SPA Agencies (India) Pvt.Ltd., CHENNAI V. ACIT, CHENNAI

ITA 729/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64419 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 11-10-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 09-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: T N SEETHARAMAN
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NOS. 729 & 730/MDS/2012 ASSESSMENT YEARS : 2002-03 & 2003-04 M/S. SPA AGENCIES (INDIA) PVT. LTD., GEE GEE EMERALD, 151, VILLAGE ROAD, NNGAMBAKKAM, CHENAI-600034. V. THE ASST. COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-VI(4), CHENNAI. (PAN : AAECS0942E) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.N. SEETHARAMAN, ADVOCATE RESPONDENT BY : SHRI S. DASGUPTA, JCIT DATE OF HEARING : 11.1 0.2012 DATE OF PRONOUNCEMENT : 17.10.201 2 O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINS T THE ORDERS OF THE CIT(APPEALS)-V, CHENNAI DATED 27-01-2 012 AND 26-01-2012 FOR THE ASSESSMENT YEARS 2002-03 AND 20 03-04 RESPECTIVELY. ITA NOS. 729 & 730/MDS/2012 2 2. FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY FI LED RETURNS OF INCOME FOR THE ASSESSMENT YEARS 2002-03 AND 2003- 04 DECLARING LOSS OF ` 3,55,990/- AND PROFIT OF ` 19,80,430/- RESPECTIVELY. THE ASSESSING OFFICER AFTER RECEIVIN G INFORMATION FROM THE DIT(INV.), NEW DELHI THAT THE ASSESSEE HAS TAKEN ENTRIES OF ` 30,20,803/- DURING THE ASSESSMENT YEAR 2002-03 AND ` 26,58,918/- DURING THE ASSESSMENT YEAR 2003-04 WHICH ARE NOT REFLECTED IN THE STATEMENT OF ACCOUNT S ANNEXED TO THE RETURN OF INCOME FILED FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE ASSESSMEN T WAS RE-OPENED UNDER SECTION 147. NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE. THE REASONS FOR RE-OPENING THE ASSESSMENTS WERE COMMUNICATED TO THE ASSESSEE. THEREAFTER THE ASSESSMENTS WERE COMPLETE D UNDER SECTION 143(3) READ WITH SECTION 147 OF THE INCOME TAX ACT, 1961 ('THE ACT' FOR SHORT). 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER OBSERVED THAT WHEN THE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE APPEARED BEFORE HIM HE WAS SPECIFICALLY REQUESTED TO FURNISH THE DETAILS OF TH E TRANSACTIONS THAT TOOK PLACE BETWEEN THE ASSESSEE AND M/S. GANGA ITA NOS. 729 & 730/MDS/2012 3 CREATIONS, NEW DELHI. IN RESPONSE THERETO, THE LEA RNED COUNSEL FOR THE ASSESSEE PRODUCED LEDGER EXTRACTS O F M/S. GANGA CREATIONS IN THE BOOKS OF THE ASSESSEE. ON P ERUSAL OF THE SAID LEDGER EXTRACTS IT WAS NOTICED THAT CERTAI N TRANSACTIONS WERE ALLEGED TO HAVE TAKEN PLACE. THE ASSESSEE PRO DUCED BANK STATEMENTS WHEREIN IT HAS IDENTIFIED CERTAIN T RANSACTIONS ALLEGED TO HAVE TAKEN PLACE WITH M/S. GANGA CREATIO NS. ON PERUSAL OF THE BANK STATEMENT IT WAS OBSERVED THAT THERE IS NO NARRATION IN RELATION TO ANY OF THE TRANSACTIONS EX CEPT CLEARING. HENCE IT HAD BECOME VERY DIFFICULT TO COMPREHEND WHETHER THE TRANSACTIONS WERE WITH M/S. GANGA CREAT IONS OR OTHERWISE. AS THE NARRATION WAS VAGUE THE ASSESSEE WAS ASKED TO PROVE THAT THE TRANSACTIONS HAD ACTUALLY T AKEN PLACE WITH M/S. GANGA CREATIONS, NEW DELHI. THE ASSESSEE PRODUCED LEDGER EXTRACTS WHEREIN THERE ARE ALSO TRA NSACTIONS PERTAINING TO OTHERS. TO ASCERTAIN THE CORRECT PO SITION, A LETTER WAS ADDRESSED TO M/S. GANGA CREATIONS, NEW D ELHI CALLING FOR THE ACCOUNT COPIES OF THE ASSESSEE AS A PPEARING IN THE BOOKS OF M/S. GANGA CREATIONS FOR THE FINANCIAL YEAR 2001- 02 RELEVANT TO THE ASSESSMENT YEAR 2002-03 AND COPI ES OF BANK STATEMENTS IN SUPPORT OF THE TRANSACTIONS. BUT THERE WAS ITA NOS. 729 & 730/MDS/2012 4 NO RESPONSE FROM M/S. GANGA CREATIONS, NEW DELHI, T ILL DATE AND IN THE ABSENCE OF CONFIRMATION FROM M/S. GANGA CREATIONS IT WAS CONCLUDED THAT THE ASSESSEE DID NOT HAVE ANY SORT OF TRANSACTIONS WITH THE SAID PARTY. THEREFORE, THE T RANSACTIONS WERE CONSIDERED AS BOGUS AND BROUGHT TO TAX. 4. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER BEFORE THE CIT(APPEALS). IT WAS SUBMITTED BEFORE T HE LEARNED CIT(APPEALS) THAT THE ASSESSING OFFICER WITHOUT CON SIDERING THE DETAILS AND WITHOUT CONDUCTING ENQUIRY THE ENTI RE AMOUNT WAS DISALLOWED AS UNEXPLAINED SOURCE AND SUBMITTED THAT THE DISALLOWANCE MADE BY THE ASSESSING OFFICER FOR THE RELEVANT ASSESSMENT YEARS UNDER CONSIDERATION MAY BE DELETED . 5. IT WAS ALSO SUBMITTED BEFORE THE LEARNED CIT(APP EALS) THAT THE ASSESSEE WANTED TO PRODUCE NECESSARY BILLS, BAN K STATEMENTS, CONFIRMATION LETTERS AND OTHER NECESSARY EVIDENCE T O SHOW THE GENUINENESS OF THE TRANSACTIONS WHICH WERE DISALLOW ED IN THE ORDER AND TO ADMIT THE ABOVE EVIDENCE AT THE TIME O F APPEAL. THE LEARNED CIT(APPEALS) AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE PASSED AN ORDER WHICH IS AS UNDER : 4.1 DURING THE COURSE OF APPELLATE PROCEEDINGS, TH E CASE WAS POSTED FOR HEARING ON 15-11-2010, 20-7-201 1, ITA NOS. 729 & 730/MDS/2012 5 4-11-2011, 18-11-2011 AND 1-12-2011. HOWEVER, NEITHER ANY ONE ATTENDED ON THE SPECIFIED DATES NOR REQUEST FOR ADJOURNMENTS WERE RECEIVED AND THEREBY THE APPELLANT HAS NOT AVAILED THE OPPORTUNITIES GRANTED . THEREAFTER ANOTHER OPPORTUNITY WAS GRANTED ON 11-01 - 2012. ON THIS DATE SHRI MUKESH KUMAR CA, AR OF THE APPELLANT APPEARED WHO EXPLAINED THE GROUNDS OF APP EAL AND RELIED ON THE GROUNDS OF APPEAL. 4.2 NO DETAILS, WHATSOEVER, HAVE BEEN FURNISHED ON ANY OF THE GROUNDS OF APPEAL. NO MATERIAL WHATSOEV ER HAS BEEN PRODUCED TO SUPPORT THE GROUNDS OF APPEAL. ALSO NO SUBMISSIONS HAVE BEEN MADE WITH REGARD TO A NY OF THE GROUNDS OF APPEAL. THOUGH THE APPELLANT PLE ADS THAT SUFFICIENT OPPORTUNITY WAS NOT PROVIDED BY THE AO TO FURNISH NECESSARY DETAILS AND EVIDENCE TO SUPPORT I TS CASE BUT, AS WOULD BE SEEN FROM THE FACT S MENTIONE D ABOVE, EVEN IN QUITE LARGE NUMBER OF OPPORTUNITIES PROVIDED DURING THE APPEAL PROCEEDINGS HAVE NOT BEE N AVAILED. THE NECESSARY BILLS, BANK STATEMENTS, CONFIRMATION OF LEDGER ACCOUNT ETC., WHICH THE APPE LLANT INTENDED TO PRODUCE BEFORE THE AO TO PROVE THE GENUINITY OF THE TRANSACTION BETWEEN THE APPELLANT AND GANGA CREATIONS PRIVATE LIMITED HAVE NOT BEEN PRODU CED EVEN BEFORE ME. IN VIEW OF THE SAME ALL THE GROUND S OF APPEAL ARE DISMISSED AS NOT SUBSTANTIATED. 6. ON BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER BEFORE THE TRIBUNAL. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED ITA NOS. 729 & 730/MDS/2012 6 THAT ALL THE MATERIALS RELEVANT TO COMPLETE THE ASS ESSMENTS WERE FILED BEFORE THE ASSESSING OFFICER. ALL THE TRANSA CTIONS ARE GENUINE. ALL THE TRANSACTION DETAILS WITH BANK WERE FILED. THE ASSESSING OFFICER WITHOUT CONDUCTING ENQUIRY HELD T HE TRANSACTIONS AS BOGUS. 7. ON THE OTHER HAND, THE LEARNED DR STRONGLY SUPPO RTED THE ORDER PASSED BY THE LEARNED CIT(APPEALS). IT WAS S UBMITTED THAT THE ASSESSEE FAILED TO FILE ALL THE NECESSARY MATER IALS AND DOCUMENTS BEFORE THE ASSESSING OFFICER. THE ASSESS EE HAS NOT FILED ANY CONFIRMATION FROM THE PART, M/S. GANGA CR EATIONS. THE ASSESSEE HAS FAILED TO DISCHARGE THE BURDEN WHICH I S CAST UPON IT AND THEREFORE THE ADDITION CONFIRMED BY THE LEARNED CIT(APPEALS) HAS TO BE UPHELD. HE FURTHER SUBMITTED THAT THE LEA RNED COUNSEL FOR THE ASSESSEE EVEN SUBMITTED BEFORE THE LEARNED CIT(APPEALS) THAT HE WANTED TO PRODUCE SOME OF THE DETAILS AND B ANK STATEMENTS AND CONFIRMATIONS. IN SPITE OF SPECIFIC REQUEST WHICH HE HAD MADE BEFORE THE LEARNED CIT(APPEALS), HE DID NOT FILE THOSE RELEVANT MATERIAL BEFORE THE LEARNED CIT(APPE ALS). IT SHOWS THAT THE TRANSACTIONS CARRIED ON BY THE ASSESSEE WI TH M/S. GANGA CREATIONS WERE BOGUS TRANSACTIONS. ITA NOS. 729 & 730/MDS/2012 7 8. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD S AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE CASE OF THE ASSESSEE IS THAT THE ASSESSEE IS HAVING BUSINESS CO NNECTION WITH M/S. GANGA CREATIONS, NEW DELHI. THOSE TRANSACTION S WERE NOT REFLECTED IN THE STATEMENTS OF ACCOUNTS ANNEXED TO THE RETURNS OF INCOME FOR THE YEARS UNDER CONSIDERATION. THE ASSES SING OFFICER AFTER RECEIVING INFORMATION FROM DIT(INVESTIGATION) , NEW DELHI ISSUED NOTICE TO THE ASSESSEE AND HE CALLED FOR SPE CIFIC EXPLANATION FROM THE ASSESSEE AND TO FURNISH ALL THE DETAILS IN RESPECT OF M/S. GANGA CREATIONS, NEW DELHI. THEREAFTER THE ASSESS EE HAS FILED SOME BANK STATEMENTS AND ON PERUSAL OF THE SAME THE ASSESSING OFFICER FOUND THAT THERE IS NO NARRATION IN RELATIO N TO ANY OF THE TRANSACTIONS EXCEPT CLEARING. THE ASSESSEE HAS A LSO PRODUCED LEDGER EXTRACTS BUT THOSE TRANSACTIONS ALSO PERTAIN ED TO SOME OTHERS. THE ASSESSEE HAS NOT PRODUCED