DCIT CEN CIR 8(1), MUMBAI V. KSHITHIJA INFRASTRUCTURE P.LTD, MUMBAI

ITA 7378/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7404 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-05-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 14-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: NAMRATA KASALE
• Keywords: Search and seizure; Corroborative evidences; Assessment record
• Section: 143(3); 153A; 132

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , AM & SHRI SANDEEP GOSAIN, JM ./ I.T.A. NO . 7378 /MUM/201 6 ( / ASSESSMENT YEAR: 2012 - 13 ) DCIT CEN. CIR 8(1), R. NO. 656, 6 TH FLOOR, AAYAKARBHAVAN, M. K. ROAD , MUMBAI - 400020 . / VS. KSHITHIJA INFRASTRUCTURE PVT. LTD. 216 TARDEO, A.C. MARKET TARDEO ROAD, TARDEO, MUMBAI - 400034. ./ ./ PAN/GIR NO. A A DCA0222A ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI M. C. OMI NINGSHEN, DR / RESPONDENTBY : SHRI VIPUL JOSHI & MS. NAMRATAKASALE, AR / DATE OF HEARING : 10 /0 4 /201 8 / DATE OF PRONOUNCEMENT : 01/05/2018 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE REVENUE IS AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 50 , MUMBAI, DATED 2 I.T.A. NO. 7378 /MUM/201 6 KSHITHIJA INFRASTRUCTURE PVT. LTD. 31.08 .16 FOR AY 20 12 - 13 O N THE GROUNDS MENTIONED HEREIN BELOW: - 1. ON THE FACTS AND CIRCUMSTANCE S OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 41,40,389/ - ONACCOUNT OF UNVERIFIABLE PURCHASES FROM M/S RIDDHI ENTERPRISES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT FULFILLED THE PRE - REQUISITE CONDITIONS OF SUBSTANTIATING ITS CLAIM WITH SU PPORTING EVIDENCES DURING THE ASSESSMENT PROCEEDINGS.' 2. 0N THE FACTS AND CIRCUMSTANCES OF THE CASE, THE 14. CIT(A) ERRED IN HOLDING THAT THE AMOUNT OF RS. 41,40,389/ - ON ACCOUNT OF PURCHASES FROM M/ S RIDDHI ENTERPRISES, AS SUBSTANTIATED, ADMITTING THE C LAIM OF THE ASSESSEE THAT THE SAID PARTY IS TOTALLY DIFFERENT FROM THE PARTY SHOWN AS BOGUS/ HAWALA PARTY, WITHOUT APPRECIATING THE FACT THAT THE ASSESSING OFFICER HAD CLEARLY ESTABLISHED THE NON GENUINE NATURE OF THE PURCHASES.' THE APPELLANT PRAYS THAT T HE ORDER OF THE CIT - (A), ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND AND /OR ADD NEW GROUNDSWHICH MAY NECESSARY. 3 I.T.A. NO. 7378 /MUM/201 6 KSHITHIJA INFRASTRUCTURE PVT. LTD. 2 . AS PER THE FACTS OF THE PRESENT CASE, THE ASSES SEE IS ONE OF THE GROUP CONCERNS OF M/S LOTUS - ENPAR GROUP, COVERED UNDER SEARCH AND SEIZURE OPERATION. A SEARCH AND SEIZURE ACTION U/S 132 OF THE I.T. ACT 1961 WAS CARRIED OUT ON 09.01.13 IN THE GROUP CASES BELONGING TO M/S LOTU S - ENPAR GROUP. THEREFORE STA TUTORY NOTICES U/S 153A(1)(A) WAS DULY SERVED UPON THE ASSESSEE AND