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Income Tax Appellate Tribunal, MUMBAI BENCH “G”, MUMBAI
Before: SHRI VIJAY PAL RAO & SHRI GAGAN GOYAL
ORDER PER GAGAN GOYAL, A.M: These two appeals by the assessee are directed against the common order of Commissioner of Income Tax (Appeals)-48, Mumbai [hereinafter referred to as ‘the CIT(A)’] vide orders dated 31.07.2019 for the Assessment Years (AY) 2011-12 & 2010-11. For both the years’ assessee raised similar grounds of appeal and facts are also found to be same. Hence both the appeals for sake of convenience disposed of by common order.
(A.Y. 2011-12) (A.Y. 2010-11) 2. The assessee didn’t file its return of income under section 139 for both the years i.e. assessment year 10-11 and 11-12. Subsequently the case was reopened under section 148 of I.T. Act 1961 on the basis of information received from DDIT(INV), Unit -7(4), Mumbai, alleging that the huge unexplained credits are found in the assesses bank account.
The copy of reason recorded was communicated to the assessee. The reason recorded for reopening the assessment is as under “i) 33 group /linked accounts with the business of stock trading and commission agents of Gujarat zone are connected to 36 accounts of Calcutta zone by way of non trading internal transfer transactions with non related business entities within same group and connected accounts. The assessee is one of the entities from the group in whose account there are huge deposits in its bank account during financial year 09-10. ii) The details of deposits and the bank accounts are as under. Sr No Details of Bank account F.Y. Total deposits(in Rs) 1 Development credit bank 2009-10 13,37,13,307/- ltd,Dahisar,Mumbai A/C No 00720200000471 held in the name of M/S G.R.Pandya Share Broking Ltd 2 SaraswatCoop. Bank ltd Kandivali(w), 2009-10 6,38,03,174/- Mumbai A/C No 51732 held in the name of M/S G.R.Pandya Share Broking Ltd 3 Yesbank7,Ahemdabad,Gujrat A/C No 2009-10 5,52,67,512/- 000784100000729 held in the name of M/S G.R.Pandya Share Broking Ltd iii) In response to the notice issued u/s.148 of the Act, the assessee vide letter dated 05.09.2017, submitted copy of e-filed return of income and requested to treat the same as return of income filed in response to notice u/s (148) of the Act dated 31-03- 2017 and also requested to provide the reasons recorded to reopen the assessment proceedings. The copy of reason recorded was provided to the assessee vide order sheet entry dated 07-09-2017. The assessees vide letter dates 15-09-2017 filed (A.Y. 2011-12) (A.Y. 2010-11) objection to the reason recorded for the reopening of the case. The same has been removed by passing order dated: 22-11-2017.”
Assessee was asked by investigation wing to explain the amount deposited amounting to Rs 25, 27, 83,993/-. Further notice u/s 133(6) issued and bank accounts of the assessee company called for. On verification of the bank statement it is observed that there are huge cash deposits in the bank accounts of the assessee and on the other hand assessee has not filed its income tax return. Thus the credits in the assessee bank account remained unexplained and unaccounted.
Taking into consideration the facts of the case and the legal provisions case analysed in the light of the ratio of various judicial pronouncements by the A.O. vide page no 2,3,4 and 5 A.O. was of the opinion that there were proper reasons to believe that the income chargeable to tax has escaped assessment within the meaning of Sec. 147 of the I.T. Act 1961.
6. This issue of reassessment u/s 147 is dealt with by the LD. CIT Appeal also for the years under consideration and previous assessment years 2000-01 to 2007-08. In his previous orders for the assessment years 2000-01 to 2007-08. Ld CIT appeal as well as Hon’ble ITAT held with elaborate fact finding regarding the relationship between the assessee company and Narendra Shah. On both the stages of appeal reassessment proceedings u/s. 147 to be legally sustainable.
Hence the ground no 1 of the assessee appellant is dismissed as no new fact or legal arguments advanced by the assessee pertaining to Re-assessment u/s. 147 of the I.T. Act, 1961. On verification of the record pertaining to matters under consideration it is also not found that assessee appellant preferred any appeal to the Hon’ble High Court of Mumbai or controverts the finding of Hon’ble ITAT, Mumbai for any year.
(A.Y. 2011-12) (A.Y. 2010-11) 7. Ground no 2, 3, 4 and 6 are interlinked hence disposed of simultaneously with a common finding. We have gone through the assessment order and the order of LD. CIT Appeal.
Ld CIT Appeal relied upon the findings of honourable ITAT in the assessee's own case for assessment year 2007-08 in ITA no 568/M/2014 and 538/M/2014. Honourable ITAT has given a finding of facts regarding undisclosed business of assessee in providing accommodation entries earning commission income 9. Findings of Ld. CIT (A) and ITAT for A.Y. 2007-08 are perimetria with Facts of Assessee’s Case for A.Y. 2010-11 and 2011-12.
On the perusal of entire facts of the case, it is very clear that the facts of the assessee’s case for the A.Y 2010-11 and 2011-12 are exactly similar for the earlier assessment years including A.Y.2007-08 and therefore the facts finding and the relationship of the assessee company vis a vis . Narendra Shah and their collusion in running the business of providing entries by opening bank accounts in various banks are held as valid for A.Y. 2010-11 and 2011-12 also.
In appeal proceedings, Assessee Company has submitted that assessee has made a police complaint against Shri Narendra Shah to the senior inspector Police, Crawford Market Mumbai for opening fraudulent bank accounts in the assessee’s name. However, it is seen that the complaint is dated 01.12.2018 which is almost a decade after the relevant period and is apparently done to create certain records for the purpose of assessee’s argument before the I.T Authorities’.
Further the letter to respective banks regarding fraud by Shri Narendra Shah is also dated December 2018. The letter is written only to DCB Bank Ltd (A.Y. 2011-12) (A.Y. 2010-11) and that too has been written by Bipinchandra S. Shah AR of the assessee. No proof of his authority to take up this matter on behalf of company has been filed. Obviously this complaint to Police and enquiries with the bank are afterthought and do not have any credible evidentiary value as these actions (though intrinsically of no worthwhile value) were taken in December, 2018 and are not contemporaneous to the happening of event. Therefore these claims and arguments of assessee are rejected out rightly.
Therefore, it is very clear that assessee was in collusion and in the knowledge of activities of Narendra Shah even for the bank accounts relevant for A.Y. 2010-11 and 2011-12 on the line similar to the facts discussed and upheld by CIT (A) and ITAT for A.Y. 2007-08.
Since inception assessee appellant and Mr. Narender Shah were together in the activities of providing accommodation entries and earning commission out of that. All the facts of the case have been brought on record several times before AO, Ld. CIT (A) and Hon’ble ITAT, Mumbai. Facts of the case, modus operandi of the assessee and involvements of concerned persons are already seized in terms of conclusion by the final facts finding authority, i.e. ITAT, Mumbai.
In all the years assessee has same arguments and set of submissions, those have already been seized in terms of conclusion by the final facts finding authority, i.e. ITAT, Mumbai.
In the result we don’t found any substance in the appeal of the assessee for both the years and assessee appellant failed to impress us in terms of differentiating the finding of earlier years in the case of assessee’s own matter decided by Hon’ble ITAT, Mumbai.
(A.Y. 2011-12) (A.Y. 2010-11)
In the result, appeal filed by the assessee is dismissed for both the years.
Order pronounced in the open court on 28th day of June, 2022.