KHYATI SALES AGENCY PVT. LTD., MUMBAI V. D.C.I.T. CENT. CIR. - 8(1), MUMBAI

MA 22/MUM/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 7759 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-07-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2009-2010
• Appeal Filed On: 14-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Opportunity of cross examination; Third party statement; Accommodation entries
• Section: 22; 153C; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE S/SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND S/SHRI AMARJIT SINGH, JUDICIAL MEMBER M.A. N O S . 22 TO 25/ M/20 20 (ARISING OUT OF ITA NO S . 7105 /MUM/201 7, 7106/M/2017, 7107/M/2017 & 7108 /M/20 17 ) ( / ASSESSMENT YEAR S : 2006 - 07 TO 2009 - 10 ) KHYATI SALES AGENCY PVT. LTD. B - 11, DAHISAR GAURAV, H. JOSHI MARG, DAHISAR (E), MUMBAI - 400068 . / VS. DCIT, CENT. CIR - 8(1) AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400020. / . / . PAN/GIR NO. : AACCK1949B ( / APPELLANT ) / APPLICANT .. ( / RESPONDENT ) / DATE OF HEARING: 06/ 0 3 / 2 020 /DATE OF PRONOUNCEMENT: 24 /0 7 / 2020 ORDER PER AMARJIT SINGH, J M THESE ORDER S SHALL DISPOSE OF THE MISCELLA N EOUS APPLICATION S BEARING NO S. 22 /M/20 20TO 25 /M/20 20 MOVED BY APPLICANT ARISING OUT OF ITA. NO S . 7105 /M/20 17 TO 7108/M/2017 FOR THE A.Y S. 2006 - 07 TO 2009 - 10 DATED 23.05.2019 . MA . NO.22/M/2020 2. THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN FILED BY APPLICANT/ASSESSEE IN CONNECTION WITH THE ORDER PASSED BY THE HONBLE TRIBUNAL MUMBAI BENCH F DATED 25.03.2019 ARISING OUT OF ITA. NO.7105/M/2017 FOR THE A.Y. 2006 - 07. ASSESSEE BY: SHRI AJAY SINGH REVENUE BY: SHRI V. JUSTIN (DR) MA NOS.22 TO 25 / MUM/20 20 3 . THE BRIEF FACTS OF THE PRESENT MISCELLANEOUS APPLICATION ARE THAT THE APPEAL BEARING ITA. NO. 7105/M/2017 RELEVANT TO THE A.Y.2006 - 07 HAS BEEN DISPOSED BY HONBLE MUMBAI TRIBUNAL BENCH F BY VIRTUE OF ORDER DATED 25.03.2019. THE APPEAL PERTAINS TO THE ADDITION OF RS. 2,34,52,668/ - U/S 68 OF THE INCOME TAX ACT, 1961 ON THE BASIS OF THIS FACT THAT THE COMPANY WAS DEALING IN PROVIDING THE ACCOMMODATION ENTRIES. THE ADDITION WAS RAISED ON A CCOUNT OF THIRD PARTY STATEMENT. THE ASSESSEE ALTERNATE PLEA WAS THAT THE ASSESSEE WAS EARNING THE COMMISSION BY PROVIDING ACCOMMODATION ENTRIES, THE ONLY AMOUNT OF COMMISSION COULD BE ADDED TO THE ASSESSEES TAXABLE INCOME AND NOT ENTIRE AMOUNT OF TRANSACTION. IN BRIEF, THE SEARCH WAS CONDUCTED IN THE CASE OF M/S. JIK INDUSTRIES LTD. THE STATEMENT OF SHRI DILIPJAYANTILAL SHAH WAS RECORDED ON 04.02.2011. I T WAS STATED THAT THE APPLICANT USED TO ISSUE ACCOMMODATION ENTRIES ON COMMISSION BASIS @ 0. 02% TO 0.10% . O N THE BASIS OF THE SAID INFORMATION , THE NOTICED U/S 153C OF TH E ACT WAS ISSUED. THE ASSESSMENT U/S 153C WAS COMPLETED TREATING THE 4% AS INCOME. SUBSEQUENTLY, THE PCIT - 4 PASSED THE ORDER U/S 263 OF THE ACT AND THEREAFTER THE ASSESSMENT U/S 144/142(1) R.W.S. 153C OF THE ACT WAS COMPETED BY ASSESSING THE 100% ADDITION I.E. IN SUM OF RS. 2,34,52,668/ - . THE CIT(A) UPHELD THE DISALLOWANCE . T HE APPLICANT/APPELLANT HAD PRODUCED THE ORDER OF CO - ORD INATE BENCH IN THE CASE OF M/S. CHAITALI SALES AGENCY PVT. LTD AND GOLD STAR FINVEST PVT. LTD. THE SAID CASE S WERE RELATED TO SA ME SEARCH IN WHICH THE COMMISSION WAS ASSESSED @ 0 .15% OF TOTAL DEPOSITS BUT THE ALTERNATE CONTENTION WAS NOT DEALING WITH THE HONBLE ITAT, THEREFORE, THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN FILED. 4. WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. ALL THE APPEALS BEARING ITA. NOS. 7105/M/2017 TO 7108/M/2017 FOR THE A.Y.2006 - 7 TO 2009 - 10 HAS BEEN DECIDED BY HONBLE ITAT MUMBAI F BENCH BY VIRTUE OF ORDER DATED 25.03.2019 . AFTER PERUSING THE ORDER DATED 25.03.2019, WE NOTICED THAT THE DECISIONS IN THE CASE OF CHAITALI MA NOS.22 TO 25 / MUM/20 20 SALES AGENCY PVT. LTD. AND GOLD STAR FINVESTPVT. LTD. WERE NOT DEALT WITH. S UBSEQUENTLY THESE DECISIONS WERE CONFIRMED BY THE HONBLE BOMBAY HIGH COURT . APPLICABILITY OF T HESE CASES MAY EFFECT THE MERITS OF THE CASE ALSO. SO BY NOT DEALING THESE CASES , THERE IS MISTAKE APPARENT ON RECORD, THEREFORE, WE RECALL THE ORDER DATED 25.03.2019. REGISTRY IS DIRECTED TO REFIX THE CASE IN DUE COURSE OF TIME. PARTIES BE INFORMED. M.A NO. 23 TO 25/M/2020 5. SINCE ALL THE MISCELLANEOUS APPLICATIONS FILED BY T HE ASSESSEE IN CASE BEARING ITA. NO.7106 TO 7108 /M/201 7 HAVING SIMILAR CONTROVERSY, THEREFORE , THE FINDING ABOVE IS QUITE APPLICABLE TO THE FACTS OF THESE CASES ALSO AS MUTATIS MU TANDIS, THEREFORE, THESE MISCELLANEOUS APPLICATIONS ARE HEREBY ALSO ALLOWED ACCORDINGLY . 6 . HOWEVER, BEFORE WE PART WITH THE MATTER, WE MUST DEAL WITH ONE PROCEDURAL ISSUE AS WELL. WHILE HEARING OF MISCELLANEOUS APPLICATIONS WAS CONCLUDED ON 06 .0 3 .2020, THIS ORDER THEREON IS BEING PRONOUNCED TODAY, MUCH AFTER THE EXPIRY OF 90 DAYS FROM THE DATE OF CONCLUSION OF HEARING. WE ARE ALSO ALIVE TO THE FACT THAT RULE 34(5) OF THE INCOME TAX APPELLATE TRIBUNAL RULES 1963, WHICH DEALS WITH PRONOUNCEMENT OF ORDERS. LET US IN THIS LIGHT REVERT TO THE PREVAILING SITUATION IN THE COUNTRY. ON 24TH MARCH, 2020, HON'BLE PRIME MINISTER OF INDIA TOOK THE BOLD STEP OF IMPOSING A NATIONWIDE LOCKDOWN FOR 21 DAYS, TO PREVENT THE SPREAD OF COVID - 19 EPIDEMIC AND THIS LOCKDOWN WAS EXTENDED FROM TIME TO TIME. AS A MATTER OF FACT, EVEN BEFORE THIS FORMAL NATIONWIDE LOCKDOWN, THE FUNCTIONING OF THE INCOME TAX APPELLATE TRIBUNAL AT MUMBAI WAS SEVERELY RESTRICTED ON ACCOUNT OF LOCKDOW N BY THE MAHARASHTRA GOVERNMENT AND ON ACCOUNT OF STRICT ENFORCEMENT OF HEALTH ADVISORIES WITH A VIEW OF CHECKING SPREAD OF COVID - 19. THE EPIDEMIC SITUATION IN MUMBAI BEING GRAVE, THERE WAS NOT MUCH OF A RELAXATION IN SUBSEQUENT LOCKDOWNS ALSO. IN ANY CASE, THERE WAS UNPRECEDENTED DISRUPTION OF JUDICIAL WORK ALL OVER THE COUNTRY. MA NOS.22 TO 25 / MUM/20 20 AS A MATTER OF FACT, IT HAS BEEN SUCH AN UNPRECEDENTED SITUATION, CAUSI NG DISRUPTION IN THE FUNCTIONING OF JUDICIAL MACHINERY, THAT HON'BLE SUPREME COURT OF INDIA, IN AN UNPRECEDENTED ORDER IN THE HISTORY OF INDIA AND VIDE ORDER DATED 6.5.2020 READ WITH ORDER DATED 23.3.2020, EXTENDED THE LIMITATION TO EXCLUDE NOT ONLY THIS L OCKDOWN PERIOD BUT ALSO A FEW MORE DAYS PRIOR TO, AND AFTER, THE LOCKDOWN BY OBSERVING THAT 'IN CASE THE LIMITATION HAS EXPIRED AFTER 15.03.2020 THEN THE PERIOD FROM 15.03.2020 TILL THE DATE ON WHICH THE LOCKDOWN IS LIFTED IN THE JURISDICTIONAL AREA WHERE THE DISPUTE LIES OR WHERE THE CAUSE OF ACTION ARISES SHALL BE EXTENDED FOR A PERIOD OF 15 DAYS AFTER THE LIFTING OF LOCKDOWN'. HON'BLE BOMBAY HIGH COURT, IN AN ORDER DATED 15TH APRIL 2020, HAS, BESIDES EXTENDING THE VALIDITY OF ALL INTERIM ORDERS, HAS ALSO OBSERVED THAT, 'IT IS ALSO CLARIFIED THAT WHILE CALCULATING TIME FOR DISPOSAL OF MATTERS MADE TIME - BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERATE SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY', AN D ALSO OBSERVED THAT 'ARRANGEMENT CONTINUED BY AN ORDER DATED 26TH MARCH 2020 TILL 30TH APRIL 2020 SHALL CONTINUE FURTHER TILL 15TH JUNE 2020'. NOW THE MAHARASHTRA GOVERNMENT HAS EXTENDED THE LOCKDOWN PERIOD UPTO 31 JULY, 2020 BY VIRTUE OF ORDER DATED 29 J UNE, 2020. THE HONBLE BOMBAY HIGH COURT ITSELF HAS, VIDE JUDGMENT DATED 15TH APRIL 2020, HELD THAT 'WHILE CALCULATING THE TIME FOR DISPOSAL OF MATTERS MADE TIME BOUND BY THIS COURT, THE PERIOD FOR WHICH THE ORDER DATED 26TH MARCH 2020 CONTINUES TO OPERAT E SHALL BE ADDED AND TIME SHALL STAND EXTENDED ACCORDINGLY'. VIEWED THUS, THE EXCEPTION TO 90 DAY TIME LIMIT FOR PRONOUNCEMENT ORDERS INHERENT IN RULE 34(5)(C) CLEARLY COMES INTO PLAY IN THE PRESENT CASE. MA NOS.22 TO 25 / MUM/20 20 IN THE RESULT , THE MISCELLANEOUS APPLICATION S FILED BY THE ASSESSEE ARE HEREBY ORDERED TO BE ALLOWED . ORDER WAS PRON OUNCED IN TH E OPEN COURT ON 24 /0 7 /2020 SD/ - SD/ - ( SHAMIM YAHYA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI, DT: 24 /07 / 2020 V IJAY PAL SINGH/ SR. PS COPY TO : 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) 4 . THE CIT 5 . THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE, H , BENCH (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, MUMBAI BENCHES