DANCO ENTERPRISES INDIA PRIVATE LIMITED ,MUMBAI vs. ITO, WARD 9(3)(1), MUMBAI

PER OM PRAKASH KANT, AM

These two appeals by the assessee are directed against orders, both dated 29.07.2024 passed by the Ld. Commissioner of Income- tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2016-17 and 2017-18 respectively.
As identical issues in dispute are involved in these appeals therefore same were consolidated order fo
2. Firstly, we take
5022/Mum/2024 for by the assessee are r
1. On the in law that th
Officer the Ac of the A 2. On the in law, of Rs.
accoun
Basan alleged that th electric busine
3. Briefly stated, fa limited company was projects, contracts an reference, the asses declaring total inco
Assessing Officer re carried out in “One proceedings, it was engaged in the busin being one of the b
Danco Ent
ITA Nos. 50

heard together and disposed of r the sake of convenience.
e up the appeal of the asses r assessment year 2016-17. The eproduced as under:
e facts and in the circumstances of the c w the Ld. NFAC erred in not considering he assumption of juri iction by the Ld. A r is bad in law as the conditions laid dow t for initiating reassessment proceeding
Act have not been fulfilled.
e facts and in the circumstances of the c
, the Ld. NFAC erred in confirming entire
9,37,20,787/- under section 69C of th nt of purchases of various materials fr t Marketing Private Limited by treating d bogus purchases without appreciating he appellant has made genuine purchase cal turnkey project in the regular co ess.
acts of the case are that the ass s engaged in the business of ele nd trading of the goods. During ssee filed return of income ome at Rs.63,60,965/-. Sub ceived information that a sea
World group” on 08.02.2020 .
found that “One World group ness of providing bogus entries a eneficiary of receiving bogus/
terprises India Pvt. Ltd.
2
022 & 5023/MUM/2024
ff by way of this ssee in ITA No.
e grounds raised case and the fact
Assessing wn under u/s 147
case and addition e Act on rom M/s them as the facts es for the ourse of sessee, a private ectrical turn key g the year under on 29.11.2016
bsequently, the arch action was In said search p” entities were and the assessee
/accommodation entry from ‘One W amounting to Rs.9, assessment year un
Officer recorded reas and issued notice u/
the assessee filed re income at Rs.63,60
proceedings, the asse credit, party ledger, d etc. and explained as compared to last ye details supporting tr of document but sam referred to statemen
Marketing Ltd. which The relevant finding under:
“14. On fur submitted by from M/s. B proceedings i statement wa the CEO of M
Shri. Rajesh M
" There is no companies ex generate bogu in the range o persons to us
Danco Ent
ITA Nos. 50

World group’ concern of bo
,37,20,787/- in the period r nder consideration. Accordingly ons to believe that income esca
/s 148 of the Act on 31.03.202
eturn of income on 15.12.2021
0,970/-. In the course of the essee filed detail of purchase in delivery challans, lorry receipt, s why the purchases had increa ear. The Assessing Officer fur ransportation for purchase and me were not submitted. Then, A nt of Shri Rajesh Mehta, CE h is one of the concern of the On g of the Assessing Officer is rther verification of information and the assessee, 90% of the submitted invo
Basant Marketing Limited. During th in the case of M/s.Oneworld group in M as recorded from Shri. Rajesh Mehta on 08
M/s. Basant Marketing Limitedl. In his s
Mehta had admitted as under:
o business carried out in these compa xist on paper and are used by several p us sales and bogus purchases. I get a co of 54 paisa per 100Rs. Transaction for le e my companies"
terprises India Pvt. Ltd.
3
022 & 5023/MUM/2024
ogus purchases relevant to the y, the Assessing aped assessment
21. In response,
1 declaring total e reassessment nvoices, letter of payment details ased to 160% as rther called for relevant copies
Assessing Officer
EO M/s Basant ne World group.
reproduced as Invoices oices were he search
Mumbai, a 8.11.2019
statement, anies. The persons to ommission tting other

clear from the above statement from CE keting Limited that their company had or purchases. In this instant case, out of rchases amounting to Rs.9,37,20,787/-w sant Marketing Limited.
nse to show cause notice issued, the ass r personal hearing through Video confer e was heard on 30.03.2022@ 6.20
lained with regard to the issue and also er the purchases as bogus purchases.
anation of the assessee were carefully e nnot be accepted as it is very clear from hat the purchases amounting to Rs. 9,37
urchases only.
bove circumstances, the purchases made f eting Limited by the assessee is to be t ases and the same were treated as un u/s.69C of the Act and added to the assessee.
eal, the assessee submitted tha ce issued by the Assessing Offic ere no transactions with ‘One that during relevant period p ts who used to set up deals a urn to used gets commission ller or the both. The assessee ased the goods through agents a mitted that corresponding sales w ver rejected the contention of th nce observing as under:
g the course of present appellate pro s failed to rebut the findings of the AO terprises India Pvt. Ltd.
4
022 & 5023/MUM/2024
EO of M/s.
d provided f the total were made essee has rence and PM. The requested examined.
the above
7,20,787/- from M/s.
treated as nexplained e returned at in response to cer, the assessee
World group. ’
purchases were and contact the either from the submitted that and not directly.
were also made.
he assessee and oceedings, the O. As from the above discuss had provided opinion that Rs.9,37,20,78
authority. Th issue are dism
5. Before us, the L containing pages 1 to 6. The ground No validity of the reass that juri iction as a as the condition laid u/s 147 of the Act h assessee referred to reasons recorded and referred to M/s Basa and only referred to submitted that the d to the assessee duri specific request mad
18.03.2022. The Ld.
cause notice issued
Marketing Pvt. Ltd. A and submitted that presumptions only, h and need to be quash
Danco Ent
ITA Nos. 50

sion, as the company M/s. Basant. Mark d bogus bills for purchases, I am of th the AO rightly made the impugned
87/- warranting no interference of erefore, the Grounds raised by the ass missed.”
Ld. counsel for the assessee file o 127. o. 1 of the appeal of the ass sessment. The assessee has m assumed by the Assessing Offic d down under the Act for initiat have not been fulfilled. The Ld.
Paper Book page 40, which is d submitted that the Assessing ant Marketing Pvt. Ltd. in the re o One World group concern. T etail of the One World group we ing the reassessment proceedi de to the Assessing Officer vi counsel further referred that ev also there was no reference
Accordingly, he assailed the re reasons recorded are vague an hence reassessment proceedings hed.
terprises India Pvt. Ltd.
5
022 & 5023/MUM/2024
keting Limited he considered d addition of the appellate sessee on this ed a Paper Book sessee relate to mainly contested er is bad in law ting proceedings counsel for the s a copy of the g Officer has not easons recorded
The Ld. counsel ere not provided ngs, in spite of ide letter dated ven in the show of M/s Basant easons recorded nd based on the s are bad in law

ry, the Ld. Departmental Repr ciency’ or the ‘correctness’ of the is not to be seen at the sta could be examined during th submitted that during the essee was duly intimated the na ng Pvt. Ltd. from whom the ass re under the cloud. Therefore, essee.
rival submissions of the parti ls on record. The reasons recor vailable on Paper Book page 40
/ M/s, pened assessment proceedings u/s.147
AN : AAECD1889M - AY : 2016-17- Regar er dated 15.12.2021. sion of Information and documents.
e to the above-mentioned notice u/s 144
1 ,we hereby state submit & request befo
:
he information and details available with has taken accommodation entry of bogu
0,787/- during the financial year 2015-2
up concerns who is engaged in the busi nd the group companies are paper compan real business activities and has s s and bogus sales.
terprises India Pvt. Ltd.
6
022 & 5023/MUM/2024
resentative (DR) e material relied age of recording he reassessment reassessment ame of the entity essee had made he rejected the ies and perused rded in the case are reproduced of the Act - in rding.
of the Income- ore your good- this office, the us purchase of 2016 from One iness of bogus nies and there shown bogus

Hence, reaso chargeable to of sec. 147 of With referenc made any pu
One World Gr
6.3 On perusal of th recorded reasons ba course of the search group. It is noted tha group of the One Wor in incorrect to that ex purchase amount in the books of accoun
M/s Basant Marketi find any vagueness i challenging validity o
6.4 The next groun the Ld. counsel for th
29 of the Income-tax the additional evide reproduced as under 2. The circum the said docu and the Ld.
during the co explained belo
Danco Ent
ITA Nos. 50

on to believe that this amount of Rs.
tax has escaped from assessment within f the IT Act".
ce to the above we would like to state tha urchases/sales amounting to Rs.9,37,2
roup.”
he above, we find that the Asses ased on the information recei h proceedings at the premises o at M/s Basant Marketing Pvt. L rld group, thus, the information xtent. The Assessing Officer has the reasons recorded which is nt of the assessee correspondin ing Pvt. Ltd. In the circumstan in the reasons recorded, theref of reassessment is accordingly d nd is in respect of merit of addi he assessee has filed an applica
Rules, 1962 (in short ‘the Rule ence. The relevant part of the :
mstances which prevented the appellant fr uments before the Learned Assessing Offi
Commissioner of Income Tax (Appeals) ourse of proceedings before the said a ow:
terprises India Pvt. Ltd.
7
022 & 5023/MUM/2024
9,37,20,787/- n the meaning at we have not 20,787/- from ssing Officer has ived during the of the one-word
Ltd. is one of the n is not factually s mentioned the also referred in ng purchase fro nces, we do not fore, the ground ismissed.
ition. Before us, ation under Rule es’) for admitting e application is from producing ficer ('Ld. A.O.')
) ['Ld. CIT(A)'], authorities are 3. In 2017, th and the bank as Non-Perfor under Securi
Enforcement the appellant irregularities a 4. Further, th appellant com due to the var
5. In 202
were ongoing records and accordingly, i
6. Even du the appellant documents an CIT(A).
7. Rece authorities, t documents fo
8. According documentary submit in the f
Sr. No.

Particulars

Danco Ent
ITA Nos. 50

he appellant company was incurring bu k account of the company was overdrawn rming Asset. A notice was also issued on tisation and Reconstruction of Financia of Security Interest Act (SARFAESI Act') t company was occupied in complying and other proceedings.
he relevant financial records and docu mpany for the year under consideration w rious ongoing proceedings before various
21-2022, when the impugned assessmen g, the appellant company did not have documents relating to A.Y. 2017-18 o t could not adequately reply to the notices uring the pendency of the appeal before t was unable to locate its relevant financia nd therefore, could not produce the same ently, on completion of the other proce the appellant was able to collate its r F.Y. 2016-17, relevant to A.Y. 2017-18. gly, the appellant has compiled t evidences in a paperbook, which it form of additional evidence before the Ho
Page No.

dgment and Computation of Y. 2017-18
1-3

8 of the Act, dated 31.03.2021 4
u/s 142(1)
5-10
otice dated 12.03.2022
11-13
cause notice filed on 14-17

sant Marketing Limited terprises India Pvt. Ltd.
8
022 & 5023/MUM/2024
usiness losses n and declared n the company al Assets and ). Accordingly, with banking uments of the were scattered authorities.
nt proceedings e its financial on hand and s issued.
the Ld. CIT(A), al records and before the Ld.
eedings before records and the following would like to on'ble IT AT:
Whether available with lower authorities

NO YES
YES
YES
YES a. Ledger Acc b. Purchase I c. Bank State purchase parti

count
18-19

Invoices and Delivery Note
20-31

ement reflecting payment to ies
32-36

apping of alleged bogus corresponding sales
37

considering facts and circumstances of t requested to kindly admit the addition portant and plays a vital role in disposin nd.
sion of Rule 29 of of the Income-tax (Appe are reproduced as under:
f additional evidence before the Tribunal.
ties to the appeal shall not be entitle idence either oral or documentary before ibunal requires any document to be pro e examined or any affidavit to be filed t or for any other substantial cause, or , if t have decided the case without givi o the assessee to adduce evidence eit them or not specified by them, the Tribuna d, may allow such document to be produc ed or affidavit to be filed or may allow su of the Hon'ble Tribunal to admit addition with Rule 29 of the Income Tax Appe fallen for consideration before a Divis t in the case of CITv. Ku. Pa. Krishnan [2
ann.com 130 (Mad.). It has considered th when Rule 18(4) is read with Rule ed Rules, there would not be any difficu s of Rule 29, the additional evidence ore the Tribunal.
e seen from the peculiar facts of the pre d a bonafied reason to not file the afores fore the lower authorities. It is therefo appellant to kindly admit the additional e terprises India Pvt. Ltd.
9
022 & 5023/MUM/2024
NO NO NO NO the case, your nal evidences, ng the present ellate Tribunal) ed to produce e the Tribunal, oduced or any to enable it to the income-tax ing sufficient ther on points al, for reasons ced or witness ch evidence to nal evidence in ellate Tribunal sion Bench of 2012] 345 ITR he matter and e 29 of the ulty in holding can also be esent case the aid additional ore, a humble evidence.”

Danco Ent
ITA Nos. 50

circumstances referred by the as in view of fact that docum ation of the issue in dispute merit, therefore, we feel it approp e file of the Assessing Officer for evidences filed by the assessee merit of the addition i.e. groun back to the file of the Assess ent year 2017-18 in ITA No. 50
ds have been raised except cha ounds raised in assessment ye mutandis.
oth the appeals of the assessee ced in the open Court on 30/0
/-
S
AR SINGH)
(OM PRAK
MEMBER
ACCOUNTA terprises India Pvt. Ltd.
10
022 & 5023/MUM/2024
assessee in the ments filed are involved in the priate to restore r deciding afresh before us. The nd No. 2 of the sing Officer for 023/Mum/2024
ange of amount ear 2017-18 are e are allowed for 01/2025. d/-
KASH KANT)
ANT MEMBER

Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.

////

Danco Ent
ITA Nos. 50

ded to :

BY ORDER

(Assistant Re

ITAT, Mu terprises India Pvt. Ltd.
11
022 & 5023/MUM/2024
R, gistrar) umbai