PRIDE STEELS P LTD, MUMBAI V. DCIT CEN CIR 10, MUMBAI

ITA 7707/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2372 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 17-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 26-12-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R AHUL RAMAN
• Keywords: Bogus purchase; Business income; Search and seizure; Accommodation entries
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH H ,MUMBAI BEFORE SHRI R.C.SHARMA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.7707/MUM/2014 (ASSESSMENT YEAR : 2007-08) M/S PRIDE STEELS PVT. LTD. FLAT NO. 109, ASHIRWAD BUILDING, AHEMDABAD STREET, MASJID(E), MUMBAI-400009. PAN: AAACP2140B VS. ACIT-25(2), R. NO. 108, 1 ST FLOOR, PRATYAKSKAR BHAVAN, BKC, MUMBAI-400012. (APPELLANT) (RESPONDENT) ITA NO.7711/MUM/2014 (ASSESSMENT YEAR : 2011-12) M/S PRIDE STEELS PVT. LTD. FLAT NO. 109, ASHIRWAD BUILDING, AHEMDABAD STREET, MASJID(E), MUMBAI-400009. PAN: AAACP2140B VS. ACIT-25(2), R. NO. 108, 1 ST FLOOR, PRATYAKSKAR BHAVAN, BKC, MUMBAI-400051. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI RAHUL RAMAN (CIT-DR) DATE OF HEARING : 17.10.2016 DATE OF PRONOUNCEMENT : 19.10.2016 O R D E R PER PAWAN SINGH, JM: 1. THESE TWO APPEAL U/S 253 OF THE INCOME-TAX ACT ARE DIRECTED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-37, MUMBAI DATED 16.10. 2014 FOR ASSESSMENT YEAR (AY) 2007-08 & 2011-12 RESPECTIVELY. AS BOTH T HE APPEALS ARE BASED 2 ITA NO. 7707 & 7711/M/2014- M/S PRIDE STEELS PVT. L TD. ON COMMON GROUNDS OF APPEAL, HENCE, BOTH THE APPEAL WERE CLUBBED, HEARD AND ARE BEING DECIDED BY COMMON ORDER. FIRST WE SHA LL TAKE UP THE ITA NO. 7707/MUM/2014 FOR AY -2007-08. 2. A SEARCH AND SEIZURE ACTION U/S 132(1) OF THE ACT W AS CONDUCTED IN CASE OF RUSTOMJEEEVERSHINE GROUP ON 20.10.2010 WHEREIN CER TAIN PAPERS/EVIDENCE IN THE NAME OF ASSESSEE WAS FOUND. A NOTICE U/S 133A R.W.S 153C WAS ISSUED TO THE ASSESSEE. ASSESSEE FILED RET URN OF INCOME IN RESPONSE TO THE SAID NOTICE ON 31.03.2013 DECLARING THE SAME INCOME AS PER ORIGINAL RETURN OF INCOME FILED. WHILE MAKING THE A SSESSMENT, THE AO NOTIED THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF TRADING/SUPPLY OF IRON & STEEL PRODUCTS SUCH AS M.S. PLATE, SHEET, PIPES AND DURING THE SEARCH PROCEEDING OF RUSTOMJEE GROUP, IT WAS FOUND THAT AS SESSEE ALONG WITH ITS SISTER CONCERN M/S PAWAN JYOTI STEELS PRIVATE LTD. ISSUED ACCOMMODATION BILLS. IT WAS ALSO OBSERVED THAT NO VOUCHERS WERE S UPPORTED FOR THE GOODS RECEIPTS, DELIVERY CHALLAN, WEIGH BRIDGE CHALLAN OR TRANSPORT BILL, THE STATEMENT OF SHRI DEHIMAT CHOKSHI WAS ALSO RECORDED IN THE SEARCH PROCEEDING OF RUSTOMJEE. AS PER THE STATEMENT OF DI RECTOR OF RUSTOMJEE GROUP, THE ACCOMMODATION ENTRIES IN THE FORM OF SAL ES TO THE TUNE OF RS. 1.92 CRORE ON WHICH COMMISSION @ 2% WAS RETAINED BY ASSESSEE-COMPANY AND ITS SISTER CONCERN. ON THE BASIS OF ITS OBSERVA TION OF THE AO, THE ASSESSEE-COMPANY WAS ASKED TO PROVIDE THE SALES AND PURCHASE DETAILS. THE ASSESSEE-COMPANY FAILED TO PROVIDE THE SAME AND THE AO MADE THE ADDITION OF RS. 43,29,415/- HOLDING THAT TOTAL SALES AS PER AUDITED PROFIT & LOSS A/C THERE IS TOTAL SALES OF RS. 18.16 CRORE ON WHICH NE T PROFIT WAS ESTIMATED AT 2.5%, THUS ADDITION OF RS. 43,29,415/- WAS WORKED O UT. AGGRIEVED BY THE ORDER OF AO, THE ASSESSEE FILED APPEAL BEFORE THE C IT(A) WHEREIN THE ADDITION WAS SUSTAINED. FURTHER AGGRIEVED BY THE OR DER OF CIT(A) ASSESSEE FILED PRESENT APPEAL BEFORE THIS TRIBUNAL. 