SCION ENTERPRISES PRIVATE LIMITD ,MUMBAI V. ITO, WARD, 4(3)(4), MUMBAI

ITA 5560/MUM/2024

AI Insights

Scion Enterprises Private Limited appealed against the order of the Commissioner of Income Tax (Appeals), which upheld the assessment order rejecting the books of accounts and making substantial additions to the income of the assessee for the Assessment Year 2017-18. The primary contention was the rejection of the books of accounts under section 145(3) and the subsequent additions made by the Assessing Officer, which the assessee argued were made without proper notice and consideration of the facts. The Tribunal, after hearing the Departmental Representative and reviewing the materials on record, dismissed the appeal due to the assessee's failure to substantiate the genuineness of the transactions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396547 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Keywords: Business income; Rejection of books of accounts; Accommodation entries; Bogus
• Section: 143(3); 142(1); 132; 131; 115JB

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM ITA Nos. 5560/Mum/2024 (Assessment Year: 2017-18) Scion Enterprises Private Limited Room No. 16, 2nd Floor, 413-C, Kalbadevi Road, Vasant Wadi, Mumbai – 400002. Vs. ITO Ward 4(3)(4), Mumbai Aayakar Bhavan, Maharishi Karve Road, Mumbai 400 020. PAN/GIR No. AAOCS9803J (Appellant) : (Respondent) Assessee by : None Respondent by : Shri. Ram Krishn Kedia, (SR. DR.) Date of Hearing : 08.05.2025 Date of Pronouncement : 28.05.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18. 2. As there was no representation on behalf of the assessee, we hereby dispose of this appeal by hearing the learned Departmental Representative ('ld.DR' for short) and on perusal of the materials available on record. 3. The assessee has raised the following grounds of appeal: “1) The Learned CIT(A) has erred in law and on facts in dismissing the appeal against assessment order w's 143(3) of the Act dated 25/12/2019, wherein Assessing Officer has ITA No.5560/Mum/2024 (A.Y. 2017-18) Scion Enterprises Pvt. Ltd. 2 erred in rejecting books of accounts u/s 145(3) of the Income Tax Act, 1961, without considering the facts and circumstances of the case. 2) The Learned CIT (A) has erred in law and on facts in upholding the assessment order passed u/s 143(3) of the Act, wherein the Learned Assessing Officer has rejected books of accounts u/s 145(3) of the Income Tax Act, 1961, without issuing the show cause notice, is in violation of the provision of law, hence, order passed u/s 143(3) is bad in law and void. 3) The learned CIT (A) has erred in treating that the appellant has involved in providing accommodation entries to various concern, without considering the facts and circumstances of the case. 4) The Learned CIT (A) has erred in upholding the assessment order, wherein, The Learned Assessing Officer has made an addition of Rs. 2,76,09,380/- by making a disallowance of 3% of total sales as well as purchases amounting to Rs.92,03,12,657/- without considering the facts and circumstances of the case. The impugned addition to income has been made after rejection of books of accounts by the Learned Assessing Officer u/s 145(3), which renders the basis of addition incongruous” 4. Brief facts of the case are that the assessee company had filed its return of income dated 31.10.2017, declaring total income at Rs. 11,530/-. The assessee’s case was selected for complete scrutiny and notices u/s. 143(2) and 142(1) of the Act were duly issued and served upon the assessee. The learned Assessing Officer ('ld. A.O.' for short) observed that the information from DCIT, Central, Circle-6(1), Mumbai, where copy of the statement of Shri Mukesh Mehra recorded u/s. 131 of the Act, dated 23.08.2017, during the search action u/s. 132 of the Act in the case of M/s. Plantinum Textiles Pvt. Ltd. (main company) related to SVP group revealed that the assessee company was not involved in any genuine business and was controlled by Shri Mukesh Mehra, director of the assessee company which was into providing accommodation entries of sales and purchases to various parties without actual delivery of goods. The ld. AO observed that Shri Mukesh Mehra was a director of the assessee company from 08.02.2010 to 28.02.2017 and thereafter Smt. Goldy Mehra W/o Shri Mukesh Mehra and Shri Aayush ITA No.5560/Mum/2024 (A.Y. 2017-18) Scion Enterprises Pvt. Ltd. 3 Mehra S/o. Shri Mukesh Mehra became the directors on 08.07.2017 and 18.02.2017 respectively. It was further observed that Shri Mukesh Mehra had admitted that the assessee company was controlled by him and was involved in providing accommodation entries of purchase and sales, where the ld. AO also observed that there were deviation in accounting standards, where the assessee company has failed to include certain transaction required u/s. 145A(b) of the Act which had bearing on the profit and loss account. The ld. AO made an addition of 3% amounting to Rs. 2,76,09,380/- on the total turnover of Rs. 92,03,12,657/- u/s. 28 of the Act. The ld. AO then passed the assessment order u/s. 143(3) of the Act dated 25.12.2019, determining total income at Rs. 82,82,814/- under the normal provisions and Rs. 51,07,735 to the book profit u/s. 115JB of the Act. 5. Aggrieved the assessee was in appeal before the first appellate authority, who vide order dated 30.08.2024 upheld the addition made by the ld. AO on the ground that the assessee has failed to prove the genuineness of the business transaction, thereby holding the same to be bogus transactions. 6. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A). 7. We have heard the ld. DR and perused the materials available on record. It is observed that the assessee has failed to prove the genuineness of the purchase transaction recorded in the books of accounts neither before the ld. AO nor before the ld. CIT(A), though the assessee has filed the present appeal, it has failed to comply with the proceedings before the Tribunal inspite of several opportunities. The assessee has been non-compliant even before the lower authorities, where it has failed to prove the genuineness of the transaction by way of documentary evidence such as purchase ITA No.5560/Mum/2024 (A.Y. 2017-18) Scion Enterprises Pvt. Ltd. 4 invoice, purchase orders, confirmation from sellers of goods, inward register and outward register maintained at the premises along with various other details. The assessee has not filed any documentary evidence even before us to substantiate its claim. In the absence of any cogent documentary evidence, we find no infirmity in the order of the lower authorities, 8. On the above observation, we deem it fit to dismiss the grounds of appeal raised by the assessee. 9. In the result, the appeal filed by the assessee is dismissed. Order Pronounced under Rule 34(4) of the ITAT Rules by placing result on the notice board on 28.05.2025 Sd/- Sd/- (OM PRAKASH KANT) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 28.05.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "