ACIT CEN CIR 2(3), MUMBAI V. BUNIYAD CHEMICALS LTD, MUMBAI

ITA 6619/MUM/2011

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0594 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-02-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 03-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N P SINGH
• Keywords: Search and seizure; Document seized; Accommodation entries; Documents seized
• Section: 143(3); 153A

Judgement Text

INCOME TAX APPELLATE TRIBUNAL BENCHES B,MUMBAI BEFORE SHRI P.K. BANSAL, VICE PRESIDENT, AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 6619/MUM/2011 (AY 2008-09); ITA NO. 6620/MUM/2011 (AY 2003-04); ACIT -10(1) 455, 4 TH FLOOR, AAYAKAR BHAVAN, MUMBAI-400020 VS. M/S. BUNIYAD CHEMICALS LTD. BLOCK-H, SHRI SADASHIV CO. OP. HSG. SOC. LTD., 6 TH ROAD, SANTACRUZ (E), MUMBAI-400055 (APPELLANT) (RESPONDENT ) PAN: AABCB6954J APPELLANT BY MR. N.P. SINGH (CIT DR) RESPONDENT BY MR. MUKESHCHOKSI DATE OF HEARING: 01/06/20 17 DATE OF ORDER : 01/06/2017 ORDER UNDER SECTION 254(1) OF THE INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER, THESE TWO APPEAL BY REVENUE UNDER SECTION 253 OF T HE INCOME TAX ACT ARE DIRECTED AGAINST COMMON ORDER DATED 28.06.2 011 OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-III, AHMEDABAD FOR ASSESSMENT YEARS 2003-04 & 2008-09. IN BOTH THE APPEALS, IDENT ICAL GROUNDS OF APPEAL ARE RAISED. THUS, BOTH THE APPEAL WERE HEARD TOGETHER AND ARE DECIDED BY A CONSOLIDATED ORDER TO AVOID THE CONFLI CTING DECISION. 2. AT THE OUTSET OF HEARING THE LD. AR OF THE ASSE SSEE ARGUED THAT THE GROUNDS OF APPEAL RAISED BY REVENUE IN BOTH THE APP EALS ARE COVERED BY THE DECISION OF TRIBUNAL IN ASSESSEES GROUP CASE I N ITA NO. 996/M/02015 AND IN CASE OF MIHIR AGENCIES PVT. LTD. , 695/M/2015. IT ITA NO.6619 & 2000/M/2011 M/S BUNIYAD CHEMICSLS LTD. 2 WAS FURTHER ARGUED THAT THE ASSESSEE FILED APPEAL B EFORE THE TRIBUNAL IN THE QUANTUM ASSESSMENT VIDE APPEAL(S) ITA NO. 833/M /2013 FOR AY 2004-5, ITA NO. 835/M/2013 FOR AY 2006-07, APPEAL I TA NO. 836/M/2013 FOR THE AY 2007-08, APPEAL ITA NO. 837/M /2013 AY 2008- 09, ITA NO. 838/M/2013 FOR AY 2008-09 AND ITA NO. 8 39/M/2013 FOR AY 2010-11, WHEREIN THE ESTIMATION OF INCOME COMMIS SION INCOME WAS RESTRICTED TO 0.15%. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE NOT DISPUTED THE FACTUAL POSITION AND THE DECISION OF C O-ORDINATE BENCH IN ASSESSEE GROUP CASE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF PART IES AND PERUSED THE RECORDS OF THE APPEALS. WE HAVE SEEN THAT THE ASSES SEE CHALLENGED THE ADDITION IN QUANTUM ASSESSMENT BEFORE TRIBUNAL AND THE COORDINATE BENCH OF THIS TRIBUNAL VIDE ORDER DATED 04 TH MAY 2016 IN ITA NO. 833/M/2013 FOR AY 2004-5, ITA NO. 835/M/2013 FOR AY 2006-07, I TA NO. 836/M/2013 FOR THE AY 2007-08, ITA NO. 837/M/2013 A Y 2008-09, ITA NO. 838/M/2013 FOR AY 2008-09 AND ITA NO. 839/M /2013 FOR AY 2010-11, PASSED THE FOLLOWING ORDER: 2. AT THE OUTSET, THE ASSESSEE SUBMITTED THAT, SI MILAR ISSUE HAD ARISEN IN GROUP CONCERNS OF THE ASSESSEE BEFORE THE TRIBUNAL WHEREIN THE RATE OF COMMISSION HAS BEEN ACCEPTED AT 0.15%. THE LIST OF SOME OF THE ITAT DECISIONS FILED BEFORE US ARE AS UNDER: (I) M/S. GOLDSTAR FINVEST P. LTD. ITAS 887 AND 269 9/M/2013, ORDER DATED 30.11.2015; ITA NO.6619 & 2000/M/2011 M/S BUNIYAD CHEMICSLS LTD. 3 (II) M/S. MIHIR AGENCIES PVT. LTD., IN ITAS 6435 TO 6441/M/2012 VIDE ORDER DATED 06.01.2016; AND (III) ALLIANCE INTERMEDIATERIES AND NETWORKS P LT D., IN ITAS 2700 TO 2702/M/2013 ORDER DATED 20.02.2016 3. LD. DR ALSO ADMITTED THAT, THE ISSUE OF RATE O F COMMISSION HAS BEEN DECIDED BY THE TRIBUNAL IN VARIOUS CASES. 4. BRIEF FACTS QUA THE ISSUE INVOLVED ARE THAT, A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) WAS CONDUCTED IN THE GR OUP COMPANIES OWNED AND FLOATED BY ASSESSEE, SHRI MUKESH CHOKSI O N 25.11.2009. THE ASSESSEE WAS ALSO COVERED UNDER THE SAME SEARCH AND CONSEQUENTLY ASSESSMENTS UNDER SECTION 153A R.W.S. 143(3) WERE C OMPLETED. THE AO IN THE ASSESSMENT ORDER HAS NOTED THAT, DURING THE COURSE OF THE SEARCH AND SEIZURE ACTION, IT WAS FOUND THAT THE ASSESSEE AND THE GROUP COMPANIES OF THE ASSESSEE WERE ENGAGED IN THE BUSIN ESS OF ACCOMMODATION ENTRIES AND LAUNDERING OF BLACK MONEY . THE ASSESSEE HIMSELF WAS THE MASTERMIND BEHIND FORMATION OF ALL THESE COMPANIES. VARIOUS OTHER DETAILS AND MODUS OPERANDI HAVE BEEN NOTED BY HIM ALONG WITH THE STATEMENT ON OATH OF THE ASSESSEE AN D THE SEIZED DOCUMENTS. THUS, ON THE BASIS OF HIS DETAIL DISCUS SIONS AND MATERIAL ON RECORD, THE AO HELD THAT, THE ASSESSEE AND THE GROU P COMPANIES RUN BY HIM WERE RECEIVING COMMISSION INCOME FROM FOR ALL T HESE ACTIVITIES. SUCH A COMMISSION INCOME WAN RANGING BETWEEN 1.5% T O 3.5%. THE AO ACCORDINGLY REJECTED THE BOOKS OF ACCOUNT OF THE ASSESSEE AND ESTIMATED THE NET PROFIT RATE OF THE COMMISSION @ 2 %, WHICH ACCORDING TO THE ASSESSEE WAS 0.15%. BEFORE THE CIT (A), THE ASSESSEE FILED VARIOUS DECISIONS PASSED BY THE CIT (A) IN GROUP CO MPANIES, WHEREIN, 0.15% OF THE COMMISSION RATE HAS BEEN ACCEPTED. HO