SHAILESH J JOGANI, MUMBAI V. DCIT CEN CIR 5(3), MUMBAI

ITA 7354/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 2314 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Assessment Year: 2008-2009
• Appeal Filed On: 14-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAUDHARY ARUN KUMAR SINGH
• Keywords: Search and seizure; Onus to prove
• Section: 143(3); 143(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 7354/MUM/2016 ASSESSMENT YEAR: 2008 - 09 SHRI SHAILESH J. JOGANI, DW - 3010, BHARAT DIAMOND BOURSE, BANDRAKURLA COMPLEX, BANDRA (EAST), MUMBAI - 400051. VS. DCIT CENTRAL CIRCLE - 5(3), ROOM NO. 19 0 6, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI. PAN NO. AEBPJ3548M APPELLANT RESPONDENT ASSESSEE BY : NONE REVENUE BY : MR. CHAUDHARY ARUN KUMAR SINGH, DR DATE OF HEARING : 01 /0 8 /2019 DATE OF PRONOUNCEMENT : 28/08/2019 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2008 - 09 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF T HE COMMISSIONER OF INCOME TAX - 53 , MUMBAI [IN SHORT CIT(A)] AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT 1961, (THE ACT). THOUGH T HE CASE WAS FIXED FOR HEARING BEFORE THE TRIBUNAL ON 26.02.2019 AND 01.08.2019, NEITHER THE ASSESSEE NOR HIS AUTHORIZED REPRESENTATIVE APPEARED ON THE ABOVE DATES. AS THERE IS NON - COMPLIANCE BY THE ASSESSEE, WE ARE PROCEEDING TO DISPOSE OFF THIS APPEAL SHRI SHAILESH J. JOGANI ITA NO. 7354/MUM/2016 2 ON MERITS, AFTER HEARING THE LD. DR AND EXAMINING THE MATERIALS AVAILABLE ON RECORD. 2. THE GROUNDS OF APPEAL FILED BY THE ASSESSEE READ AS UNDER : 1. THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION BY CONSIDERING THE UNSECURED LOAN AS BOGUS AMOUNTING TO RS.70,00,000/ - ON THE BASIS OF INFORMATION RECEIVED FROM INVESTIGATION DEPARTMENT AND RELYING ON THE STATEMENTS OF MR. RAJENDRA JAIN, SHRI SANJAY CHAUDH ARY AND DHARMICHAND JAIN, GIVEN BY THEM DURING THE SEARCH. HENCE, THE SAME DESERVES TO BE DELETED. 2. THE LD. CIT(A) HAS ERRED IN HOLDING THAT APPELLANT IS NOT INTERESTED IN PROSECUTING THE APPEAL FILED BY THE APPELLANT. 3. IN BRIEF, THE FACTS ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR (AY) 2008 - 09 ON 20.11.2008 DECLARING TOTAL INCOME AT RS.14,21,650/ - . THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT ON 08.03.2010. THEREAFTER, THE ASSESSING OFFICER (AO) COMPLETED THE ASSESSMENT U /S 143(3) R.W.S. 147 ON 23.03.2014 ON A TOTAL INCOME OF RS.29,07,660/ - . SUBSEQUENTLY, THE AO RECEIVED INFORMATION FROM THE DIRECTOR GENERAL OF INCOME TAX, INVESTIGATION WING, MUMBAI (IN SHORT DGIT) THAT SHRI RAJENDRA JAIN GROUP, SHRI SANJAY CHAUDHARY GRO UP AND SHRI DHARMICHAND JAIN WERE THE ENTRY PROVIDERS OPERATING IN MUMBAI. AS PER THE INFORMATION RECEIVED FROM THE DGIT, THE ASSESSEE HAD RECEIVED BOGUS UNSECURED LOAN OF RS.70,00,000/ - DURING THE YEAR UNDER CONSIDERATION FROM THE ABOVE GROUPS. ON THE BAS IS OF THE SAID INFORMATION, THE AO ISSUED NOTICE U/S 147 ON THE REASON THAT INCOME TO THE TUNE OF RS.70,00,000/ - CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. SHRI SHAILESH J. JOGANI ITA NO. 7354/MUM/2016 3 A SEARCH AND SEIZURE ACTION WAS CONDUCTED BY THE DEPARTMENT ON 05.05.2014 IN THE CASE OF THE ASSESS EE. ON THE BASIS OF THE MATERIALS FOUND DURING THE COURSE OF SEARCH, THE AO COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 ON 08.03.2016 DETERMINING THE TOTAL INCOME AT RS.1,04,37,660/ - . 4. AGGRIEVED BY THE ORDER OF THE AO THE ASSESSEE FILED AN APPEAL BEFO RE THE LD. CIT(A). WE FIND THAT VIDE ORDER DATED 26.09.2016, THE LD. CIT(A) DISMISSED THE APPEAL FILED BY THE ASSESSEE BY OBSERVING THAT - 4.3.3 FROM PERUSAL OF THE STATEMENTS OF THE APPELLANT REPRODUCED IN PARA 5 OF THE IMPUGNED ORDER, THE A.O. RIGHTLY CONCLUDED THAT IT WAS ESTABLISHED BEYOND DOUBT THAT THE APPELLANT HAD INTRODUCED HIS UNACCOUNTED CASH IN THE BOOKS OF ACCOUNT IN THE GUISE OF UNSECURED LOANS. DURING THE COURSE OF ASSESSMENT, THE AR OF THE APPELLANT WHILE RESPONDING TO ORDER SHEET NOTING D ATED 26.02.2016 ALSO ADMITTED THAT SHE COULD NOT PROVE THE GENUINENESS OF THE SAID LOANS. EVEN AT THE APPELLATE STAGE, NO STEPS HAVE BEEN TAKEN BY THE APPELLANT TO ESTABLISH THE GENUINENESS OF THE UNSECURED LOANS AGGREGATING TO RS.70,00,000/ - FROM SAID FOU R PARTIES WITH COGENT AND CREDIBLE DOCUMENTARY EVIDENCE. NO ORAL WRITTEN SUBMISSIONS HAVE BEEN MADE BY THE APPELLANT/ HIS AR EXPLAINING AS TO HOW THE ADDITION OF RS.70,00,000/ - MADE BY THE A.O. U/S. 68 OF THE ACT TREATING THE AFORESAID UNSECURED LOANS AS B OGUS IS ERRONEOUS, UNREASONABLE OR UNJUSTIFIED. THUS, THE APPELLANT HAS SO FAR FAILED TO DISCHARGE THE ONUS PLACED ON HIM U/S 68 TO ESTABLISH THE GENUINENESS OF THE SAID LOANS. IN VIEW OF ABOVE DISCUSSION, I DO NOT FIND ANY REASON TO INTERFERE WITH THE FIN DING OF THE A.O. IN HOLDING THE UNSECURED LOANS FROM AFORESAID FOUR PARTIES AGGREGATING TO RS.70,00,000/ - AS NON - GENUINE OR UNEXPLAINED U/S 68 OF THE ACT AND MAKING ADDITION OF THE SAME TO THE TOTAL INCOME OF THE APPELLANT . SHRI SHAILESH J. JOGANI ITA NO. 7354/MUM/2016 4 5. THE LD. DR SUBMITS THAT AS P ER THE LIST OF BENEFICIARIES FORWARDED BY THE INVESTIGATION WING, THE ASSESSEE HAD RECEIVED BOGUS UNSECURED LOANS OF RS.70,00,000/ - FROM THE SAID PARTIES DURING THE YEAR UNDER CONSIDERATION. DURING THE COURSE OF SEARCH AND SEIZURE IN THE PREMISES OF THE AS SESSEE ON 05.05.2014, THE ASSESSEE WAS ALSO CONFRONTED WITH THE CONFESSIONAL STATEMENTS OF SHRI RAJENDRA JAIN AND SHRI DHARMICHAND JAIN. IN HIS DEPOSITIONS AT THE TIME OF SEARCH, THE ASSESSEE COULD NOT FURNISH THE NAMES OR DETAILS OF ANY OF THE PARTNERS/DI RECTORS/PROPRIETORS OR ANY OTHER PERSON ASSOCIATED WITH THE SAID FOUR PARTIES FROM WHOM LOANS AMOUNTING TO RS.70,00,000/ - WERE SHOWN TO HAVE BEEN TAKEN DURING THE PERIOD. RATHER, THE ASSESSEE CATEGORICALLY ADMITTED THAT HE COULD NOT SUBSTANTIATE THE GENUINENESS OF UNSECURED LOANS TAKEN FROM AADIIMPEX, KRIYAIMPEXPVT. LTD., KARNAWATIMPEXPVT. LTD., KANGAN JEWELS PVT. LTD. AND MANIPRABHATIMPEXPVT. LTD. AND THAT HE HAD TAKEN THESE UNSECURED LOAN ENTRIES IN LIEU OF CASH. IN VIEW OF THE ABOVE POSITION, THE ASSESSEE IN HIS STATEMENT RECORDED U/S 132(4) ON TWO OCCASIONS OFFERED THE SAID AMOUNT OF BOGUS UNSECURED LOANS FOR TAXATION. THUS THE LD. DR SUBMITS THAT THE ORDER PASSED BY THE LD. CIT(A) BE CONFIRMED. 6. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE INSTANT CASE, THE ASSESSEE HAS CATEGORICALLY ADMITTED THAT HE COULD NOT SUBSTANTIATE THE GENUINENESS OF UNSECURED LOANS TAKEN FROM AADIIMPEX, KRIYAIMPEXPVT. LTD., KARNAWATIMPEXPVT. LTD., KANGAN JEWEL S PVT. LTD. AND MANIPRABHATIMPEXPVT. LTD. AND THAT HE HAD TAKEN THESE UNSECURED LOAN ENTRIES IN LIEU OF CASH. ALL THE MORE, THE ASSESSEE IN SHRI SHAILESH J. JOGANI ITA NO. 7354/MUM/2016 5 HIS STATEMENT RECORDED U/S 132(4) ON TWO OCCASIONS, OFFERED THE SAID AMOUNT OF BOGUS UNSECURED LOANS FOR TAXATION. T HE LD. CIT(A) HAS NOTED THAT DURING THE COURSE OF APPELLATE PROCEEDINGS THE ASSESSEE COULD NOT ESTABLISH THE GENUINENESS OF UNSECURED LOANS AMOUNTING TO RS.70,00,000/ - FROM THE SAID FOUR PARTIES WITH DOCUMENTARY EVIDENCE. IT IS SETTLED LAW THAT GENUINENESS OF TRANSACTION IS A BASIC INGREDIENT TO DISCHARGE THE BURDEN OF PROOF U/S 68 OF THE ACT AS HELD IN THE CASE OF SHANKAR IND V. CIT 114 ITR 689 ; PRAKASH TEXTILE V. CIT 121 ITR 890 ; KANT V. CIT 126 ITR 63 ; CIT V. UNITED 187 ITR 596 AND UNNEERI V. CIT 198 I TR 147. AS THE ASSESSEE HAS FAILED IN THE INSTANT CASE TO ESTABLISH THE GENUINENESS OF TRANSACTION, WE UPHOLD THE ORDER OF THE LD. CIT(A). 7. IN THE RESULT, THE APPEAL IS DISMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 28/08/2019. SD/ - SD/ - (SAKTIJIT DEY) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 28/08/2019 RAHUL SHARMA, SR. P.S. SHRI SHAILESH J. JOGANI ITA NO. 7354/MUM/2016 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A) - 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE . BY ORDER, //TRUE COPY// (SR. PRIVATE SECRETARY) ITAT, MUMBAI