DCIT CENT. CIR. - 2(4), MUMBAI V. INDERPURI EXPRESS COURIERS PVT. LTD., MUMBAI

ITA 6072/MUM/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2201 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 13-10-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AWUNGSHI GIMSON
• Keywords: Sale consideration of property below Jantri Value; Income from undisclosed sources
• Section: 153A; 132

Judgement Text

1 INDERPURI EXPRESS COURIERS PVT LTD IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C, MUMBAI BEFORE SHRI C.N. PRASAD (JUDICIAL MEMBER) AND SHRI G MANJUNATHA (ACCOUNTANT MEMBER) I.T.A NO.6072/MUM/2016 - AY 2007-08 I.T.A NO.6073/MUM/2016 - AY 2008-09 I.T.A NO.6074/MUM/2016 - AY 2009-10 I.T.A NO.6075/MUM/2016 - AY 2010-11 I.T.A NO.6076/MUM/2016 - AY 2011-12 I.T.A NO.6077/MUM/2016 - AY 2012-13 I.T.A NO.6078/MUM/2016 - AY 2013-14 DY.CIT, CENT.CIR.2(4), MUMBAI VS M/S INDERPURI EXP RESS COURIERS PVT LTD 27/29, DR M.B. VELKAR STREET, KALBADEVI, MUMBAI- 400 002 PAN : AAACI7950C APPELLANT RESPONDEDNT APPELLANT BY SHRI AWUNGSHI GIMSON RESPONDENT BY NONE DATE OF HEARING 14-11-2018 DATE OF PRONOUNCEMENT 16-11-2018 O R D E R PER BENCH: THIS BUNCH OF SEVEN APPEALS FILED BY THE REVENUE A RE DIRECTED AGAINST THE COMMON ORDER PASSED BY THE COMMISSIONER OF INCOME-T AX (APPEALS)-48, MUMBAI DATED 29-07-2016 FOR THE ASSESSMENT YEARS 20 07-08 TO 2013-14. SINCE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, FO R THE SAKE OF CONVENIENCE, 2 INDERPURI EXPRESS COURIERS PVT LTD THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER. 2. THE REVENUE HAS TAKEN UP MORE OR LESS COMMON GRO UNDS OF APPEAL FOR ALL ASSESSMENT YEARS. FOR THE SAKE OF BREVITY, GROUND OF APPEAL RAISED FOR AY 2007-08 IN ITA NO.6072/MUM/2016 ARE EXTRACTED BELOW :- (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD' COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN DELETI NG THE ADDITION OF UNDISCLOSED INCOME AMOUNTING TO RS.47,15,OOO/- A S ESTIMATED ON HAWALA BUSINESS OF TRANSPORTING CASH FROM ONE PLACE TO ANOTHER AS PER MODUS OPERAND! AS ADMITTED BY THE ASSESSEE/ WIT HOUT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HA S RIGHTLY EXTRAPOLATED THE INCOME OF THE ASSESSEE FOR THE YEA RS AY2OO7-O8 TO AY2O13-14 UNDER CONSIDERATION BASED ON THE CASH AMO UNTING TO RS 82,22,2OQ/~ FOUND DURING THE COURSE OF SEARCH AT OFFICE PREMISE AND THE LOCKER OF THE A SSESSEE MAINTAINED WITH M/S GOLD SUKH SAFETY VAULTS LTD, WHICH WAS ADM ITTED BEING HIS UNDISCLOSED COMMISSION INCOME ON HAWALA TRANSACTION FOR THE PERIOD 1.4.2O12 TILL THE DATE OF SEARCH (9.11.2O12) OF THE ASSESSEE?' (II) 'ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD' COMMISSIONER OF INCOME TAX (APPEAL) ERRED IN IGNORI NG THE PRINCIPAL OF EXTRAPOLATION OF INCOME AS LAID DOWN BY THE HON' BLE SUPREME COURT IN THE CASE OF EUSAFALI 90ITR 271?' 