WEVER, THE LD. CIT (A) DID NOT ACCEPT THE ASSESSEES CONTENTION AND CO NFIRMED THE ESTIMATE MADE BY THE AO. 5. ON THE PERUSAL OF THE IMPUGNED ORDERS AND THE FINDING OF THE TRIBUNAL IN THE CASE OF M/S. MIHIR AGENCIES PVT. LT D., (SUPRA) AND ON SIMILAR OTHER DECISIONS AS RELIED BEFORE US, WE FIN D THAT THE TRIBUNAL HAS UPHELD THE NET PROFIT RATE OF 0.15%. THE RELEVANT OBSERVATION OF THE TRIBUNAL IN THE CASE OF M/S. MIHIR AGENCIES PVT. LT D. IS REPRODUCED HEREUNDER:- 7. WE FIND THAT IN THE CASE OF GOLD STAR FINVEST LTD., WHICH IS A SISTER CONCERN OF THE ASSESSEE, ON SIMILAR FACTS FO R THE ASSESSMENT ITA NO.6619 & 2000/M/2011 M/S BUNIYAD CHEMICSLS LTD. 4 YEAR 2003-04 AND 2004-05, THE TRIBUNAL AFTER REFERR ING TO VARIOUS DECISIONS HAVE UPHELD THE PERCENTAGE OF COM MISSION ON NET PROFIT @ 0.15% WHICH WAS QUITE CONSISTENT WITH THE STATEMENT RECORDED AT THE TIME OF SEARCH. ACCORDINGLY, FOLLO WING THE JUDICIAL PRECEDENCE IN THE CASE OF THE ASSESSEES S ISTER CONCERN (SUPRA), WE UPHOLD THE RATE OF COMMISSION / RATE OF NET PROFIT FROM SUCH ACTIVITIES AT 0.15%. ACCORDINGLY, GROUND NO. 4, 5 AS RAISED BY THE ASSESSEE ARE ALLOWED. THUS, CONSISTENT WITH THE VIEW TAKEN IN VARIOUS S IMILAR MATTERS, WE ALSO UPHOLD THE RATE OF COMMISSION / NET PROFIT RATE FROM SUCH ACTIVITY AT 0.15%. ACCORDINGLY, THIS ISSUE IS DECI DED IN FAVOR OF THE ASSESSEE. 6. SINCE NO ARGUMENTS HAVE BEEN PLACED ON OTHER G ROUNDS OF APPEAL, THE SAME ARE NOT BEING ADJUDICATED UPON. I N THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 7. IN ALL THE APPEALS, EXACTLY SIMILAR ISSUE ARE INVOLVED FOR OUR CONSIDERATION, OUR FINDING GIVEN ABOVE WILL APPLY M UTATIS MUTANDIS TO THE IMPUGNED APPEALS ALSO, THEREFORE, ALL THE APPEA LS FILED BY THE ASSESSEE ARE TREATED AS PARTLY ALLOWED. 5. CONSIDERING THE FACT THAT THE CO-ORDINATE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE RESTRICTED THE COMMISSION INCOM E AT .15%. THUS, WE DO NOT FIND ANY ILLEGALITY OR INFIRMITY IN THE ORDE R PASSED BY LD. CIT(A), WHICH WE UPHOLD. 6. IN THE RESULT, BOTH THE APPEAL OF REVENUE FOR AY -2003-04 & 2008- 09 ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 1 ST DAY OF JUNE 2017. SD/- (P.K. BANSAL) SD/- (PAWAN SINGH) VICE PRESIDENT JUDICIALMEMBER MUMBAI; DATED : 01/06/2017 S.K. P.S. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT ITA NO.6619 & 2000/M/2011 M/S BUNIYAD CHEMICSLS LTD. 5 2. THE RESPONDENT. 3. THE CIT, MUMBAI. 4. CIT(A)-III, MUMBAI 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, ASSTT.REGISTRAR) ITAT, MUMBAI