3 ITA NO. 7707 & 7711/M/2014- M/S PRIDE STEELS PVT. L TD. 3. THE CASE CAME UP FOR HEARING ON 17.10.2016 BUT NONE HAS APPEARED ON BEHALF OF THE ASSESSEE, DESPITE SERVICE OF NOTICE T HROUGH LD. DEPARTMENTAL REPRESENTATIVE (DR) ON THE ADDRESS PROVIDED BY ASSE SSEE IN FORM-36 (APPEAL FORM). THE LD. DR FOR REVENUE ALSO FURNISHE D THE PROOF OF SERVICE AT THE GIVEN ADDRESS IN THE FORM OF ACKNOWLEDGEMENT . AS NOBODY APPEARED DESPITE SERVICE AND WAITING FOR SUFFICIENT TIME TIL L 1 P.M. WE LEFT NO OPTION EXCEPT TO PROCEED FURTHER AND TO HEAR THE LD. DR FO R REVENUE. THE LD. DR FOR REVENUE ARGUED THAT THE ASSESSEE WAS FOUND ENGA GED IN PROVIDING ACCOMMODATION ENTRIES FOR SUPPLY OF IRON & STEEL PR ODUCTS SUCH AS M.S. PLATE, SHEET, PIPES. DURING THE SEARCH AND SURVEY P ROCEEDINGS, THE ASSESSEE- COMPANY ALONG WITH ITS SISTER CONCERN WERE FOUND IN VOLVED IN PROVIDING ACCOMMODATION ENTRIES IN THE NAME OF BOGUS PURCHASE TO RUSTOMJEE- EVERSHINE GROUP. THE ASSESSEE-COMPANY ISSUED ACCOMM ODATION BILL TO M/S RUSTOMJEE GROUP AND A NUMBER OF INVOICES/BILLS WERE FOUND UNSIGNED. DURING THE ASSESSMENT PROCEEDING, THE ASSESSEE FAIL ED TO PROVIDE SALES AND PURCHASE DETAILS DESPITE GIVING SUFFICIENT OPPORTUN ITIES. THE AO PASSED A VERY REASONED ORDER AFTER GIVING SUFFICIENT OPPORTU NITY TO THE ASSESSEE AND NOMINAL ADDITION @ 2.5% ON THE BASIS OF TOTAL SALES AS PER P&L A/C WAS MADE WHICH WAS SUSTAINED BY LD. CIT(A). THE LD. DR FOR THE REVENUE FURTHER ARGUED THAT THE ORDER OF AUTHORITIES BELOW ARE REASONED ONE AND DOES NOT REQUIRE ANY INTERFERENCE FROM THE TRIBUNAL. 4. WE HAVE CONSIDERED THE CONTENTION OF LD. DR FOR REV ENUE AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW, PARTICULARLY IN AB SENCE OF ANY REPRESENTATION ON BEHALF OF THE ASSESSEE. WE HAVE SEEN THAT BEFORE THE AO, THE ASSESSEE FAILED TO SUBSTANTIATE THE SALES AND PURCHASE DETAI LS DESPITE OPPORTUNITY TO THE ASSESSEE. THE AO CONSIDERED THE AUDITED BOOKS O F ACCOUNT OF ASSESSEE WHEREIN THE TOTAL SALES AT RS. 18.16 CRORE WERE REC ORDED ON WHICH A VERY MEAGER PROFIT I.E. 2.5% WAS ESTIMATED. CONSIDERING THE FACT THAT ASSESSEE IS ENGAGED IN PRACTICE OF PROVIDING ACCOMMODATION ENTR Y FOR EVASION OF 4 ITA NO. 7707 & 7711/M/2014- M/S PRIDE STEELS PVT. L TD. INCOME-TAX. THE LD. CIT(A) AFTER CONSIDERING THE SU BMISSION OF THE ASSESSEE AS NO BOOKS WERE PRODUCED BEFORE THE AO. THE LD. CI T(A) CONSIDERING THE SUBMISSION OF THE ASSESSEE CONCLUDED THAT SECTION 1 45(3) SPEAK THE SITUATION WHERE THE AO IS NOT SATISFIED ABOUT THE CORRECTNESS OF THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE RETURN OF ASSESSEE WAS BASED O N THE AUDITED ACCOUNT DESPITE THAT ASSESSEE WAS UNABLE TO SUBSTANTIATE IT S ACCOUNT BY PRODUCING BOOKS AND BASIC RECORDS. LD. CIT(A) FURTHER CONCLUD ED THAT PURCHASES AND SALES OF THE ASSESSEE ARE BOGUS, THUS, NO FAULT CAN BE FOUND IN THE ORDER OF AO IN REJECTING THE BOOKS OF ACCOUNTS OF ASSESSEE A ND CONFIRMED THE ADDITION. THE ORDER OF AUTHORITIES BELOW ARE REASON ED ONE AND WE DO NOT FIND ANY INFIRMITY OR ILLEGALITY IN THE ORDER PASSE D BY LD. CIT(A), HENCE, THE APPEAL OF THE ASSESSEE IS REJECTED. ITA NO. 7711/MUM/2014 AY-2011-12 5. IN THIS APPEAL, THE ASSESSEE RAISED IDENTICAL GROUN DS OF APPEAL THE FACTS OF THIS AY ARE ALSO IDENTICAL. HENCE, THIS APPEAL OF A SSESSEE IS ALSO DISMISSED WITH SIMILAR OBSERVATION. 6. IN THE RESULT, APPEALS OF THE ASSESSEE FOR BOTH THE AYS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH OCTOBER, 2016. SD/- SD/- (R.C.SHARMA) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 19/10/2016 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/