INCOME TAX OFFICER 3(3)(3), MUMBAI V. UDIPUR PROPERTIES AND FINANCE LIMITED , MUMBAI

MA 98/MUM/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2665 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2007-2008
• Appeal Filed On: 13-02-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA LD
• Assessee Lawyers: G AURAV BANSAL LD
• Keywords: Accommodation entries; Tax effect; Reassessment proceedings

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI MANOJ KUMAR AGGARWAL, AM MISCELLANEOUS APPLICATION NO.98/MUM/2019 [ARISING OUT OF I.T.A. NO.6451/MUM/2017] ( / ASSESSMENT YEAR: 2007-08) INCOME TAX OFFICER - 3(3)(3) ROOM NO.672, 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD, NEW MARINE LINES MUMBAI-400 020. / VS. M/S. UDAIPUR PROPERTI ES & FINA NCE LTD. 1010, MAKER CHAMBERS V NARIMAN POINT MUMBAI-400 021. ./ ./ PAN/GIR NO. AAACU-7134-N ( /APPELLANT ) : ( / RESPONDENT ) & MISCELLANEOUS APPLICATION NO.100/MUM/2019 [ARISING OUT OF I.T.A. NO.6448/MUM/2017] ( / ASSESSMENT YEAR: 2006-07) D CIT - 3(3)(3) ROOM NO.672, AAYKAR BHAVAN M.K. ROAD, NEW MARINE LINES MUMBAI-400 020. / VS. M/S. UDAIPUR PROPERTIES & FINANCE L TD. 1010, MAKER CHAMBERS V NARIMAN POINT MUMBAI-400 021. ./ ./ PAN/GIR NO. AAACU 7134 N ( /APPELLANT ) : ( / RESPONDENT ) ASSESSEE BY : SHRI GAURAV BANSAL-LD.AR REVEN UE BY : SHRI CHAITANYA ANJARIA LD. DR !'#$ / DATE OF HEARING : 07/06/2019 %& !'#$ / DATE OF PRONOUNCEMENT : 07/06/2019 2 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. BY WAY OF THESE APPLICATIONS, THE REVENUE SEEKS RECALL OF COMMON ORDER OF TRIBUNAL ITA NO. 6451/MUM/2017 & 6448/MUM/ 2017 DATED 08/08/2018, PASSED IN REVENUES APPEALS, IN CASE OF CAPTIONED ASSESSEE FOR ASSESSMENT YEARS 2006-07 & 2007-08. 2. DRAWING OUR ATTENTION TO THE APPLICATIONS, LD. D EPARTMENTAL REPRESENTATIVE [DR], SUBMITTED THAT THE REVENUES A PPEALS WERE DISMISSED KEEPING IN VIEW LOW-TAX EFFECT CIRCULAR NO. 03/2018 ISSUED BY CBDT ON 11/07/2018 AND A LIBERTY WAS GRANTED TO THE REVENUE TO SEEK RECALL OF THE ORDER IN CASE, THE MATTER WAS FOUND TO BE COVERED B Y ANY OF THE EXCEPTIONS GIVEN IN THE SAID CIRCULAR. 3. IN THE ABOVE BACKGROUND, OUR ATTENTION HAS BEEN DRAWN TO THE FACT THAT REASSESSMENT PROCEEDINGS WERE INITIATED UPON RECEIP T OF SPECIFIC INFORMATION FROM CENTRAL BUREAU OF INVESTIGATION [C BI] THAT THE ASSESSEE GROUP RUN BY SHRI ARUN DALMIA & SHRI HARSH DALMIA H AD INDULGED IN FALSELY SHOWING BUSINESS OF PURCHASE, SALE AND DEVELOPMENT OF SOFTWARE AS NONE OF THE COMPANIES WERE ENGAGED IN ANY SUCH ACTIVITY NOR DO THEY HAD ANY INFRASTRUCTURE OR NECESSARY TECHNICAL MANPOWER TO D O SO. THE TRANSACTION OF PURCHASE AND SALES RUNNING INTO CRORES OF RUPEES WE RE NOTHING BUT ONLY BOOK ENTRIES TO TRANSFER THE FUNDS THROUGH CLANDEST INE DEALERS AND THEREFORE THE LOAN OBTAINED BY ASSESSEE FROM M/S BASANT MARKE TING PVT LTD. WAS NOT GENUINE. CONSIDERING THE SAID INFORMATION, THE LD. AO WAS CONVINCED THAT THE ASSESSEE HAD TAKEN ACCOMMODATION ENTRIES BY WAY OF LOANS AND 3 ADVANCES FROM M/S BASANT MARKETING PVT. LTD. AND TR IGGERED REASSESSMENT PROCEEDINGS WHEREIN THE ASSESSEE COULD NOT PROVE TH E GENUINENESS AND CREDITWORTHINESS OF THE SAID LOAN ENTRIES IN ITS BO OKS OF ACCOUNTS AND ADDITIONS WERE MADE U/S 68. 4. THE LD. DR FURTHER SUBMITTED THAT CLAUSE 10 OF C IRCULAR NO. 03/2018 DATED 11/07/2018 STOOD AMENDED BY THE SAME AUTHORIT Y ON 20/08/2018 WHEREIN NEW EXCEPTIONS (E) & (F) WERE ADDED. THEREF ORE, THE FACTS OF THE CASE WERE COVERED BY EXCEPTION (E) OF CLAUSE 10 OF THE SAID CIRCULAR AS AMENDED W.E.F 20/08/2018, WHICH READ AS UNDER: - 10. ADVERSE JUDGMENTS RELATING TO THE FOLLOWING ISS UES SHOULD BE CONTESTED ON MERITS NOTWITHSTANDING THAT THE TAX EFFECT ENTAILED IS LESS THAN THE MONETARY LIMITS SPECIFIED IN PARA 3 ABOVE OR THERE IS NO TAX EFFECT : - . (E) WHERE ADDITION IS BASED ON INFORMATION RECEIVED FROM EXTERNAL SOURCES IN THE NATURE OF LAW ENFORCEMENT AGENCIES SUCH AS CBI / ED / DRI / SFIO / DIRECTORATE GENERAL OF GST INTELLIGENCE (DGGI). . IN THE AFORESAID BACKGROUND, LD. DR PLEADED FOR REC ALL OF THE STATED ORDER. 5. ON THE OTHER HAND, LD. AUTHORIZED REPRESENTATIVE FOR ASSESSEE [AR] SUBMITTED THAT THE HEARING OF THE APPEALS TOOK PLAC E ON 01/08/2018 AND THE ORDER WAS PASSED BY THE BENCH ON 08/08/2018 AND THE REFORE, ON THE DATES OF HEARING AS WELL AS ON THE DATE OF PASSING OF THE ORDER, SUCH AMENDMENT COULD NOT BE FORESEEN AND THEREFORE, THERE WAS NO M ISTAKE APPARENT FROM RECORD WHICH WOULD REQUIRE ANY INTERFERENCE BY THE TRIBUNAL WITHIN THE MEANING OF SECTION 254(2). 4 6. UPON CAREFUL CONSIDERATION, WE FIND FORCE IN THE ARGUMENTS THAT ON THE DATE OF HEARING AS WELL AS ON THE DATE OF PRONOUNCE MENT OF THE ORDER, THE SAID AMENDMENT WAS NOT IN PLACE AND THERE COULD NOT NO OCCASION TO FORESEE THE SAME. THE SAID AMENDMENT WAS MADE EFFEC TIVE ONLY BY WAY OF SAID CIRCULAR WITH EFFECT FROM 20/08/2018 WHICH IS EVIDENT FROM CLAUSE-4 OF THE SAID CIRCULAR WHICH STATES THAT THE SAID MODIFI CATION SHALL COME INTO EFFECT FROM THE DATE OF ISSUE OF THIS LETTER. THE A PPEALS HAVE BEEN DISPOSED- OFF IN ACCORDANCE WITH CIRCULAR AS APPLICABLE ON TH E DATE OF HEARING AS WELL AS ON PRONOUNCEMENT. 7. IN THE AFORESAID FACTS & CIRCUMSTANCES, FINDING NO MISTAKE APPARENT FROM RECORD AS ENVISAGED BY SECTION 254(2) OF THE A CT, WE DISMISS BOTH THE APPLICATIONS. 8. RESULTANTLY, BOTH APPLICATIONS STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 TH JUNE, 2019. SD/- SD/- (SAKTIJIT DEY) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 07.06.2019 SR.PS:- JAISY VARGHESE 5 / COPY OF THE ORDER FORWARDED TO : 1. '#$ / THE APPELLANT 2. %&#$ / THE RESPONDENT 3. ( ' ) / THE CIT(A) 4. / CIT CONCERNED 5. %* , ' * , / DR, ITAT, MUMBAI 6. ,- / GUARD FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI.