF IN THIS CASE ON ACCOUNT OF DISALLOWANCE OF COMMISSION EXPENSES IS SOLELY BASED UPON THE STATEMENT OF THE DIRECTOR OF THE RECIPIENT COMPANY OBTAINED IN THE COURSE OF SURVEY BY THE DEPARTMENT . T HE ADDITION WAS CONFIRMED BY LD. CIT(A). HOWEVER, THE ITAT HAS REMITTED THE MATTER TO THE FILE OF THE AO TO EXAMINE AFRESH. IN THE SET ASIDE ASSESSMENT, THE AO DID NOT DO ANY FURTHER EXAMINATION . H E REPEATED THE OBSERVATIONS OF EARLIER ASSESSMENT ORDER. THE LD. CIT(A) ALS O CONFIRMED THE SAME. IT IS CLEAR THAT THE ADDITION IS SOLELY BASED ON STATEMENT OBTAINED IN THE SURVEY . IT IS A SETTLED LAW FROM THE HONBLE APEX COURT OF CIT VS. S. KHADER KHAN SONS (2012) 254 CTR 228 THAT THE STATEMENT OF SURVEY DE HORS ANY CORROBORATIV E EVIDENCE CANNOT BE THE SOLE BASIS OF ADDITION OF ACCOMMODATION ENTRY. MOREOVER , THIS SOLE BASIS HAS ALREADY BEEN HELD TO BE NOT RELIABLE BY HONBLE ITAT AND THE MATTER WAS REMITTED THE FILE OF AO. ACCORDINGLY, IN OUR CONSIDERED OPINION, THIS ADDITION IS LIABL E TO BE DELETED. ACCORDINGLY, I SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE ADDITION. IN THE RESULT THIS APPEAL BY THE AS SESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 /04 /2020 S D/ - ( SHAMIM YAHYA ) / ACCOUNTANT MEMBER MUMBAI; DATED : 20 / 04 / 2020 V IJAY PAL SINGH/SR. PS ITA. NO. 5909 /M/2018 A.Y.2002 - 03 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUAR D FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI