NYK Enterprises Pvt. Ltd., New Delhi V. ITO Ward-18(4), New Delhi

ITA 7393/DEL/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 4632 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 08-09-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Accommodation entries; Bogus
• Section: 234B; 143(1); 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI (THROUGH VIDEO CONFERENCING) BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.7393/Del/2019 [Assessment Year : 2016-17] NYK Enterprises Pvt.Ltd., H.No.83, Pocket-19, Sector-24, Rohini, New Delhi-110085. PAN-AADCN1643C vs ITO, Ward-18(4), New Delhi. APPELLANT RESPONDENT Appellant by None Respondent by Shri Sanjay Kumar, Sr.DR Date of Hearing 24.02.2022 Date of Pronouncement 12.04.2022 ORDER PER KUL BHARAT, JM : The present appeal filed by the assessee for the assessment year 2016- 17 is directed against the order of Ld. CIT(A)-6, Delhi dated 01.07.2019. The assessee has raised following grounds of appeal:- 1. “On the facts and circumstances of the case, the order passed u/s 143(3) by the learned Assessing Officer ("AO") and upheld by the learned Commissioner of Income tax (Appeals)-6 ("CIT(A)") is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the CIT(A) and AO have erred both on facts and in assessing the income of the appellant at an income of Rs.19,53,840 as against income of Rs.14,160 declared by the appellant. 3. That the CIT(A) and AO have erred on facts and in law in holding an addition of an amount on account of bogus purchases of Rs.18,65,080 and commission expenses of Rs.74,603. ITA No.7523/Del/2019 [Assessment Year : 2011-12] Page | 2 4. That the addition has been made grossly indulging in surmises without bringing on any direct evidence against the assessee, only on the basis of presumption and assumptions. 5. That the CIT(A) and AO have erred on facts and in law in not considering the fact that the appellant brought on record all evidences to prove the genuineness of the transactions. 6. That the CIT(A) and AO have erred both on facts and in law in not following the decision of the Hon'ble Supreme Court in the case of PCIT v. Tejua Rohitkumar Kapadia (256 Taxman 213) which held that purchases cannot be treated as bogus where the purchases made by assessee-trader were duly supported by bills and payments were made by account payee cheque, seller also confirmed transaction and there was no evidence to show that amount was recycled back to assessee. 7. Without prejudice, the CIT(A) and AO have erred on facts and in law in not accepting the purchases of the appellant whereas the sales, closing stock and the opening stock emanating from the books of accounts have been duly accepted. 8. That the CIT(A) and AO have erred on facts and in law in holding the transaction as a colorable device despite the same having been done through proper banking channels, as shown by relevant documentary evidences. 9. That the CIT(A) and AO have erred both on facts and in law in making the addition on the basis of material collected at the back of the appellant and without providing an opportunity to rebut the same, thus, violating the principle of natural justice. 10. That the CIT(A) and AO have erred both on facts and in law in making addition on the basis of certain statements recorded without giving assessee an opportunity to cross examine is violation of principle of natural justice. ITA No.7523/Del/2019 [Assessment Year : 2011-12] Page | 3 11. That the CIT(A) and AO have erred both on facts and in law in charging interest under sections 234A, 234B and 234C of the Act. The appellant craves leave to add to, alter, amend or vary the above grounds of appeal at or before the time of hearing.” 2. At the time of hearing, no one appeared on behalf of the assessee. It is seen from the record that since 22.12.2020, no one has been appearing on behalf of the assessee. The notice sent by the Registry through speed post has returned back unserved by the Postal authority with the comment “no such person”. The assessee has not provided current address to the Registry. Therefore, the appeal is taken up for hearing in the absence of the assessee. FACTS OF THE CASE 3. Facts giving rise to the present appeal are that in this case return declaring an income of Rs.14,160/- was filed on 23.09.2016 and was processed u/s 143(1) of the Income Tax Act, 1961 (“the Act”) on 01.10.2016. Thereafter, the Assessing Officer (“AO”) received information on 21.03.2017 from the Investigation Wing, New Delhi. On the basis regarding accommodation entries of Rs.4,53,940/- to M/s Shivji Garments (P.) Ltd. on 05.09.2015. Thereafter, the AO selected the case under compulsory scrutiny and notice was issued to the assessee u/s 143(2) of the Act. In response to the notice, Ld. Authorized representative of the assessee attended the proceedings. The AO noticed that during the year under consideration, the assessee had declared total turn over of Rs.46,51,027/- from the business of sale/purchase of yarn from which total income of Rs.14,160/- has been declared. The AO called upon the assessee to give party-wise details of purchases. In response to that, the assessee submitted the details. Out of these parties, the Assessing Officer noticed that ITA No.7523/Del/2019 [Assessment Year : 2011-12] Page | 4 the assessee has also made purchases from M/s NYR Creations Pvt. Ltd., Rohini, Delhi. Thereafter, the AO proceeded to verify the factum of these purchases from the concerned parties. The AO found that the assessee has taken accommodation entry from M/s. Shivji Garments (P.) Ltd. of Rs.4,53,940/-; from M/s Shivangi garments (P.) Ltd. of Rs.6,23,560/- and also from M/s. NYR Creations (P.) Ltd. of Rs.7,87,580/-. Hence, the AO made addition of these entries and also added the commission of Rs.74,603/-. Hence, the AO assessed the income of Rs.19,53,840/-. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A) who after considering the submissions, dismissed the appeal of the assessee and confirmed the addition. 5. Aggrieved against the order of Ld.CIT(A), the assessee is in appeal before this Tribunal. 6. Ld. Sr. DR supported the orders of the authorities below and submitted that the authorities below have verified the factum of the transaction and given categorical finding regarding transaction being sham. 7. I have heard Ld. Sr. DR and perused the material available on record and gone through the orders of the authorities below. I find that the AO had made verification regarding genuineness of the transaction and reiterated the finding that the transactions were not genuine and have been executed merely for accommodation entries. The assessee has not brought any material to rebut the finding of the Assessing Officer. Hence, I do not see any reason to interfere ITA No.7523/Del/2019 [Assessment Year : 2011-12] Page | 5 in the finding of Ld.CIT(A), the same is hereby dismissed. Grounds raised by the assessee in this appeal are therefore, dismissed. 8. In the result, the appeal of the assessee is dismissed. Order is pronounced in open Court on 12.04.2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER * Amit Kumar * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI Draft dictated 08.04.2022 Draft placed before author 08.04.2022 Approved Draft comes to the Sr.PS/PS Order signed and pronounced on .04.2022 File came to P.S. .04.2022 File sent to the Bench Clerk .04.2022 Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order. Date of uploading on the website .04.2022