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF COURIER SERVICES . A SEARCH ACTION U/S 132 OF THE I.T. ACT, 1961 WAS CARRIED OUT AT THE OFFICE PREMISES OF THE ASSESSEE. DURING THE COURSE OF SEARCH, A LOCKER NO.575 AT M/S GOLD SUKH SAFETY VAULTS LTD, VITHALWADI, MUMBAI WHICH WAS OPERATED IN THE N AME OF SHRI VISHAL KALANTRI, MANAGING DIRECTOR OF THE COMPANY HAVING T OTAL CASH OF RS.82,22,200 WAS FOUND. IN THE STATEMENT RECORDED U/S 132(4), S HRI VISHAL KALANTRI, MANAGING DIRECTOR OF THE COMPANY HAS ADMITTED THAT CASH FOUND IN LOCKER WAS HIS OWN UNACCOUNTED INCOME AND ACCORDINGLY HAS OFFE RED IT FOR TAXATION IN THE 3 INDERPURI EXPRESS COURIERS PVT LTD RETURN OF INCOME FILED FOR AY 2013-14. CONSEQUENT TO SEARCH, NOTICES U/S 153A OF THE ACT WERE ISSUED FOR SIX ASSESSMENT YEARS IMM EDIATELY PRECEDING THE ASSESSMENT YEAR IN WHICH SEARCH TOOK PLACE. LATER, THE CASES HAVE BEEN SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSE SSMENT PROCEEDINGS, THE AO HAS MADE ADDITION ON THE BASIS OF ESTIMATED COMMISS ION INCOME FROM HAWALA BUSINESS IN THE HANDS OF SHRI VISHAL KALANTRI, ON S UBSTANTIVE BASIS. THE AO ALSO MADE ADDITION TOWARDS SIMILAR COMMISSION INCOME IN THE HANDS OF THE ASSESSEE ON PROTECTIVE BASIS ON THE GROUND THAT CER TAIN INCRIMINATING MATERIALS RELATED TO HAWALA BUSINESS WERE FOUND FROM THE PREM ISES OF THE ASSESSEE COMPANY AND FURTHER, ONE OF THE EMPLOYEES, SHRI DAU DAYAL SHARMA HAD STATED THAT THE ASSESSEE COMPANY WAS INVOLVED IN THE BUSIN ESS OF HAWALA TRANSACTIONS. 4. AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSEE PREF ERRED APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), ASSESSEE STATED THAT TH E AO HAS MADE ADDITION TOWARDS ESTIMATED COMMISSION INCOME ON THE BASIS OF INCRIMINATING MATERIAL FOUND DURING SEARCH IN THE HANDS OF SHRI VISHAL KAL ANTRI ON SUBSTANTIVE BASIS AND THE SAID ADDITION HAS BEEN CHALLENGED BY SHRI V ISHAL KALANTRI BEFORE THE FIRST APPELLATE AUTHORITY. THE ASSESSEE FURTHER CO NTENDED THAT WHEN ADDITION HAS BEEN MADE ON SUBSTANTIVE BASIS IN THE HANDS OF SHRI VISHAL KALANTRI, PROTECTIVE ADDITION MADE IN THE HANDS OF THE ASSESS EE WAS NOT SUSTAINABLE. 4 INDERPURI EXPRESS COURIERS PVT LTD THE LD.CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE AO HAS MADE SUBSTANTIVE ADDITION IN THE HANDS O F SHRI VISHAL KALANTRI TOWARDS COMMISSION INCOME EARNED FROM HAWALA BUSINE SS AND PROTECTIVE ADDITION IN THE HANDS OF THE ASSESSEE FOR SIMILAR C OMMISSION INCOME. THE LD.CIT(A) FURTHER OBSERVED THAT SINCE SUBSTANTIVE A DDITION MADE IN THE HANDS OF SHRI VISHAL KALANTRI HAS BEEN DEALT WITH IN HIS HANDS AND ALLOWED PARTIAL RELIEF, PROTECTIVE ADDITION MADE IN THE HANDS OF TH E ASSESSEE CANNOT BE SUSTAINED. ACCORDINGLY, HE DIRECTED THE AO TO DELE TE ADDITION MADE TOWARDS ESTIMATED COMMISSION INCOME ON PROTECTIVE BASIS IN THE HANDS OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD.CIT(A), THE REVENUE IS IN APPEALS BEFORE US. 5. THE LD.DR SUBMITTED THAT THE ISSUE INVOLVED IN T HESE APPEALS IS PROTECTIVE ADDITION MADE BY THE AO TOWARDS ESTIMATED COMMISSIO N INCOME DERIVED FROM HAWALA TRANSACTIONS. THE LD.DR FURTHER SUBMITTED T HAT THE AO HAS MADE SUBSTANTIVE ADDITION IN THE HANDS OF SHRI VISHAL KA LANTRI, THE MANAGING DIRECTOR OF THE COMPANY AND THE SAID ADDITION HAS BEEN DEALT WITH IN HIS HANDS AND AFTER CONSIDERING RELEVANT SUBMISSIONS, PARTIAL REL IEF HAS BEEN GRANTED. THE LD.DR FURTHER SUBMITTED THAT ON FURTHER APPEAL BEFO RE THE ITAT, THE ITAT, MUMBAI BENCH F IN ITA NO.6086 TO 6092/MUM/2016 HA S CONSIDERED THE ISSUE AND AFTER CONSIDERING RELEVANT FACTS, HAS UPH ELD THE FINDINGS OF THE LD.CIT(A). THOUGH THE SUBSTANTIVE ADDITION HAS BEE N CONSIDERED IN THE HANDS 5 INDERPURI EXPRESS COURIERS PVT LTD OF SHRI VISHAL KALANTRI AND SUCH ADDITION HAS BEEN DELETED PARTIALLY BY THE ITAT, THE PROTECTIVE ADDITION MADE IN THE HANDS OF THE AS SESSEE NEEDS TO BE EXAMINED IN THE LIGHT OF FACTS GATHERED BY THE AO D URING ASSESSMENT PROCEEDINGS INDEPENDENTLY WITHOUT BEING INFLUENCED BY THE ORDER PASSED BY THE ITAT IN THE CASE OF SHRI VISHAL KALANTRI. 6. THE LD.AR FOR THE ASSESSEE, ON THE OTHER HAND, S UBMITTED THAT SINCE THE SUBSTANTIVE ADDITION MADE IN THE HANDS OF SHRI VISH AL KALANTRI HAS ATTAINED FINALITY IN VIEW OF ITATS ORDER, THE PROTECTIVE AD DITION MADE IN THE HANDS OF ASSESSEE COULD NOT BE SUSTAINED AND ACCORDINGLY, TH E LD.CIT(A) WAS RIGHT IN DELETING ADDITION MADE BY THE AO FOR ALL ASSESSMENT YEARS. 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE AO HAS MADE PROTECTIVE ADDITION IN THE HANDS OF THE ASSESSEE TOWARDS ESTIMATED COMMISSION INCOME DERIVED FROM HA WALA TRANSACTIONS ON THE GROUND THAT CERTAIN INCRIMINATING MATERIALS WER E FOUND IN THE PREMISES OF THE ASSESSEE AND FURTHER, ONE OF THE EMPLOYEES HAS STATED THAT THE COMPANY IS INVOLVED IN HAWALA TRANSACTIONS. IT IS ALSO AN ADM ITTED FACT THAT SUBSTANTIVE ADDITION MADE IN THE HANDS OF SHRI VISHAL KALANTRI HAS ATTAINED FINALITY IN VIEW OF THE ORDER OF ITAT, WHERE THE ADDITION MADE BY TH E AO HAS BEEN EXAMINED IN THE LIGHT OF INCRIMINATING MATERIAL FOUND DURING TH E COURSE OF SEARCH. ONCE, THE SUBSTANTIVE ADDITION HAS BEEN CONSIDERED BY THE APP ELLATE AUTHORITIES IN THE 6 INDERPURI EXPRESS COURIERS PVT LTD HANDS OF SHRI VISHAL KALANTRI, THE PROTECTIVE ADDIT ION MADE TOWARDS COMMISSION INCOME IN THE HANDS OF THE ASSESSEE COUL D NOT BE SUSTAINED. THE LD.CIT(A), AFTER CONSIDERING RELEVANT SUBMISSIONS, HAS RIGHTLY DELETED ADDITION MADE IN THE HANDS OF THE ASSESSEE FOR ALL ASSESSMEN T YEARS UNDER CONSIDERATION. WE DO NOT FIND ANY ERROR IN THE FIN DINGS OF LD.CIT(A) AND HENCE, WE ARE INCLINED TO UPHOLD THE FINDINGS OF LD.CIT(A) AND DISMISS THE APPEALS FILED BY THE REVENUE FOR AYS 2007-08 TO 2013-14. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE REVE NUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH NOVEMBER, 2018. SD/- SD/- (C.N. PRASAD) (G MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT : 16 TH NOVEMBER, 2018 PK/- COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR /TRUE COPY/ BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI