BHAGATRAM GODHWANI , MUMBAI V. ITO - 10 (3)(3), MUMBAI

MA 228/MUM/2022

AI Insights

The case involves a Miscellaneous Application by the assessee, Bhagatram Godhwani, seeking recall/rectification of an earlier order by the Income-tax Appellate Tribunal, which had upheld the addition made by the Assessing Officer regarding unsecured loans. The assessee contended that the Tribunal mistakenly recorded that the assessee failed to produce the parties of unsecured loans before the Assessing Officer, claiming no summons under section 131 were issued. The Tribunal, however, found that the Assessing Officer had issued notices under section 133(6) and recorded the non-compliance by the assessee. The Tribunal dismissed the application, stating there was no mistake apparent from the record.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 123786 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 28-12-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 15-12-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 24-08-2022
• Other Referred Cases: DCIT Vs DNH Spinners Private Ltd (ITA No. 6315 & 6316/M/2017), DCIT Vs DNH Spinners Pvt. Ltd. (In ITA No. 6315 & 6316/M/2017), CIT vs. Lovely Exports Pvt. Ltd. 216 ITR 295 (SC), CIT vs. Creative World Telefilms Ltd (2011) 333 ITR 100, Osis Hospitality Pvt. Ltd. 333 ITR 119(Delhi)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 131; 143(3); 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI PAVAN KUMAR GADALE (JUDICIAL MEMBER) MA No. 228/MUM/2022 (ITA No. 365/MUM/2021) Assessment Year: 2012-13 Bhagatram Godhwani, 165, 5-B Sanjay Building No. 5, Mittal Industries Estate, Sakinaka, Andheri East, Mumbai-400059. Vs. ITO-10(3)(3), Room No. 213, 2 nd floor, Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN No. AABPG 3339 D Appellant Respondent Assessee by : Mr. Anil Thakrar, AR Revenue by : Mr. Tejinder Pal Singh Anand, DR Date of Hearing : 16/12/2022 Date of pronouncement : 29/12/2022 ORDER PER OM PRAKASH KANT, AM By way of this Miscellaneous Application, the assessee is seeking recall/rectification in the order of the Income-tax Appellate Tribunal dated 28.02.2022 passed in ITA No. 365/Mum/2021 for assessment year 2012-13. 2. The Ld. Cousel of the assessee submitt para 17 has recorded that the assessee failed to produce the unsecured loan parties before the Assessing Officer, whereas, no summon u/s 131 of the Income were issued by the Assessing Officer and there mistake of recording the fact and thus order to be recalled being mistake apparent from the record. 3. We have heard rival submission of the parties on the issue in-dispute and perused the relevant material on record. relevant para of the Tribunal referred by the Ld. Counsel of the assessee is reproduced as under : “17. We have heard rival submission of the parties on the issue in dispute. Ld. counsel has repeated the arguments which were taken for assessment at the unsecured loan parties complied the notice under section 133(6) of the Act, Albeit, on being asked, the assessee failed to produce them before the Assessing Officer. Before us the Ld. counsel has relied on the d case of DCIT Vs DNH 6316/M/2017), but the facts of the said case are distinguishable in view of the finding of the Tribunal (supra), which is reproduced as under: 16. We have hea parties and perused the material on record. The The Ld. Cousel of the assessee submitted that Tribunal in para 17 has recorded that the assessee failed to produce the unsecured loan parties before the Assessing Officer, whereas, no summon u/s 131 of the Income-tax Act, 1961 (in short ‘the Act’) were issued by the Assessing Officer and therefore, there is a mistake of recording the fact and thus order of the Tribunal need to be recalled being mistake apparent from the record. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. relevant para of the Tribunal referred by the Ld. Counsel of the assessee is reproduced as under : We have heard rival submission of the parties on the issue in dispute. Ld. counsel has repeated the arguments which were taken for assessment at 2009-10, except that in the present case the unsecured loan parties complied the notice under section 133(6) of the Act, Albeit, on being asked, the assessee failed to produce them before the Assessing Officer. Before us the Ld. counsel has relied on the decision of the Mumbai Tribunal in the case of DCIT Vs DNH Spinners Private Ltd (In ITA No. 6315 & 6316/M/2017), but the facts of the said case are distinguishable in view of the finding of the Tribunal (supra), which is reproduced as under: 16. We have heard the rival submissions of both the parties and perused the material on record. The Bhagatram Godhwani MA No. 228/M/2022 2 ed that Tribunal in para 17 has recorded that the assessee failed to produce the unsecured loan parties before the Assessing Officer, whereas, no tax Act, 1961 (in short ‘the Act’) fore, there is a of the Tribunal need to be recalled being mistake apparent from the record. We have heard rival submission of the parties on the issue- dispute and perused the relevant material on record. The relevant para of the Tribunal referred by the Ld. Counsel of the We have heard rival submission of the parties on the issue in dispute. Ld. counsel has repeated the arguments which were 10, except that in the present case the unsecured loan parties complied the notice under section 133(6) of the Act, Albeit, on being asked, the assessee failed to produce them before the Assessing Officer. Before us the Ld. ecision of the Mumbai Tribunal in the Spinners Private Ltd (In ITA No. 6315 & 6316/M/2017), but the facts of the said case are distinguishable in view of the finding of the Tribunal (supra), which is rd the rival submissions of both the parties and perused the material on record. The undisputed facts are that during the year, the assessee allotted shares to seven parties out of which the AO made an addition in respect of three companies by stating the same to be related to Shri Pravin Kumar Jain. During the course of assessment proceedings the assessee filed all the necessary evidences in the form of share application forms, allotment returns, copy of bank statements of the investors, copy of the balanc confirmations etc. along with ITR copies. However, the AO did not carry out any further investigations to find out the truth. It investment entries were duly appearing in the respect balance sheets of these investors and were examined by the respective AOs during assessment proceedings and were accepted in the assessment framed u.s 143(3) of the Act. The AO has relied on the statement of Shri Pravin Kumar Jain recorded under copy whereof is filed at page No.127 to 131 which contained an exhaustive list of concerns/companies/entities in which Shri Pravin Kumar Jain was either shareholder/director or connec the management and control of the said concerns. We find that none of these three investors who bought share capital in the assessee company were appearing in the said statement of Shri Pravin Kumar Jain and therefore we do not find any merit in t AO that all these three entries were related to Shri Pravin Kumar Jain. Further, we note that the AO has not made any investigation or enquiry despite the assessee having filed all the necessary evidences before the AO to prove the identities and creditworthiness of the investors and genuineness of the transactions. We also observe that the undisputed facts are that during the year, the assessee allotted shares to seven parties out of which the AO made an addition in respect of three companies by stating the same to be related to Shri Pravin Kumar Jain. During the course of assessment proceedings the assessee filed all the necessary evidences in the form of share application forms, allotment returns, copy of bank statements of the investors, copy of the balance sheet of the investors, their confirmations etc. along with ITR copies. However, the AO did not carry out any further investigations to find out the truth. It is also undisputed that the corresponding investment entries were duly appearing in the respect balance sheets of these investors and were examined by the respective AOs during assessment proceedings and were accepted in the assessment framed u.s 143(3) of the Act. The AO has relied on the statement of Shri Pravin Kumar Jain recorded under section 132(4) of the Act, copy whereof is filed at page No.127 to 131 which contained an exhaustive list of concerns/companies/entities in which Shri Pravin Kumar Jain was either shareholder/director or connected with the management and control of the said concerns. We find that none of these three investors who bought share capital in the assessee company were appearing in the said statement of Shri Pravin Kumar Jain and therefore we do not find any merit in the conclusion drawn by the AO that all these three entries were related to Shri Pravin Kumar Jain. Further, we note that the AO has not made any investigation or enquiry despite the assessee having filed all the necessary evidences before the AO to prove he identities and creditworthiness of the investors and genuineness of the transactions. We also observe that the Bhagatram Godhwani MA No. 228/M/2022 3 undisputed facts are that during the year, the assessee allotted shares to seven parties out of which the AO made an addition in respect of three companies by stating the same to be related to Shri Pravin Kumar Jain. During the course of assessment proceedings the assessee filed all the necessary evidences in the form of share application forms, allotment returns, copy of bank statements of the e sheet of the investors, their confirmations etc. along with ITR copies. However, the AO did not carry out any further investigations to find out is also undisputed that the corresponding investment entries were duly appearing in the respective balance sheets of these investors and were examined by the respective AOs during assessment proceedings and were accepted in the assessment framed u.s 143(3) of the Act. The AO has relied on the statement of Shri Pravin of the Act, copy whereof is filed at page No.127 to 131 which contained an exhaustive list of concerns/companies/entities in which Shri Pravin Kumar ted with the management and control of the said concerns. We find that none of these three investors who bought share capital in the assessee company were appearing in the said statement of Shri Pravin Kumar Jain and therefore he conclusion drawn by the AO that all these three entries were related to Shri Pravin Kumar Jain. Further, we note that the AO has not made any investigation or enquiry despite the assessee having filed all the necessary evidences before the AO to prove he identities and creditworthiness of the investors and genuineness of the transactions. We also observe that the Ld. CIT(A) has examined the issue in great depth and has relied on a series of decisions of Apex Court of M/s. Andman Timber Industries civil and the (SC). The ld CIT(A) also relied upon the decisions of the Hon'ble Bombay High Court in the case of CIT vs. creative World decision of Hon'ble Delhi High Court in Osis Hospitality Pvt. Ltd. 333 ITR 119( Delhi) while deciding the appeal of the assessee. 17.1 The facts and circumstances and arguments taken by the parties being more or less id circumstances and arguments taken in the appeal of assessee for assessment year 2009 assessment at 2009 issue-in-dispute are uphold. The grounds raised by are accordingly dismissed 3.1 We find that in this case, the Assessing Officer issued 133(6) which were remain non Officer asked the assessee through order sheet to produce the loan creditors namely Pvt. Ltd. And Duke Business Pvt. Ltd. through ord dated 09.10.2014. No compliance assessee. This fact has been duly recorded by the Assessing Officer in para 4.1 (on page 3 of th the above, allegation of the assessee that no summon u/s 131 Ld. CIT(A) has examined the issue in great depth and has relied on a series of decisions of Apex Court of M/s. Andman Timber Industries civil appeal No.4228 of 2006 and the CIT vs. Lovely Exports Pvt. Ltd. 216 ITR 295 (SC). The ld CIT(A) also relied upon the decisions of the Hon'ble Bombay High Court in the case of CIT vs. creative World Telefilms Ltd (2011) 333 ITR 100 and decision of Hon'ble Delhi High Court in Osis Hospitality Pvt. Ltd. 333 ITR 119( Delhi) while deciding the appeal of the assessee. 17.1 The facts and circumstances and arguments taken by the parties being more or less identical to the facts and circumstances and arguments taken in the appeal of assessee for assessment year 2009-10, thus following our finding in assessment at 2009-10, the findings of the Ld. CIT(A) on the dispute are uphold. The grounds raised by the assessee are accordingly dismissed.” We find that in this case, the Assessing Officer issued 133(6) which were remain non-compliance and thereafter, the Assessing Officer asked the assessee through order sheet to produce the loan creditors namely Dolly Exim Pvt. Ltd., Sumukh Commercial Pvt. Ltd. And Duke Business Pvt. Ltd. through order sheet entry dated 09.10.2014. No compliance of same was made by the assessee. This fact has been duly recorded by the Assessing Officer in para 4.1 (on page 3 of the assessment order). In view of allegation of the assessee that no summon u/s 131 Bhagatram Godhwani MA No. 228/M/2022 4 Ld. CIT(A) has examined the issue in great depth and has relied on a series of decisions of Apex Court of M/s. appeal No.4228 of 2006 . 216 ITR 295 (SC). The ld CIT(A) also relied upon the decisions of the Hon'ble Bombay High Court in the case of CIT vs. Telefilms Ltd (2011) 333 ITR 100 and decision of Hon'ble Delhi High Court in Osis Hospitality Pvt. Ltd. 333 ITR 119( Delhi) while deciding the appeal of 17.1 The facts and circumstances and arguments taken by the entical to the facts and circumstances and arguments taken in the appeal of assessee for 10, thus following our finding in 10, the findings of the Ld. CIT(A) on the the assessee We find that in this case, the Assessing Officer issued 133(6) compliance and thereafter, the Assessing Officer asked the assessee through order sheet to produce the Dolly Exim Pvt. Ltd., Sumukh Commercial er sheet entry same was made by the assessee. This fact has been duly recorded by the Assessing e assessment order). In view of allegation of the assessee that no summon u/s 131 was issued is not relevant and the Tribunal has recorded the fact correctly. Regarding the contention of the Ld. Counsel of the assessee that decision in the case Spinners Pvt. Ltd. (ITA No. 6315 & 6316/M/2017) has not been considered is also not correct. The Tribunal has distinguished the said decision as in the said case no investigation or inquiry was carried out by the assessee, wherein in Assessing Officer has duly carried out inquiry u/s 133(6) of the Act. 3.2 In view of the above, we do not find any mistake apparent from record in the order of the Tribunal. 4. In the result, the Miscellaneous Application filed by t assessee is dismissed. Order pronounced under Rule 34(4) of 1963 on 29/12/2022. Sd/- (PAVAN KUMAR GADALE JUDICIAL MEMBER Mumbai; Dated: 29/12/2022 Rahul Sharma, Sr. P.S. was issued is not relevant and the Tribunal has recorded the fact correctly. Regarding the contention of the Ld. Counsel of the assessee that decision in the case of DCIT v. M/s D.N.H. Spinners Pvt. Ltd. (ITA No. 6315 & 6316/M/2017) has not been considered is also not correct. The Tribunal has distinguished the said decision as in the said case no investigation or inquiry was carried out by the assessee, wherein in the present case, the Assessing Officer has duly carried out inquiry u/s 133(6) of the In view of the above, we do not find any mistake apparent from record in the order of the Tribunal. In the result, the Miscellaneous Application filed by t assessee is dismissed. Order pronounced under Rule 34(4) of the ITAT Rules, /2022. Sd/- PAVAN KUMAR GADALE) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Bhagatram Godhwani MA No. 228/M/2022 5 was issued is not relevant and the Tribunal has recorded the fact correctly. Regarding the contention of the Ld. Counsel of the of DCIT v. M/s D.N.H. Spinners Pvt. Ltd. (ITA No. 6315 & 6316/M/2017) has not been considered is also not correct. The Tribunal has distinguished the said decision as in the said case no investigation or inquiry was the present case, the Assessing Officer has duly carried out inquiry u/s 133(6) of the In view of the above, we do not find any mistake apparent In the result, the Miscellaneous Application filed by the the ITAT Rules, - OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumbai Bhagatram Godhwani MA No. 228/M/2022 6 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai