NIRMAL DATACOM P. LTD, MUMBAI V. ASST CIT CIR 7(1), MUMBAI

MA 417/MUM/2011

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 8189 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 05-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI AMIT SHUKLA, JM M.A.NO.417/MUM/2011 (ARISING OUT OF ITA NO.5073/MUM/2009 : ASST. YEAR 2 003-2004) M/S.NIRMAN DATACOMM PRIVATE LIMITED PREM ESTATE, C-WING, 3 RD FLOOR SANT SAVITA CROSS ROAD NO.1 MUSTAFA BAZAAR, BYCULLA MUMBAI 400 010. PAN : AABCN5072B. THE ASSTT.COMMISSIONER OF INCOME-TAX CIRCLE 7(1) MUMBAI. (APPLICANT) VS. (RESPONDENT) APPLICANT BY : SHRI PANKAJ TOPARANI RESPONDENT BY : SHRI P.NAIK DATE OF HEARING : 20.04.2012 DATE OF PRONOUNCEMENT : 25.04.2012 O R D E R PER R.S.SYAL, AM : THIS MISCELLANEOUS APPLICATION U/S.254(2) OF THE IN COME-TAX ACT, 1961 HAS BEEN MOVED BY THE ASSESSEE PRAYING FOR THE RECTIFIC ATION OF THE ORDER OF THE TRIBUNAL DATED 31 ST MAY, 2011 IN ITA NO.5073/MUM/2009. 2. THE LEARNED COUNSEL FOR THE ASSESSEE CONTENDED T HAT THE TRIBUNAL, WHILE PASSING THE IMPUGNED ORDER, UPHELD THE ADDITION OF ` 38,56,711 IN RESPECT OF COMMISSION PAID TO THE FOLLOWING THREE PARTIES:- (I) BHARAT (PVC) INDUSTRIES P.LTD. ` 16,00,000 (II) PRESTIGE TRAVELS AND TOURS PVT.LTD. ` 21,06,711 (III) VORA INTERNATIONAL ` 1,50,000 -------------- ` 38,56,711 ======== 3. THE LEARNED COUNSEL SUBMITTED THAT THE TRIBUNAL, WHILE SUSTAINING THE ABOVE ADDITION, TOOK INTO CONSIDERATION THE FACT THAT THI S ADDITION WAS MADE BY THE A.O. FOLLOWING HIS VIEW TAKEN IN ASSESSMENT YEAR 2001-20 02 FOR WHICH THE ASSESSEE MA NO.417/MUM/2011 M/S.NIRMAL DATACOMM PRIVATE LIMITED. 2 APPROACHED THE SETTLEMENT COMMISSION IN RESPECT OF COMMISSION PAID TO CERTAIN PARTIES OTHER THAN THESE THREE PARTIES. THE LEARNED AR CONTENDED THAT THE SETTLEMENT COMMISSION, WHILE PASSING ITS ORDER, DID NOT MAKE ANY ADDITION IN RESPECT OF THESE THREE PARTIES FOR ASSESSMENT YEAR 2001-2002. IN THA T VIEW OF THE MATTER IT WAS CONTENDED THAT THE ADDITION SO SUSTAINED IN THE INS TANT APPEAL BE DELETED. IN THE OPPOSITION THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE IMPUGNED ORDER. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE ASSESSING OFFICER M ADE THE SAID ADDITION BY RELYING ON THE VIEW TAKEN BY HIM FOR THE ASSESSMENT YEAR 2 001-2002 IN WHICH ADDITION FOR THE ALLEGED COMMISSION PURPORTED TO HAVE BEEN PAID, INTER ALIA, TO THESE PARTIES WAS MADE. THE COPY OF THE SAID ASSESSMENT ORDER FOR AS SESSMENT YEAR 2001-2002 IS AVAILABLE ON RECORD. FROM THE SAID ORDER IT IS SEEN THAT THE ASSESSING OFFICER HAD DISCUSSED THE DETAILS OF ALLEGED COMMISSION PAID TO BHARAT (PVC) INDUSTRIES PRIVATE LIMITED IN THE PREVIOUS YEAR RELEVANT TO THE A.Y. 2 001-02. THE A.O. IN HIS ORDER FOR THE SAID EARLIER YEAR OBSERVED THAT THE NATURE OF BUSINESS CARRIED OUT BY BHARAT (PVC) INDUSTRIES PRIVATE LIMITED WAS DIFFERENT FROM THAT OF THE ASSESSEE-COMPANY. THE MANAGING DIRECTOR OF THE SAID COMPANY CLAIMED T O HAVE BEEN INTRODUCED CERTAIN PARTIES TO THE ASSESSEE-COMPANY BUT DID NOT REMEMBER THE NAMES OF THESE PARTIES. HE NEVER SENT ANY BUSINESS PROPOSALS AND D ID NOT ENTER INTO ANY AGREEMENT FOR RENDERING ANY SERVICES TO THE ASSESSEE-COMPANY. THE MANAGING DIRECTOR OF BHARAT (PVC) INDUSTRIES PRIVATE LIMITED CLAIMED TO HAVE MET SHRI KEDAR SHAH, MANAGING DIRECTOR OF THE ASSESSEE-COMPANY THROUGH H IS CHARTERED ACCOUNTANT. HE EVEN DID NOT REMEMBER THE LOCATION OF THE OFFICE OF THE ASSESSEE-COMPANY AND FURTHER DID NOT REMEMBER THE PHYSICAL APPEARANCE OF SHRI KEDAR SHAH. HE EVEN ADMITTED NOT TO REMEMBER THAT HE DEALT WITH SHRI KE DAR SHAH OR SMT.KEDAR SHAH. HE NEVER VISITED ANY OF THE OFFICES OR THE PARTIES WHOM HE INTRODUCED TO THE ASSESSEE-COMPANY AND NEVER DID ANY FOLLOW UP WORK C ONSEQUENT TO SUPPLY OF GOODS. HE EVEN DID NOT KNOW THE PROCESS OF DETERMIN ING THE AMOUNT OF COMMISSION MA NO.417/MUM/2011 M/S.NIRMAL DATACOMM PRIVATE LIMITED. 3 DUE TO HIM AND DID NOT CONFIRM THE SALE VALUE IN RE SPECT OF THE SO CALLED CONTACTS INTRODUCED BY HIM. IN VIEW OF THIS BACKGROUND OF FA CTS, THE ASSESSING OFFICER CAME TO THE CONCLUSION FOR THE ASSESSMENT YEAR 2001-2002 THAT SUCH COMMISSION WAS NON-GENUINE. AS REGARDS THE SECOND PARTY, BEING , PRESTIGE TRAVELS & TOURS PRIVATE LIMITED, THE ASSESSEE ALLEGEDLY CLAIMED TO HAVE PAID COMMISSION TO SHRI NARESH LALWANI, MANAGING DIRECTOR OF M/S.PRESTIGE T RAVELS & TOURS PRIVATE LIMITED, IN THE PREVIOUS YEAR RELEVANT TO THE A.Y. 2001-02. THE ALLEGED RECIPIENT WAS ENGAGED IN THE BUSINESS OF CONDUCTING AND ORGAN IZING TOURS. NO BUSINESS PROPOSAL WAS SENT BY HIM TO THE ASSESSEE AND NO AGR EEMENT WAS ENTERED INTO WITH THE ASSESSEE-COMPANY FOR RENDERING OF SERVICES IN R ESPECT OF WHICH THE ALLEGED COMMISSION WAS PAID. THIS PERSON ALSO MISERABLY FAI LED TO PROVE THE FACTUM OF HAVING RENDERED ANY SERVICES TO THE ASSESSEE-COMPAN Y FOR WHICH THE ALLEGED COMMISSION WAS PAID. THE THIRD PARTY IS M/S.VORA IN TERNATIONAL. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS FOR THE SAID EARLIER YEAR, THIS CONCERN WAS NOT FOUND AT THE ADDRESS PROVIDED BY THE ASSESSEE AND FURTHER NO STEPS WERE TAKEN TO PRODUCE THIS PARTY. FURTHER NO EVIDENCE WAS ADDUCED TO SUPP ORT THE CLAIM OF COMMISSION EXPENDITURE. IN THE LIGHT OF ABOVE FACTS THE ASSESS ING OFFICER CAME TO THE CONCLUSION THAT THE ALLEGED COMMISSION SO PAID BY T HE ASSESSEE TO THESE THREE PARTIES IN THE PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR 2001-2002 WAS NON- GENUINE. THEREAFTER THE ASSESSEE APPROACHED SETTLEM ENT COMMISSION OFFERING CERTAIN ADDITIONAL INCOME. THE SETTLEMENT COMMISSIO N PASSED ORDER BY MAKING CERTAIN OTHER ADDITIONS. THERE IS NO SPECIFIC DISCU SSION ABOUT THESE THREE PARTIES IN THE ORDER OF THE SETTLEMENT COMMISSION. BASED ON TH E SAME FACTS AND THE VIEW TAKEN BY THE A.O. IN ASSESSMENT YEAR 2001-2002, THE A.O. REPEATED THE ADDITION IN THE INSTANT YEAR AS WELL, WHICH HAS BEEN UPHELD BY THE TRIBUNAL VIDE THE IMPUGNED ORDER. 5. THE LEARNED AR HAS NOW CLAIMED BEFORE US TH AT SINCE THE SETTLEMENT COMMISSION DID NOT CONFIRM ANY ADDITION IN RESPECT OF COMMISSION PAID TO THESE MA NO.417/MUM/2011 M/S.NIRMAL DATACOMM PRIVATE LIMITED. 4 THREE PARTIES IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2001-2002, THE ADDITION SO MADE IN THE INSTANT YEAR COULD NOT HAVE BEEN SUSTAINED. WE ARE UNABLE TO UPHOLD THIS CONTENTION PRIMARILY FOR THE REASON THAT THE SETTLEMENT COMMISSION HAS NOT DECIDED ON THE GENUINENESS OR OTHERWISE OF THE ALLEGED COMMISSION PAID TO THESE THREE PARTIES FOR THE ASSESSMENT YEAR 2001-20 02. MOREOVER BECAUSE OF THE VERY NATURE OF PROCEEDINGS BEFORE THE SETTLEMENT C OMMISSION, IT CANNOT BE SAID THAT ANY DECISION HAS BEEN TAKEN ON THE TOUCH STONE OF THE GENUINENESS OR OTHERWISE OF THE PAYMENTS SO MADE. IN THE INSTANT YEAR THE A. O. MADE ADDITION BY FOLLOWING HIS ACTION TAKEN IN ASSESSMENT YEAR 2001-2002. NO M ATERIAL HAS BEEN BROUGHT ON RECORD TO JUSTIFY THAT THE ADDITION WAS WRONGLY MAD E BY THE ASSESSING OFFICER. IN FACT THE ENTIRE ISSUE HAS BEEN DISCUSSED IN GREAT D ETAIL VIDE PARA 5 OF THE IMPUGNED ORDER. ON THE CONSIDERATION OF THE ENTIRE RELEVANT FACTS A FINAL CONCLUSION HAS BEEN DRAWN THAT THE PAYMENTS SO MADE TO THESE THREE PART IES WAS NOT GENUINE. IN SUCH A SITUATION IT IS NOT ADVISABLE TO REARGUE THE SAME F ACTS WITH A VIEW TO CONVINCE THE TRIBUNAL FOR TAKING A CONTRARY DECISION FROM THE ON E TAKEN IN THE ORDER PASSED U/S 254(1). THE SCOPE OF PROCEEDINGS U/S 254(2) IS REST RICTED TO RECTIFYING ANY MISTAKE APPARENT FROM RECORD AND NOT REVIEWING THE EARLIER ORDER. IN OUR CONSIDERED OPINION, THERE IS NO MISTAKE APPARENT FROM RECORD I N THE ORDER PASSED BY THE TRIBUNAL WARRANTING ANY INTERFERENCE. WE, THEREFORE , REFUSE TO CARRY OUT ANY AMENDMENT IN THE IMPUGNED ORDER. 6. IN THE RESULT, THE MISCELLANEOUS APPLICATION IS DISMISSED. ORDER PRONOUNCED ON THIS 25 TH DAY OF APRIL, 2012. SD/- SD/- (AMIT SHUKLA) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 25 TH APRIL, 2012. DEVDAS* MA NO.417/MUM/2011 M/S.NIRMAL DATACOMM PRIVATE LIMITED. 5 COPY TO : 1. THE APPLICANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED. 4. THE CIT(A) VII, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.