IN RESPONSE THERETO, THE ASSESSEE FILED ITS RETURN OF INCOME ON 03.02.14 DECLARING TOTAL INCOME OF RS. 4,50,712/ - . LATER ON, AFTER SERVING STATUTORY NOTICE AND SEEKING REPLY, ORDER OF ASSE SSMENT U/S 153A R.W.S 143(3) WAS PASSED B Y AO THEREBY DETERMINED THE TOTAL INCOME ASSESSEE AT RS. 46,13,230/ - . AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES PARTLY ALLOWED THE APPEA L OF THE ASSESSEE BY DELETING THE ADDITION . NOW BEFORE US, THE REVENUE HAS PREFERRED THE PRESENT APPEAL BY RAISING THE ABOVE GROUNDS. 4 I.T.A. NO. 7378 /MUM/201 6 KSHITHIJA INFRASTRUCTURE PVT. LTD. GROUND NO. 1 TO 2 3 . SINCE BOTH THE ABOVE GROUNDS RAISED BY THE REVENUE ARE INTER - CONNECTED AND INTER - RELATED AND RELATES TO CHALLENGING THE ORDER OF LD. CI T(A) HAS ERRED IN DELETING THE ADDITION OF RS. 41,40,389/ - ON ACCOUNT OF UNVERIFIABLE PURCHASES FROM M/S RIDDHI ENTERPRISES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS NOT FULFILLED THE PRE - REQUISITE CONDITIONS OF SUBSTANTIATING ITS CLAIM WITH SUPPORTING EVIDENCES DU RING THE ASSESSMENT PROCEEDINGS, THEREFORE WE THOUGHT IT FIT TO DEAL WITH ALL THE ISSUES BY PASSING THE PRESENT CONSOLIDATED ORDER. 4 . WE HAVE HEARD THE COUNSELS FOR BOTH THE PARTIES AND WE HAVE ALSO THE ORDERS PASSED BY THE REVENUE AUTHORITIES AS WELL AS MATERIAL PLACED ON RECORD. WE FIND THAT THE AO MADE ADDITIONS ON ACCOUNT OF UNVERIFIABLE PU RCHASES BY HOLDING THAT SINCE THE ASSESSEE COULD NOT PRODUCE THE DOCUMENTARY EVIDENCE IN RESPECT OF PURCHASES MADE BY IT FROM M/S RIDDHI ENTERPRISES AND M/S YOGESHWAR ENTERPRISES. IT WAS FURTHER HELD THAT THE KEY PERSON OF THE GROUP SHRI RAVINDRA B. LAD HA D ALSO RECORDED HIS STATEMENT ON OATH U/S 132(4) OF THE I.T. ACT, 1961 IN 13.01.13 AND ADMITTED 5 I.T.A. NO. 7378 /MUM/201 6 KSHITHIJA INFRASTRUCTURE PVT. LTD. TO OFFER THE AMOUNT OF PURCHASES MADE FROM THESE TWO PARTIES AS IN COME FROM RESPECTIVE ENTITIES FOR RESPECTIVE YEARS. LD. CIT(A) DELETED THE ADDITIONS BY HOL DING THAT SHRI RAVINDRA B. L AD H AD NO LOCUS STANDI AND WAS NOT COMPETENT TO MAKE ANY DECLARATION REGARDING AFFAIRS OF THE ASSESSEE COMPANY. LD. CIT(A) FURTHER HELD THAT M/S RIDDHI ENTERPRISES FROM WHOM THE ASSESSEE HAD MADE PURCHASES WAS A D IFFERENT ENTITI ES WHICH WAS MENTIONED BY SHRI RAVINDRA B. LAD IN HIS STATEMENT. AFTER HAVING HEARD THE COUNSELS FOR BOTH THE PARTIES AT LENGTH, WE F IND THAT THERE WAS NO MATERIAL BEFORE LD. CIT(A) TO HOLD THAT SHRI RAVINDRA B. LAD HAD NO LOCUS STANDI AND WAS NOT COMPET ENT TO MAKE ANY DECLARATION. LD. CIT(A) WHILE DOING SO, CITED ALL THE FACTS THAT THE STATEMENT OF SHRI RAVINDRA B. LAD WAS RECORDED U/S 132(4) OF THE I.T. ACT WHICH WAS ON OATH AND THE SAME COULD NOT BE DISCARDED ON FLIMSY GROUND. MOREOVER, ASSESSEE HAD RE LIED UPON THE LETTER DATED NIL WHICH IS AT PAGE NO. 34 OF THE PAPER BOOK AND AS PER THE ASSESSEE, THE SAID LETTER WAS SUBMITTED TO THE DCIT IN RESPECT OF STATEMENT OF SHRI RAVINDRA B. LAD U/S 132(4) OF THE I.T. ACT. HOWEVER, ON PERUSAL OF THE SAID LETTER, WE FIND THAT ASSESSEE HAD NOWHERE MENTIONED THAT SHRI 6 I.T.A. NO. 7378 /MUM/201 6 KSHITHIJA INFRASTRUCTURE PVT. LTD. RAVINDRA B. LAD WAS HAVING NO LOCUS STANDI OR WAS NOT COMPETENT TO RECORD ANY STATEMENT , RATHER ONLY GROUND TAKEN IN THE SAID LETTER IS THAT GROUP HAD ERRONEOUSLY DISCLOSED AND AGGREGATED THE AMOUNT OF RS. 1,58,14,543/ - AS PURCHASES FROM THE PARTIES I.E. M/S RIDDHI ENTERPRISES AND M/S YOGESHWAR ENTERPRISES IN THE HANDS OF VARIOUS ENTITIES OF THE GROUP FOR VARIOUS FINANCIAL YEARS. WE ALSO NOTICED THAT CERTAIN DOC UMENTS WERE FILED IN THE SHAPE OF INVOICES, ETC. BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) AND THE LD. CIT(A) HAD SOUGHT THE REMAND REPORT FROM THE AO WHICH WAS NEVER SUBMITTED. THEREFO RE, WITHOUT ANY VERIFICATION IN RESPECT OF ALL THE DOCUMENTS FILED BY THE ASSESSEE DURING THE APPELLATE PROCEEDINGS AND ALSO IN THE ABSENCE OF ASSESSMENT RECORDS , LD. CIT(A) DELETED THE ADDITIONS. BE THAT AS IT MAY , C ONSIDERING AND KEEPING IN VIEW THE INTEREST OF JUSTICE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO WITH A DIRECTION TO VERIFY ALL THE DOCUMENTS PLACED ON RECORD BY THE ASSESSEE DURING THE COURSE OF 7 I.T.A. NO. 7378 /MUM/201 6 KSHITHIJA INFRASTRUCTURE PVT. LTD. APPELLATE PROCEE DINGS BEFORE THE LD. CIT(A) DURING THE COURSE OF APPEAL WHICH IS CONTAINE D IN PAGE NO. 1 TO 111 OF THE PAPER BOOK A ND THEREAFTER PASS AFRESH ORDER OF ASSESSMENT. IT IS NEEDLESS HERE TO MENTION THAT BEFORE PASSING THE ORDER OF ASSESSMENT, THE AO SHALL PROVIDE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESS E E. BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECISION TO RESTORE THE MATTER BACK TO THE FILE OF AO SHALL IN NO WAY BE CONSTRUED AS HAVING ANY REFLECTION OR EXPRESSION ON THE MERITS OF THE DISPUTE, WHICH SHALL BE ADJUDICATED BY THE AO INDEPENDENTLY IN ACCORDANCE WITH LAW. WI TH THESE DIRECTIONS, THESE GROUNDS OF APPEAL FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. 5 . IN THE NET RESULT, THEAPPEAL FILED BY THE REVENUE IS ALLOWEDFOR STATISTICAL PURPOSES . ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST MAY , 2018. SD/ - SD/ - (R.C. SHARMA ) ( SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 01 . 0 5 . 201 8 SR.PS . DHANANJAY 8 I.T.A. NO. 7378 /MUM/201 6 KSHITHIJA INFRASTRUCTURE PVT. LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI