M/S TERA NATURALS RESOURCES PRIVATE LIMITED,MUMBAI vs. ITO WARD 3(3)(3), MUMBAI

This appeal by the assessee is directed against order dated 25.01.2023 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2018-19, raising following grounds:

1. (a) The Ld. CIT (Appeals) erred in law and facts in confirming the addition made by the National e-Assessment Center (NeAC) amounting to Rs.54,61,29,865/-u/s.68 and 69 of the Act without conducting any independent enquiries to pursue the actual facts of the case and merely relying on M/s Tera Naturals Resources Pvt. Ltd. M/s Tera Naturals Resources Pvt. Ltd. 2 ITA No. 968/Mum/2023 findings of the NeAC which itself was based on surmises findings of the NeAC which itself was based on surmises findings of the NeAC which itself was based on surmises and conjectures. and conjectures.

2. Briefly stated facts of the case are that for the year under Briefly stated facts of the case are that for the year under Briefly stated facts of the case are that for the year under consideration, the return of income filed by the assessee was consideration, the return of income filed by the assessee was consideration, the return of income filed by the assessee was selected for limited scrutiny for verification of foreign outward selected for limited scrutiny for verification of foreign selected for limited scrutiny for verification of foreign remittances sent by the assessee. The statutory notices under the remittances sent by the assessee. The statutory notices under the remittances sent by the assessee. The statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) were issued and complied tax Act, 1961 (in short ‘the Act’) were issued and complied tax Act, 1961 (in short ‘the Act’) were issued and complied with. However, no details were submitted by the assessee to the with. However, no details were submitted by the ass with. However, no details were submitted by the ass Assessing Officer. T Assessing Officer. The Assessing Officer (AO) in p in para 4 of the assessment order passed on 07.05.2021 u/s 143(3) of the Act, has assessment order passed on 07.05.2021 u/s 143(3) of the Act assessment order passed on 07.05.2021 u/s 143(3) of the Act mentioned e various notices issued mentioned e various notices issued, of which no compliance no compliance was made except seeking adjournment by the assessee. except seeking adjournment by the assessee. except seeking adjournment by the assessee. The Assessing Officer verified the available records and observed Officer verified the available records and observed that in the profit that in the profit and loss account, sales and purchases were disclosed at Rs. Nil. sales and purchases were disclosed at Rs. Nil. sales and purchases were disclosed at Rs. Nil. The other income was only Rs.500 The other income was only Rs.500 and net loss of Rs.23,256/ of Rs.23,256/- was only claimed in the profit and loss only claimed in the profit and loss account. The Assessing Officer The Assessing Officer also observed that the information colle the information collected from DBS Bank Ltd. cted from DBS Bank Ltd. was not found matching with was not found matching with the outward and inward foreign outward and inward foreign remittance. The assessee took the plea of the prevailing Covid The assessee took the plea of the prevailing Covid The assessee took the plea of the prevailing Covid situation and death of the accountant situation and death of the accountant for seeking adjournment for seeking adjournment but still after availing the still after availing the adjournments, ultimately no information was no information was filed before the AO, thus, the AO decided the assessment on the decided the assessment on the basis of the evidence available on record and made addition for he evidence available on record and made addition for he evidence available on record and made addition for unexplained expenditure of unexplained expenditure of outward foreign remittance amounting foreign remittance amounting to Rs 54,61,29,865/- - u/s 68 & 69 of the Act. On further appeal, On further appeal,

M/s Tera Naturals Resources Pvt. Ltd. M/s Tera Naturals Resources Pvt. Ltd. 3 ITA No. 968/Mum/2023 the assessee took two adjournments before the Ld. CIT(A) and the assessee took two adjournments before the Ld. CIT(A) and the assessee took two adjournments before the Ld. CIT(A) and thereafter no compliance was made thereafter no compliance was made on other two occasions. In the other two occasions. In the circumstances, the Ld. CIT(A) dismissed the appeal of the assessee circumstances, the Ld. CIT(A) dismissed the appeal of the assessee circumstances, the Ld. CIT(A) dismissed the appeal of the assessee in default observing as under: in default observing as under:

“6.2 The facts of the case as noted above are that The facts of the case as noted above are that The facts of the case as noted above are that the appellant has not pursued the appellant has not pursued the appeal despite the appeal despite assessee being granted several opportunities. In assessee being granted several opportunities. In assessee being granted several opportunities. In response to the notices dated 29.08.2022 & response to the notices dated 29.08.2022 & response to the notices dated 29.08.2022 & 22.09.2022 22.09.2022 22.09.2022 the the the assessee assessee assessee had had had requested requested requested for for for adjournments which were con adjournments which were considered at that time sidered at that time and and and further further further opportunities opportunities opportunities were were were given given given to to to the the the assessee. assessee. assessee. Vide Vide Vide notices notices notices dated dated dated 01.11.2022 01.11.2022 01.11.2022 & & & 10.01.2023 it was also made clear that already 10.01.2023 it was also made clear that already 10.01.2023 it was also made clear that already adjournments had been provided twice and in case adjournments had been provided twice and in case adjournments had been provided twice and in case no reply was received then it shall be deemed that no reply was received then it shall be deemed that no reply was received then it shall be deemed that you have nothing to say in this matter and the case u have nothing to say in this matter and the case u have nothing to say in this matter and the case would be adjudicated as per material available on would be adjudicated as per material available on would be adjudicated as per material available on record. Clearly therefore no details, documents or record. Clearly therefore no details, documents or record. Clearly therefore no details, documents or submissions have been provided to come to any submissions have been provided to come to any submissions have been provided to come to any conclusion other than those arrived at by the conclusion other than those arrived at by the conclusion other than those arrived at by the assessing off assessing officer in the assessment order. Being icer in the assessment order. Being quite aware of these facts and the possible quite aware of these facts and the possible quite aware of these facts and the possible conclusions that may be drawn the assessee did not conclusions that may be drawn the assessee did not conclusions that may be drawn the assessee did not file any written submissions. That clearly Connotes file any written submissions. That clearly Connotes file any written submissions. That clearly Connotes that the assessee deems itself to be on weak footing that the assessee deems itself to be on weak footing that the assessee deems itself to be on weak footing and thus remained in and thus remained incommunicado. On perusal of communicado. On perusal of assessment order also it gets revealed that assessment order also it gets revealed that assessment order also it gets revealed that assessee was not co assessee was not co-operating during assessment operating during assessment proceedings. As per assessment order, at first the proceedings. As per assessment order, at first the proceedings. As per assessment order, at first the assessee denied any foreign outward remittance assessee denied any foreign outward remittance assessee denied any foreign outward remittance then on being confronted with evidence then on being confronted with evidence from DBS from DBS bank in possession of the department the assessed bank in possession of the department the assessed bank in possession of the department the assessed decided, in its own wisdom, not to respond even decided, in its own wisdom, not to respond even decided, in its own wisdom, not to respond even after adjournments had been granted. If is evident after adjournments had been granted. If is evident after adjournments had been granted. If is evident from insight portal as well as the information from insight portal as well as the information from insight portal as well as the information provided by.DBS Bank the filetl provided by.DBS Bank the filetl as caffed for wis as caffed for wis 133(6) of the IT Act that t 33(6) of the IT Act that the assessee company he assessee company remitted (su remitted (substantial amounts through DBS Bank. bstantial amounts through DBS Bank. The DBS Bank in its compliance furnished KYC of The DBS Bank in its compliance furnished KYC of The DBS Bank in its compliance furnished KYC of M/s Tera Naturals Resources Pvt. Ltd. M/s Tera Naturals Resources Pvt. Ltd. 4 ITA No. 968/Mum/2023 the accounts and bank statement of the assessee the accounts and bank statement of the assessee the accounts and bank statement of the assessee company. On close perusal of bank statement of the company. On close perusal of bank statement of the company. On close perusal of bank statement of the assessee total assessee total of remitted amount and remitting of remitted amount and remitting charges of 399 counts comes to Rs. 54,61,29,865/ charges of 399 counts comes to Rs. 54,61,29,865/ charges of 399 counts comes to Rs. 54,61,29,865/- and corresponding credits of 215 counts comes to and corresponding credits of 215 counts comes to and corresponding credits of 215 counts comes to Rs.54,61,16,548/ Rs.54,61,16,548/- On going through the underlying On going through the underlying information elements, it was also evident that the information elements, it was also evident that the information elements, it was also evident that the remitted amount was not remitted amount was not commensurate with the commensurate with the balance sheet or profit or loss accounts of the balance sheet or profit or loss accounts of the balance sheet or profit or loss accounts of the company. The department in the absence of any pursuance in The department in the absence of any pursuance in The department in the absence of any pursuance in the matter of any sort even till the date of passing the matter of any sort even till the date of passing the matter of any sort even till the date of passing order is left with no choice but to finalize the case order is left with no choice but to finalize the case order is left with no choice but to finalize the case against against the the assessee. assesse e. There There is is no no evidence evidence propounded in respect of what was claimed in the propounded in respect of what was claimed in the propounded in respect of what was claimed in the "Statement of facts" namely wrong addition of Rs. "Statement of facts" namely wrong addition of Rs. "Statement of facts" namely wrong addition of Rs. 54,61,29,865/ 54,61,29,865/- u/s 68 & 69 of the Act on account of u/s 68 & 69 of the Act on account of outward foreign remittances. There are no evidences outward foreign remittances. There are no evidences outward foreign remittances. There are no evidences canvassed in respect of the o canvassed in respect of the other claims made in the ther claims made in the 'Statement of Facts' either. The AO's order needs no 'Statement of Facts' either. The AO's order needs no 'Statement of Facts' either. The AO's order needs no intervention. There is nothing to rebut what had intervention. There is nothing to rebut what had intervention. There is nothing to rebut what had been arrived at by the AO after diligent enquiries been arrived at by the AO after diligent enquiries been arrived at by the AO after diligent enquiries and sufficient opportunities. The findings, in respect and sufficient opportunities. The findings, in respect and sufficient opportunities. The findings, in respect of of all all the the above above issues, issues, clearly clearly require require no no intervention. intervention.”

M/s Tera Naturals Resources Pvt. Ltd. M/s Tera Naturals Resources Pvt. Ltd. 5 ITA No. 968/Mum/2023

M/s Tera Naturals Resources Pvt. Ltd. M/s Tera Naturals Resources Pvt. Ltd. 6 ITA No. 968/Mum/2023 3.1 On hearing dated 27/7/23, On hearing dated 27/7/23, again none attended however none attended however a written request was was made on behalf of the authorised signatory of made on behalf of the authorised signatory of the assessee for seeking further time. Accordingly, matter was for seeking further time. Accordingly, matter was for seeking further time. Accordingly, matter was posted for hearing for hearing on 08.08.2023. On said date again 08.08.2023. On said date again an adjournment was filed adjournment was filed on behalf of Advocate Shri Dharan Dharan V. Gandhi by his junior, but no letter of authority no letter of authority by the assessee was filed by the assessee was filed. So in first round of call of call, adjournment request was rejected and the , adjournment request was rejected and the person attended was asked to file letter of authority in favour of Mr person attended was asked to file letter of authority in favour of Mr person attended was asked to file letter of authority in favour of Mr Dharan V Gandhi .In second In second round of call of case, Mr Djaran V of call of case, Mr Djaran V Gandhi appeared and submitted Gandhi appeared and submitted that he would file the said letter of would file the said letter of M/s Tera Naturals Resources Pvt. Ltd. M/s Tera Naturals Resources Pvt. Ltd. 7 ITA No. 968/Mum/2023 authority by 2.00 P.M. of that day by 2.00 P.M. of that day. Accordingly, on his undertaking . Accordingly, on his undertaking, arguments on behalf of the assessee were heard. He also complied arguments on behalf of the assessee were heard. He also complied arguments on behalf of the assessee were heard. He also complied with his undertaking of filing the letter of authority before the time with his undertaking of filing the letter of authority before the time with his undertaking of filing the letter of authority before the time permitted.

M/s Tera Naturals Resources Pvt. Ltd. M/s Tera Naturals Resources Pvt. Ltd. 8 ITA No. 968/Mum/2023 verify deposit of the cost by the assessee verify deposit of the cost by the assessee before commencing the before commencing the proceeding before him. proceeding before him.