ANIL KESHORAM SINGHAL, NAVI MUMBAI V. ITO 22(3)(1), NAVI MUMBAI

ITA 787/MUM/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9794 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 21-12-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 15-02-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ANJU GARODIA
• Keywords: Accommodation entries; Reason to believe
• Section: 143(3); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH J, MUM BAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 787/MUM/2016 (ASSESSMENT YEAR- 2006-07) SHRI ANIL KESHORAM SINGHAL FLAT NO.1, PLOT NO. 39/40, NAVSHIVNERI CHDS LTD., VASHI, NAVI MUMBAI-400703 PAN: AAIPP6817G VS. ITO 28(1)(1) , VASHI, NAVI MUMBAI . (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : MS ANJU GARODIA (DR) DATE OF HEARING : 24.07.2017 DATE OF PRONOUNCEMENT : 24.07.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. THIS APPEAL UNDER SECTION 253 OF INCOME TAX ACT (A CT) IS DIRECTED BY ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF I NCOME-TAX (APPEALS) (THE CIT(A)-26, MUMBAI DATED 06.11.2015 FOR ASSESSMENT Y EAR (AY) 2006-07. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : (1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN JUSTIFYING THE ACTION OF THE A.O. OF REOPE NING OF THE ASSESSMENT U/S 147 R.W. SECTION 148 OF THE INCOME TAX, 1961 FOR A. Y. 2006-07. (2) REASONS GIVEN BY THE LEARNED CIT(A) FOR JUSTIFY ING THE ACTION OF THE A.O. OF REOPENING OF THE ASSESSMENT U/S 147 R.W. SECTION 14 8 OF THE INCOME TAX, 1961 FOR A.Y. 2006-07, ARE WRONG INSUFFICIENT AND CONTRA RY TO THE FACTS AND EVIDENCE ON RECORD ITA NO.787 /M/2016- SHRI ANIL KESHORAM SINGHAL 2 (3) IN VIEW OF THE FACT THAT SANDIP SATANI AND OTHE RS WERE NOT SUMMONED IN EVIDENCE BY THE A.O. INSPITE OF THE REQUEST MADE BY THE APPELLANT, FOR CROSS EXAMINATION, THE A.O. AND THE CIT(A) ARE NOT JUSTIF IED IN LAW TO USE THE EVIDENCE RECORDED BY THIRD PARTY WITHOUT AFFORDING AN OPPORTUNITY TO THE APPELLANT TO CROSS EXAMINE THE SAID PERSONS IN ORDE R TO DRAW AN ADVERSE INFERENCE AND THEREBY ERRED IN CONFIRMING ADDITION OF RS. 15,02,243/-. (4) IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A ERRED IN CONFIRMING THE ADDITION MADE BY A. O. OF R S.15,02,243/- AS A BOGUS COMMISSION. (5) THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER , MODIFY OR OMIT ANY OF THE AFORESAID GROUNDS OF APPEAL AS OCCASION MAY ARISE O F DEMAND. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED RETURN OF INCOME FOR RELEVANT AY ON 29.06.2006 DECLARING TOTAL INCOME OF RS. 7,72,730/-. THE ASSESSMENT WAS RE-OPENED BY ISSUING NOTICE U/S 148 OF THE ACT DATED 01.05.2009. THE ASSESSEE VIDE HIS APPLICATION DATED 25.11.2009 REQUIRED THE REASONS RECORDED U/S 147 OF THE ACT. THE REASON S WERE SUPPLIED. THE ASSESSEE FILED OBJECTION VIDE OBJECTION DATED 16.12 .2010. THE ASSESSMENT WAS COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT ON 2 2.12.2010. THE ASSESSING OFFICER (AO) WHILE FRAMING THE ASSESSMENT ORDER BESIDES THE OTHER ADDITION OF RS. 15,02,243/- ON ACCOUNT