R.W. PROMOTIONS P.LTD, V. ASST CIT 9(3),

MA 194/MUM/2013

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3288 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 14 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 25-10-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 29-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AGSHAR JAIN V P SR
• Assessee Lawyers: PRADEEP KAPASI
• Keywords: Principle of natural justice; Accommodation entries

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUM BAI .. , , BEFORE SHRI I.P. BANSAL, JM AND SHRI SANJAY ARORA, AM M.A. NO. 194/MUM/2013(ASSESSMENT YEAR: 2007-08) (ARISING OUT OF I.T.A. NO. 3969/MUM/2012) M/S. R.W. PROMOTIONS PVT. LTD. , M-30, HIRNEN SHOPPING CENTRE, M.G.ROAD, GOREGAON (WEST), MUMBAI-400062 / VS. ACIT- (9)(3), MUMBAI. ./ ./PAN/GIR NO. AACCR7660J ( /APPLICANT ) : ( ! / RESPONDENT ) $% ' / APPLICANT BY : SHRI PRADEEP KAPASI ' / RESPONDENT BY : SHRI AGSHAR JAIN V.P. SR. A.R. ' , / DATE OF HEARING : 22.05.2015 ' , / DATE OF PRONOUNCEMENT : 12.06.2015 / O R D E R PER SANJAY ARORA, A. M.: THIS IS A PETITION U/S. 254(2) OF THE INCOME-TAX AC T, 1961 (THE ACT HEREINAFTER) PREFERRED BY THE ASSESSEE-APPELLANT, DIRECTED AGAIN ST THE ORDER U/S. 254(1) DATED 16.01.2013 PASSED BY THE TRIBUNAL DISPOSING ITS CA PTIONED APPEAL. 2. THE MISCELLANEOUS APPLICATION ASSAILS THE IMPUGN ED ORDER ON SEVERAL GROUNDS, RAISING LEGAL AND FACTUAL ISSUES. IN FACT, THE APPL ICATION IS ARGUMENTATIVE, RAISING M.A.NO.194 MUM 2013 M/S. R.W. PROMOTIONS PVT. LTD 2 SEVERAL CONTENTIONS, SOME OF WHICH WE FIND AS OUTRI GHT RELEVANT. IT MAY THEREFORE BE, AT THE OUTSET, EVEN AS WAS DURING THE HEARING (OF T HE INSTANT PROCEEDINGS), CLARIFIED THAT THERE IS NO SCOPE FOR RE-ARGUING THE APPEAL IN RECTIFICATION PROCEEDINGS, WHICH WOULD THUS STAND TO BE CONFINED TO CLEAR MISTAKES O F FACT/S OR EVEN OF LAW. WE HAVING CLARIFIED THE PREMISES AND THE SCOPE OF THE PRESENT PROCEEDINGS, PROCEED TO DISCUSS THE ISSUE RAISED BY THE ASSESSEE, IN SERIATIM: 3. THE FIRST GROUND (NUMBERED 3) STATES OF THE ASSE SSEE HAVING NOT BEEN PROVIDED THE COPY OF THE REASONS RECORDED FOR RE-OPENING OF ASSESSMENT U/S. 147, BUT ONLY THE GIST THEREOF. WITHOUT DOUBT, THE REASONS CANNOT BE IMPROVED UPON IN ANY MANNER, OF WHICH THERE IS IN FACT NO ALLEGATION OR CHARGE, EIT HER IN THE APPEAL OR IN THE PRESENT PROCEEDINGS. IT IS, FIRSTLY, DEBATABLE THAT WHERE T HE ASSESSEE IS INFORMED OF THE REASONS FOR RE-OPENING OF ASSESSMENT, THOUGH EMPLOYING DIFF ERENT WORDS, CONVEYING THE SAME MEANING AND INFORMATION, WOULD THE REQUIREMENT OF I NFORMING THE ASSESSEE OF THE REASONS BE SATISFIED? THE REQUIREMENT IS PROCEDURAL , WITH A VIEW TO INFORMING THE ASSESSEE OF THE REVENUES CASE AGAINST IT, SO THAT, WOULD NOT, SECONDLY, EVEN ASSUMING STRICT COMPLIANCE, SO THAT THE REASONS HAD TO CONVE YED VERBATIM, LEAD TO THE QUASHING OF THE ASSESSMENT ( OR RE-ASSESSMENT) OR ITS RESTOR ATION TO SUCH WHERE THE IRREGULARITY HAD CREPT IN ( GUDUTHUR BROS. V. ITO [1960] 40 ITR 298 (SC). THE FORGOING TWO ISSUES STAND NOTICED BY US ONLY TO EXHIBIT THE DEBATABLE N ATURE OF THE CONTROVERSY OR THE ISSUES RAISED, IMPERMISSIBLE U/S. 254(2). ON FACTS, THE TRIBUNAL HAD CLEARLY STATED