ITO 5(1)(1), MUMBAI V. APNA FOODS P. LTD, MUMBAI

MA 631/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8122 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 22-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 17-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: S C TIWARI; POOJA PAWAR ARS
• Keywords: Reopening of assessment; Bogus purchase; Bogus Share capital; Opportunity of cross examination; Accommodation entries
• Section: 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI MAHAVIR SINGH, JM MA NO. 631/MUM/2018 (ARISING OUT OF ITA NO.4566/MUM/2016) ( ASSESSMENT YEAR: 2006-07) M/S APNA FOODS PVT. LTD., 8 ARAB BUNGLOW, 12 TH KHETWADI LANE, NEAR BALWAS HOTEL, MUMBAI-400004. VS. I.T.O. 5(1)(1), MUMBAI PAN/GIR NO.AAICS 1219 G (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI S.C. TIWARI & MS. POOJA PAWAR (ARS) REVENUE BY SHRI V. VINOD KUMAR (DR) DATE OF HEARING 15/11/2019 DATE OF PRONOUNCEMENT 22/01/2020 / O R D E R PER: R.C. SHARMA, A.M. THE PRESENT MISC. APPLICATION HAS BEEN FILED BY TH E ASSESSEE TO RECTIFY AN APPARENT MISTAKE ALLEGED TO BE OCCURRED IN THE ORDER OF THE TRIBUNAL DATED 03/08/2018 PASSED IN ITA NO. 4566/MU M/2016 FOR THE A.Y. 2006-07. 2. IT WAS ARGUED BY THE LD AR OF THE ASSESSEE THAT THE ISSUE WITH REGARD TO ADDITIONAL GROUND RAISED DURING THE COURS E OF HEARING TO THE EFFECT THAT THE ASSESSEE WAS NOT PROVIDED AN OPPORT UNITY TO CROSS EXAMINE SHRI MUKESH CHOKSI ON THE BASIS OF WHOSE ST ATEMENT, THE REOPENING OF ASSESSMENT WAS MADE HAS NOT BEEN CORRE CTLY DEALT WITH IN THE ORDER. AS PER THE LD AR WHILE DISPOSING THIS GR OUND, THE TRIBUNAL MA NO. 631/MUM/2018 M/S APNA FOODS PVT LTD. VS ITO 2 HAVE RELIED ON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF SMT. KUSUM LATA THUKRAL 327 ITR 424 WHICH IS NOT EMANATING FROM THE ORDERS OF THE LOWER AUTHORITIES NOR RELEVANT TO THE ISSUE UNDER CONSIDERATION. ACCORDINGLY, IT WAS SUBM ITTED THAT THERE HAS OCCURRED A MISTAKE WHICH IS APPARENT IN THE ORDER O F THE TRIBUNAL, BECAUSE OF THESE MISTAKES THE CONCLUSIONS DRAWN BY THE ITAT ARE VITIATED. 3. ON THE OTHER HAND, THE LD DR HAS CONTENDED THAT THERE IS NO MISTAKE MUCH LESS AN APPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL. HE HAS FURTHER CONTENDED THAT THE TRIBUNAL HAVE DEALT WITH THE ISSUE THREADBARE AND AFTER CONSIDERING THE FINDINGS OF BO TH THE LOWER AUTHORITIES AND ALSO THE JUDICIAL PRONOUNCEMENTS CI TED BY THE LD AR DURING THE COURSE OF HEARING HAVE DECIDED THE ISSUE AND CONFIRMED THE ADDITION MADE ON ACCOUNT OF BOGUS SHARE CAPITAL TAK EN BY THE ASSESSEE FROM HAWALA DEALER SHRI MUKESH CHOKSI. 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAR EFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS ORDER PASSED BY THE TRIBUNAL DATED 03/08/2018 AND THE MISC. APPLICA TION SO FILED BY THE ASSESSEE. FROM THE RECORD, WE FOUND THAT THE ASSESS EE HAS TAKEN ACCOMMODATION ENTRY IN THE FORM OF SHARE CAPITAL AN D PREMIUM FROM GROUP COMPANIES OF SHRI MUKESH CHOKSI. THE TRIBUNAL OBSERVED THAT MR. MUKESH CHOKSI HAD GIVEN CATEGORICAL STATEMENTS EXPLAINING THE MA NO. 631/MUM/2018 M/S APNA FOODS PVT LTD. VS ITO 3 MODUS OPERANDI OF GIVING ACCOMMODATION ENTRIES U/S 132(4) OF THE ACT. THE TRIBUNAL HAVE FURTHER OBSERVED THAT SHRI MUKESH CHOKSI HAD INDULGED IN GIVING ACCOMMODATION ENTRY THROUGH ITS BOGUS COMPANIES ALLIANCE INTERMEDIARIES & NETWORKS PVT. LTD., TALEN T INFOWAY LTD. AND GOLD STAR FINVEST PVT. LTD. BY WAY OF ACCOMMODATION ENTRIES TO GENERATE SHARE APPLICATION MONEY AND THE ASSESSEE C OMPANY IS THE BENEFICIARY OF COMPANY FLOATED BY SHRI MUKESH CHOKS I. AFTER CONSIDERING THE FINDINGS OF THE A.O. AND THE LD. CI T(A), THE TRIBUNAL HAVE CONFIRMED THE ADDITION MADE ON ACCOUNT OF BOGU S SHARE CAPITAL SO OBTAINED FROM THE CONCERNS OPERATED BY SHRI MUKESH CHOKSI. 5. WE ALSO FOUND THAT WHILE DEALING WITH THE ADDITI ONAL GROUND RAISED BY THE ASSESSEE TO THE EFFECT THAT OPPORTUNI TY OF CROSS EXAMINATION WAS NOT GRANTED TO THE ASSESSEE, THE TR IBUNAL HAVE CONSIDERED THE DECISION OF THE HONBLE PUNJAB & HAR YANA HIGH COURT IN THE CASE OF SMT. KUSUM LATA THUKRAL (SUPRA) WHICH A PPEARS TO BE CONCERNING THE BOGUS PURCHASES. HOWEVER, WE FOUND T HAT IN THIS DECISION ALSO, THE HONBLE PUNJAB & HARYANA HIGH CO URT HAS CATEGORICALLY OBSERVED THAT THE QUESTION WHETHER DE NIAL OF OPPORTUNITY OF CROSS EXAMINATION RESULTED IN VIOLATION OF NATUR AL JUSTICE DEPENDED UPON THE FACTS OF EACH CASE. THE OBJECT OF CROSS EX AMINATION WAS TO TEST THE VERACITY OF THE VERSION GIVEN IN EXAMINATI ON IN CHIEF. THUS MERE APPLYING THE RATIO LAID DOWN THEREIN DOES NOT AMOUN T TO MISTAKE MA NO. 631/MUM/2018 M/S APNA FOODS PVT LTD. VS ITO 4 APPARENT IN THE ORDER OF THE TRIBUNAL. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY A PPARENT MISTAKE IN THE ORDER OF THE TRIBUNAL DATED 03/08/2018. IT IS P ERTINENT TO MENTION THAT SCOPE OF SECTION 254(2) OF THE ACT IS VERY LIM ITED WHEREIN ONLY MISTAKE APPARENT FROM THE RECORD CAN BE RECTIFIED. AN ISSUE REQUIRING WRONG REASONING AND DETAILED ARGUMENT CANNOT BE SAI D TO BE A MISTAKE APPARENT FROM THE RECORD. RECTIFICATION IN EXERCISE OF POWER U/S 254(2) OF THE ACT CAN ONLY BE MADE WHEN A GLARING MISTAKE OF FACT OR LAW COMMITTED WHICH IS APPARENT FROM RECORD. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, WE DO NOT FIND ANY MERIT IN THE MISC. APPLICATION FILED BY THE ASSESSEE. 6. IN THE RESULT, THIS MISC. APPLICATION IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY, 2020. SD/- (MAHAVIR SINGH) SD/- (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 22/01/2020 *RANJAN 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//