Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI S. RIFAUR RAHMAN
O R D E R
Per : Kuldip Singh, Judicial Member:
The appellant, M/s. Someshwar Spun Pvt. Ltd. (hereinafter referred to as ‘the assessee’) by filing the present appeal, sought to set aside the impugned order dated 29.01.2021 passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] qua the assessment year 2018-19 on the grounds inter-alia that :- “1) The Learned CIT(A) has erred in law and on facts in dismissing the appeal against assessment order u/s 143(3) r.ws. 153A of the Act dated 27/12/2019, wherein Assessing Officer has erred in rejecting 2 M/s. Someshwar Spun Pvt. Ltd.
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. 10,00,843/- by making a disallowance of 2% of total sales as well as purchases amounting to Rs.5,00,42,168/- 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 is of addition incongruous.”
Briefly stated facts necessary for consideration and adjudication of the issues at hand are: on the basis of search and seizure action in case of Shri Vallabh Pittie Group (SVP group) on 22.08.2018, this case was selected for scrutiny in the compulsory category of search and seizure cases under section 153A/153C read with section 143(3) of the Act. Necessary notices under section 142(1) &143(2) of the Income Tax Act,1961 (for short ‘the Act’) were duly served on the basis of documents and evidences collected from the SVP group during the search and seizure operation, which were incriminating documents, computer’s data back up in annexure A-31 (tally server). On the basis of incriminating material it was found that there was no actual sale/purchase stated to have been taken place in case of assessee and as in case of proprietor concern of Mr. Mukesh Mehra but a mere paper entry, assessment proceedings under section 153A were initiated. 3 M/s. Someshwar Spun Pvt. Ltd.
On the basis of evidence collected as incriminating material by the Revenue Department the Assessing Officer (AO) after declining the contentions raised by the assessee reached the conclusion that SVP group was into bogus transactions with respect to unsecured loans, bogus sales/purchases through accommodation entries including bogus expenditures, statements of Mr. Chirag Pittie, the director of SVP group who was controlling the affairs as well as other key persons namely Mr. Praveen, Mr. Shyam and Mr. Pradeep who were also operating officers of SVP group and the AO, reached the conclusion that the total transactions entered into by the assessee company during the year i.e. total sales and purchases for the years are as under: Total Sales of the year 2,44,69,740/- Total Purchases of the year 2,55,72,428/- Total Transactions 5,00,42,168/-
Declining the contentions raised by the assessee the AO reached the conclusion that as per market practice the commission rate of providing such entries is 2% to 3% of the entry provider and the assessee has failed to prove the supporting evidence, the AO proceeded to hold that the total transactions (sale and purchase) are worked out at Rs.5,00,42,168/- and made disallowance at the rate of 2% of the transactions which comes to Rs.10,00,843/- and brought to tax the same by invoking the provisions contained under section 145(3) of the Act. Accordingly, the AO framed the assessment at the total taxable income of Rs.10,00,843/- under section 153C of the Act.
Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has dismissed the appeal. Feeling aggrieved 4 M/s. Someshwar Spun Pvt. Ltd.
assessee has come up before the Tribunal by way of filing present appeal.
Numerous notices were issued. None appeared on behalf of the same. The assessee has not come up before the Tribunal by putting in appearance for the first 10 adjournments and thereafter continued to seek adjournments on the one pretext or the other. Today again the assessee moved an application for adjournment which is rejected and Bench has decided to dispose of the appeal on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue.
We have heard the Ld. Departmental Representative for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon.
We have perused the order passed by the Ld. CIT(A) who has thrashed the facts in the light of the law applicable thereto after considering the submissions made by the assessee and has rightly reached the conclusion that when the books of account of the assessee have been rejected under section 145(3) of the Act addition made by the AO @ 2% of the transaction value of Rs.5,00,42,168/- being the commission income earned by the assessee in providing bogus sale purchase bills is in accordance with the law and facts on the issue. When the AO has reached a categoric conclusion that both sale and purchase transactions, transacted by the assessee during the year under consideration are bogus then he must have earned commission income for providing bogus sale purchase bills to the parties @ 2% of the transaction 5 M/s. Someshwar Spun Pvt. Ltd.
value, which is an irresistible conclusion, rightly upheld by the Ld. CIT(A).
The assessee has not brought on record any material, nor argued as to how the impugned order passed by the Ld. CIT(A) is not sustainable rather continued to take adjournments on the one pretext or the other. So we find no scope to interfere into the impugned order passed by the Ld. CIT(A).
Resultantly, appeal filed by the assessee is hereby dismissed.
Order pronounced in the open court on 23.12.2022.