ANY BANK STA TEMENT OR ANY BOOKS OF ACCOUNT WHICH WOULD SHOW THAT THE ASSE SSEE HAD A BUSINESS CONNECTION WITH M/S. GANGA CREATIONS. THE ASSESSING OFFICER ALSO ISSUED NOTICE TO M/S. GANGA CREATIONS, NEW DELHI CALLING FOR THE ACCOUNT COPIES OF THE ASSESSEE AS A PPEARING IN THE BOOKS OF ACCOUNT OF M/S. GANGA CREATIONS FOR THE AS SESSMENT YEARS UNDER CONSIDERATION. BUT NO CONFIRMATION WAS RECEIVED FROM ITA NOS. 729 & 730/MDS/2012 8 M/S. GANGA CREATIONS. EVEN AS ON TODAY THE ASSESSE E IS NOT HAVING ANY CONFIRMATION. UNDER THOSE CIRCUMSTANCES THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE T RANSACTIONS WITH M/S. GANGA CREATIONS WERE BOGUS AND THE ADDITION WA S MADE. ON APPEAL BEFORE THE LEARNED CIT(APPEALS) THE ASSESSEE SUBMITTED THAT IT WANTED TO PRODUCE THE BILLS, BANK STATEMENT S, CONFIRMATION LETTERS AND OTHER EVIDENCES. THE LEARNED CIT(APPEA LS) GAVE 5 OPPORTUNITIES TO FILE THOSE RELEVANT MATERIALS AS P RAYED FOR BY THE ASSESSEE. ON THE 6 TH OCCASION THE ASSESSEES CA APPEARED AND SIMPLY EXPLAINED THE GROUNDS OF APPEAL AND NO DETAI LS WERE FILED BEFORE THE LEARNED CIT(APPEALS). UNDER THOSE CIRCU MSTANCES, THE LEARNED CIT(APPEALS) CAME TO THE CONCLUSION THAT TH E TRANSACTIONS WITH M/S. GANGA CREATIONS WERE BOGUS AND CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. EVEN BEFORE US NO C ONFIRMATION WAS FILED EXCEPT STATING THAT THE ASSESSEE IS HAVIN G ALL THE RELEVANT MATERIALS AND ALL THE TRANSACTIONS WITH M/S. GANGA CREATIONS ARE GENUINE. IF THE ASSESSEE IS HAVING BANK STATEMENTS AND ACCOUNT COPIES RELATING TO M/S. GANGA CREATIONS, WE ARE NOT ABLE TO UNDERSTAND WHY THE ASSESSEE DID NOT FILE THE SAME B EFORE THE ASSESSING OFFICER AND EXPLAINED IN DETAIL BY SHOWIN G THAT THOSE WERE THE TRANSACTIONS WITH M/S. GANGA CREATIONS. A PART FROM THAT, ITA NOS. 729 & 730/MDS/2012 9 HAVING PRAYED BY THE LEARNED COUNSEL FOR THE ASSESS EE BEFORE THE LEARNED CIT(APPEALS) THAT HE WOULD LIKE TO FILE THE DETAILS, NOTHING WAS FILED. EVEN HE DID NOT CARE TO APPEAR BEFORE H IM ON 5 OCCASIONS. IN OUR CONSIDERED OPINION, THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST UPON IT BY PRODUCING THE RE LEVANT MATERIAL. THEREFORE, TAKING INTO CONSIDERATION OVE R ALL FACTS AND CIRCUMSTANCES OF THE CASE, THE GROUND OF APPEAL RAI SED BY THE ASSESSEE IS DISMISSED. 9. IN ITA NO. 730/MDS/2012 THE FACTS ARE SIMILAR TO THE FACTS IN ITA NO. 729/MDS/2012. IN THE CIRCUMSTANCES, IN VIE W OF OUR ABOVE FINDING, THE ASSESSEES APPEAL IN ITA NO. 730 /MDS/2012 IS ALSO DISMISSED. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE DISMISSED. ORDER PRONOUNCED ON, WEDNESDAY, THE 17 TH OF OCTOBER, 2012, AT CHENNAI. SD/- SD/- (N. S. SAINI) ( V.DURGA RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI, DATED THE 17 TH OCTOBER, 2012. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FIL E