OF CO MMISSION PAYMENT. ON APPEAL BEFORE THE LD. CIT(A), THE ACTION OF AO FOR RE-OPENING OF THE ASSESSMENT U/S 147 AS WELL AS ADDITION MADE ON ACCO UNT OF COMMISSION PAYMENT WAS SUSTAINED. THUS, FURTHER AGGRIEVED BY T HE ORDER OF LD. CIT(A), THE PRESENT APPEAL IS FILED BEFORE US. THE APPEAL W AS LISTED TODAY I.E. ON 24.07.2017, NEITHER THE ASSESSEE NOR HIS REPRESENTA TIVE APPEARED DESPITE REPEATED CALLS. AN APPLICATION FOR ADJOURNMENT WAS FILED ON RECORD ON ITA NO.787 /M/2016- SHRI ANIL KESHORAM SINGHAL 3 21/07/2017 ON BEHALF OF ASSESSEE. THE APPLICATION D OES NOT CONTAIN ANY REASON FOR ADJOURNMENT, THE APPLICATION WAS REJECTE D. THE ASSESSEE IS REPEATEDLY SEEKING ADJOURNMENT FROM SEVERAL DATES. THE SUBMISSION OF LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE WA S HEARD. THE LD. DR FOR THE REVENUE ARGUED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF LIAISON WORK (LIAISON PROFESSION), THE ASSESSEE HAS SHOWN MAJOR EXPENDITURE ON ACCOUNT OF PAYMENT OF COMMISSION PAY MENT AND FOREIGN TRAVEL EXPENSES. THE ASSESSEE HAS SHOWN TO HAVE MAD E THE COMMISSION OF RS. 15,02,243/- TO M/S NISHCAL CORPORATE SERVICE PV T. LTD., A SURVEY WAS CONDUCTED AT THE PREMISES OF M/S NISHCAL CORPORATE SERVICE PVT. LTD. ON 24.06.2008. IN THE SURVEY, IT WAS REVEALED THAT THE RE WERE TWO DIRECTORS IN TWENTY PRIVATE COMPANIES AND ALSO PROPRIETOR OF VAR IOUS CONCERNS. THOSE PERSONS WERE NOT HAVING ANY MEANS OF FINANCE AND PR OPERTIES OF VARIOUS CONCERNS. ONE MR. SANDEEP SITANI, CHARTERED ACCOUNT ANT (CA) WAS MANAGING THE ENTIRE AFFAIRS OF ALL THE COMPANIES AN D FIRMS INCLUDING OF M/S NISHCAL CORPORATE SERVICE PVT. LTD . BOTH THE DIRE CTORS WERE PAID MONTHLY REMUNERATION @ 3% TO 5% FOR PROVIDING ADDRESS AND C ONTACT NUMBERS. DURING THE SEARCH, IT WAS ALSO REVEALED THAT ASSESS EE HAS TAKEN HAWALA/ ACCOMMODATION ENTRIES OF RS. 15,02,243/- FROM THE C OMPANY CONTROLLED BY MR. SANDEEP SITANI CA. IT WAS ARGUED THAT IN FACT T HERE WAS NO COMMISSION PAYMENT AND IT WAS MERELY A HAWALA ENTRY. THE LD. D R FOR THE REVENUE ITA NO.787 /M/2016- SHRI ANIL KESHORAM SINGHAL 4 RELIED UPON THE DECISION OF TRIBUNAL IN BLEND FINAN CIAL SERVICES PVT. LTD. VS. ACIT IN ITA NO. 6814/MUM/2011 DATED 19.04.2013. 3. WE HAVE CONSIDERED THE SUBMISSION OF LD. DR FOR THE REVENUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A SURVEY U/S 133 OF THE ACT WAS CONDUCTED AT THE PREMISES OF M/S NUPUR MANAGEMENT C ONSULTANTS PVT. LTD. ON 24.06.2008. DURING THE SURVEY, IT WAS REVEALED T HAT COMPANY WAS FLOATED BY TWO DIRECTORS NAMELY SHRI PRADEEP PRAJAP ATI AND SHRI DINANATH YADAV. DURING THE SURVEY, IT WAS FOUND THAT DIRECTO RS HAS NO MEANS OF FINANCE OR BACKGROUND, THOUGH, THEY WERE DIRECTORS OF TWENTY COMPANIES AND PROPRIETORS OF VARIOUS PROPRIETORSHIP CONCERNS. MR. SANDEEP SITANI SIGNING ALL DOCUMENTS IN OPENING BANK ACCOUNTS INCL UDING M/S NISHCAL CORPORATE SERVICE PVT. LTD. FURTHER, IT WAS REVEALE D THAT ASSESSEE HAS SHOWN BUSINESS RELATIONSHIP WITH GROUP COMPANIES MA NAGED BY MR. SANDEEP SITANI AND THE ASSESSEE HAS AVAILED BOGUS/H AWALA ENTRY OF RS. 15,02,243/-. ON THE BASIS OF INFORMATION, THE ASSES SEE WAS SERVED THE FOLLOWING REASONS OF RE-OPENING: 'THE INFORMATION IS RECEIVED FROM A.C.I. T, CIR-2, THANE VIDE 'LETTER DATED 28.11.2008 THAT OUT ASSESSEE SHRI ANIL SINGHAL MADE PAYMENT OF RS.15,02,243/- TO M/S. NISCHAL CORPORATE SERVICES P VT. LTD. IS BOGUS ON ACCOUNT OF COMMISSION. THE DIRECTOR OF THE COMPANY SHRI DINANATHA YADAV AN D SHRI PRADEEP PRAJAPATI OF M/S. NISCHAL CORPORATE SERVICES PVT. LTD. ADMITT ED DURING THE ASSESSMENT PROCEEDINGS OF A.Y. 2006-07 THAT THE COMPANY WAS ON LY ISSUING BILLS AND NO SERVICES HAVE BEEN RENDERED BY HIM. ON RECEIPT OF T HE PAYMENT BY CHEQUE CASH WAS RETURNED TO PARTY AFTER DEDUCTING A CERTAIN PER CENTAGE AS COMMISSION. ITA NO.787 /M/2016- SHRI ANIL KESHORAM SINGHAL 5 IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT THE ASSESSEE HAS ESCAPED INCOME TO THE TUNE OF RS. 15,04,243/-. THE CASE IS DEEMED FIT FOR REOPENING U/S 147 OF THE I.T. ACT. IF APPROVED, NOTICE U/S 148 CAN BE ISSUED.' 4. THE STATEMENT OF ASSESSEE WAS ALSO RECORDED ON 22. 12.2010, THE ASSESSEE IN HIS STATEMENT DENIED THAT HE AVAILED ANY HAWALA TRANSACTION WITH THE CONCERN MANAGED BY MR. SANDEEP SITANI. HOWEVER, THE CONTENTION OF ASSESSEE WAS NOT ACCEPTED BY THE AO HOLDING THAT NO AGREEMENT ON CONFIRMATION WITH THE COMPANY TO WHOM THE COMMISSIO N WAS PAID IS FILED AND THAT MR. SANDEEP SITANI IS STRANGER TO THE ASSE SSEE. THE LD. CIT(A) UPHELD THE ADDITION HOLDING THAT ENOUGH DETAILS HAV E BEEN GATHERED BY THE INVESTIGATION TEAM OF INCOME-TAX DEPARTMENT. M/S NI SHCAL CORPORATE SERVICE PVT. LTD. WAS ISSUING ONLY BILLS TO THE VAR IOUS PARTIES AND THE MONEY WHICH HAS BEEN PAID HAS BEEN RETURNED TO THE BENEFICIARY AFTER A COMMISSION FOR THE SERVICES RENDERED HAS BEEN DEDUC TED. THE CRUCIAL EVIDENCE GATHERED BY THE INVESTIGATION WING CANNOT BE IGNORED. FURTHER THE ASSESSEE HAS FAILED TO SHOW THAT AS TO WHAT SHORT O F SERVICES WERE PROVIDED BY M/S NISHCAL CORPORATE SERVICE PVT. LTD. FOR WHIC H THE PAYMENT WAS MADE. THE LD. CIT(A) ALSO EXAMINED THE VALIDITY OF RE-OPENING OF THE ASSESSMENT PROCEEDING. THE LD. CIT(A) WHILE EXAMINI NG THE VALIDITY OF RE- OPENING OF THE ASSESSMENT OBSERVED THAT THE ASSESSE E HAS NOT FILED ANY OBJECTION AGAINST THE RE-OPENING. BEFORE, US THE N EITHER THE ASSESSEE HAS COME FORWARD TO SUBSTANTIATE HIS CLAIM NOR FILED AN Y DOCUMENTARY EVIDENCE ITA NO.787 /M/2016- SHRI ANIL KESHORAM SINGHAL 6 TO SUBSTANTIATE HIS CLAIM. THUS, WE FIND FORCE IN T HE SUBMISSION OF THE LD. DR FOR THE REVENUE AND HAVE NOT FIND ANY ILLEGALIT Y OR INFIRMITY IN BOTH THE SUBSTANTIAL GROUND OF APPEAL RAISED BY ASSESSEE I.E. AGAINST THE RE- OPENING OF THE ASSESSMENT AS WELL AS FOR CONFIRMING THE ADDITION OF RS.15,02,243/- ON ACCOUNT OF COMMISSION PAYMENT. 5. IN THE RESULT, APPEAL FILED BY ASSESSEE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH DAY OF JULY 2017. SD/- SD/- ( RAJENDRA ) (PAWAN SING H) ACCOUNTANT MEMBER JU DICIAL MEMBER MUMBAI; DATED 24 /07/2017 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/