THAT THE ASSESSEE HAD BEEN IN FACT SUPPLIED THE VERBATIM COPY OF THE REASONS, REPRODUCING THE SAME AT PARAGRAPH 2 (PAGE 2) OF ITS ORDER. THE TRIBUNALS FINDINGS APPEAR AT PARAGRAPH 2.8 OF THE IMPUGNED ORDER. THE OMISSION O F THE LAST SENTENCE IS NOT A REASON ITSELF, BUT ONLY THE CONCLUDING SENTENCE, ST ATING OF THE FOREGOING AS BEING THE REASONS FOR BELIEF AS TO ESCAPEMENT OF INCOME. INAS MUCH AS THE SAME DOES NOT BEAR ANY REASON, WE DO NOT FIND THAT IT COULD BE SAID TH AT THE ASSESSEE HAD NOT BEEN CONVEYED THE REASONS AS TO ESCAPEMENT OF INCOME, OR HAD BEEN SO EITHER IN PART OR ONLY THE GIST THEREOF, AS ALLEGED. THAT THE SAME AR E ONLY REASONS LEADING TO THE BELIEF AS TO THE ESCAPEMENT OF INCOME IS EVIDENT AND IMPLI ED. WHAT ARE THESE THEN AND FOR AND TOWARD WHAT ARE THEY BEING GIVEN, OR GIVEN AS, ETC. WOULD BE THE QUERIES ARISING OUT OF THE ASSESSEES CLEARLY UNREASONABLE AND UNCO NVINCING STAND. FURTHER, EVEN M.A.NO.194 MUM 2013 M/S. R.W. PROMOTIONS PVT. LTD 3 ASSUMING, WITHOUT ADMITTING, A DEBATE, IT WOULD PRE CLUDE SECTION 254(2). THE SAID GROUND IS ACCORDINGLY REJECTED. 4. VIDE GROUND 3(II), THE ASSESSEE CLAIMS NON-APPLI CATION OF MIND BY THE ASSESSING OFFICER (AO) IN THE MATTER, WHO HAS STATE D TO HAVE REOPENED SIMPLY ON THE BASIS OF THE FINDINGS OF THE DDIT(INV.). THE TRIBUN AL DISCUSSES THIS ASPECT AT PARAGRAPH 2.11 THROUGH 2.15 OF ITS ORDER, MEETING T HE ASSESSEES ARGUMENTS, TO HOLD THAT THERE WAS MATERIAL AVAILABLE WITH THE AO ON TH E BASIS OF WHICH A REASONABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAD ESCAPED AS SESSMENT COULD BE FORMED (PARAGRAPH 2.12). THE SAME IS A FINDING OF FACT, AN D FOR WHICH THE TRIBUNAL TRANVERSES, AS APPARENT FROM THE DISCUSSION, THROUGH THE SAID M ATERIALS, ISSUING ITS FINAL FINDINGS AT PARAGRAPH 2.15. THE ASSESSEE HAS ALSO, VIDE GROU ND 3(III) REFERRED TO THE TRIBUNALS OBSERVATION THAT ASSESSMENT HAD BEEN REOPENED ON TH E BASIS OF SECTION 132(4) STATEMENT MADE AT THE TIME OF SEARCH WHICH WAS ON O ATH (AT PARAGRAPH 2.14). IT IS STATED THAT IN SO STATING, THE TRIBUNAL HAS OVERLOO KED THAT THERE WAS A SURVEY AT THE VENDORS PREMISES PRIOR TO THE RELEVANT SEARCH. HOW WOULD, WE WONDER, THAT CONTRADICT OR IMPUGN THE SAID OBSERVATION BY THE TR IBUNAL IN ANY MANNER ? WHAT THE TRIBUNAL STATES IS AGAIN A MATTER OF FACT, BORNE OU T BY THE REASONS RECORDED AND THE MATERIAL ON RECORD. TWO, THE FACT THAT THE SEARCH W AS PRECEEDED BY A SURVEY, ON THE CONTRARY, IS DEFEATING OF THE ASSESSEES CASE INASM UCH AS, CLEARLY, MATERIAL WAS FOUND IN SURVEY LEADING TO THE SEARCH. THE STATEMENT BY T HE TRIBUNAL, IT MUST BE APPRECIATED, WAS MADE WHILE CONSIDERING THE ASSESSEES PLEA OF T HERE BEING NO MATERIAL FOR FORMING, PRIMA-FACIE , A REASONABLE BELIEF AS TO ESCAPEMENT OF INCOME. W HETHER, RATHER, THERE IS MATERIAL ON RECORD ESTABLISHING TH E SAID SURVEY IS ITSELF NOT KNOWN, FOR THE ASSESSEE TO HAVE RAISED THE PLEA, WHICH THOUGH WE HAVE FOUND AS IRRELEVANT. THE GROUND IS WITHOUT BASIS. 5. VIDE GROUND 4, THE ASSESSEE RAISES SEVERAL FACTU AL ISSUES, OR, RATHER, SUB-ISSUES. EACH OF THESE, IN OUR VIEW, AMOUNT TO RE-ARGUING TH E APPEAL. THE TRIBUNAL CONFIRMED THE DISALLOWANCE OF EXPENDITURE BOOKED IN FAVOUR OF THE TWO CONCERNS, M/S. INORBIT MARKETING AND SERVICES PVT. LTD. AND M/S. NUPUR MAN AGEMENT CONSULTANCY PVT. LTD., IN VIEW OF LACK OF SUBSTANTIATION OF THE ACTU AL RENDERING OF THE SERVICES, I.E., FOR M.A.NO.194 MUM 2013 M/S. R.W. PROMOTIONS PVT. LTD 4 WHICH THE SUMS HAD BEEN PAID TO THEM. THERE IS NO THING TO SHOW THAT THE OVERWHELMING EVIDENCES, AS STATED BY THE ASSESSEE , HAD NOT BEEN CONSIDERED BY THE TRIBUNAL. ON THE CONTRARY, THE TRIBUNAL FOUND MATER IAL ON THE BASIS OF WHICH IT STOOD, IN ITS VIEW, ESTABLISHED THAT THE TWO CONCERNS WERE SH ELL COMPANIES, WHO HAD GIVEN ACCOMMODATION ENTRIES TO THE ASSESSEE. IN FACT, THE RE WERE 53 OTHER PARTIES, I.E., AS THE ASSESSEE, WHO HAD SURRENDERED INCOME CONSEQUENT TO THE SEARCH (A NUMBER WHICH THE ASSESSEE CONFIRMS TO BE AT 21, I.E., INSTEAD OF 53) . IN FACT, RATHER THAN THE ASSESSEE PROVING THE EXPENDITURE, AS WE SEE IT, THE TRIBUNAL CONSIDERED THE SAME TO HAVE BEEN DISPROVED. THE RELEVANT DISCUSSION APPEARS AT PARAG RAPHS 3 THROUGH 3.14 (PAGES 18- 30) OF THE TRIBUNALS ORDER. THAT DOCUMENTARY EVIDE NCES MAY NOT BY THEMSELVES BE SUFFICIENT AND COULD BE UNVEILED BY THE ASSESSING A UTHORITY, IS TRITE LAW, AND FOR WHICH REFERENCE MAY BE MADE TO THE DECISIONS IN THE CASE OF CIT V . DURGA PRASAD MORE [1973] 82 ITR 540 (SC) AND SUMATI DAYAL V. CIT [1995] 214 ITR 801 (SC), WHILE THE TRIBUNAL REFERS TO THE DECISIONS IN THE CASE LACHMINARAYAN MADANLAL V. CIT [1972] 86 ITR 439 AND LAKSHMIRATAN COTTON MILLS CO. LTD. V. CIT [1969] 73 ITR 634 (SC) . EACH OF THE ARGUMENTS RAISED BY THE ASSESSEE STAND DULY CONSIDERED BY THE TRIBUNAL. FINDING/S OF FACT, RENDERED UPON APPRECIATION OF EV IDENCES, COULD NOT BE REVISITED IN RECTIFICATION PROCEEDINGS. WE, ACCORDINGLY, FIND NO GROUND FOR THE SAME. 6. VIDE GROUND 5, THE ASSESSEE CLAIMS THAT THERE WA S DENIAL OF OPPORTUNITY TO CROSS-EXAMINE THE AOS WITNESSES AND, THUS, A VIOLA TION OF THE PRINCIPLE OF NATURAL JUSTICE, FURTHER STATING THAT THE TRIBUNAL HAD, IN LIKE CASES, RESTORED THE MATTER BACK TO THE FILE OF THE AO ON THAT GROUND. COULD, ONE MAY ASK, THE SAID ORDERS BY THE TRIBUNAL QUESTIONED ON THE BASIS OF A DIFFERENT VIEW IN THE IMPUGNED ORDER ? THE ARGUMENT IS MISPLACED. FOR ALL WE KNOW, THE CROSS-EXAMINATION M AY NOT HAVE BEEN ASKED FOR, BEING IN THE NATURE OF DEPOSITION/S. THE TRIBUNAL H AS CONSIDERED THE ARGUMENT (REFER PARA 3.10), AND IN ITS VIEW THE DISALLOWANCE HAD NO T BEEN AFFECTED ONLY ON THE BASIS OF THE SAID STATEMENTS AND, TWO, THAT ALL THE MATERIAL HAD BEEN DULY CONFRONTED TO THE ASSESSEE. IT ALSO CLEARLY STATES THAT THE RENDERING OF THE SERVICES BY THE COMPANIES COULD NOT BE ACCEPTED ON THE BASIS OF AFFIDAVITS (P ARA 3.11). THE SAID GROUND IS, AGAIN, WITHOUT MERIT. M.A.NO.194 MUM 2013 M/S. R.W. PROMOTIONS PVT. LTD 5 7. IN THE RESULT, THE ASSESSEES M.A. IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON JUNE 12, 2015 SD/- SD/ - (I.P. BANSAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; 1 DATED : 12.06.2015 . ./SHARWAN . PS '# $# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPLICANT 2. ! / THE RESPONDENT 3. 2 ( ) / THE CIT(A) 4. 2 / CIT - CONCERNED 5. 3 6 , , 6 , / DR, ITAT, MUMBAI 6. $ / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI