CHANDANI GEMS P.LTD,MUMBAI vs. ITO 5(1)(3), MUMBAI

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ITA 7323/MUM/2012Status: DisposedITAT Mumbai23 May 2022AY 2006-074 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal found no reason to interfere with the CIT(A)'s decision, which sustained the additions made by the Assessing Officer. The assessee's failure to provide verifiable details and reconcile discrepancies led to the confirmation of the additions.

What were the facts?

The assessee failed to comply with notices during assessment proceedings, leading to a best judgment assessment under Section 144. The Assessing Officer made additions for share capital and unsecured loans, and estimated business income. The CIT(A) upheld these additions after a remand report indicated non-compliance and discrepancies.

What were the issues?

Whether the CIT(A) erred in not admitting additional evidence and revised grounds of appeal, and whether the additions made by the AO for share capital, unsecured loans, and estimated business income were justified.

Which sections of the Income-tax Act were involved?

Section 144,Section 142(1),Section 143(2),Section 271(1)(b),Section 145(3),Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH, MUMBAI

Hearing: 23.05.2022Pronounced: 23.05.2022

स्थायी लेखा सं./ जीआइआर सं./ PAN/GIR No. : AACCC7539D Appellant .. Respondent Appellant by : None Respondentby : Vranda U. Matkari Date of Hearing 23.05.2022 Date of Pronouncement 23.05.2022 आदेश / O R D E R

PER AMARJIT SINGH, AM:

1.

The present appeal filed by the assessee and directed against the order passed by the ld. CIT(A)-9, Mumbai, which in turn arises from the order passed by the A.O u/s 144 of the Income Tax Act, 1961, for A.Y. 2006-07, dated 20.10.2008. The assessee has raised the following grounds of appeal before us.

2 M/s Chandani Gems Pvt. Ltd. Vs. ITO-5(1)(3)

“1. On the facts and circumstances of the Appellant’s case and in law the Ld. CIT(A) erred in not admitting additional evidence. 2. On the facts and circumstances of the Appellant’s case and in law the Ld. CIT(A) erred in not admitting the revised grounds of appeal

3. On the facts and circumstances of the Appellant’s case and in law the Ld. CIT(A) erred in confirming A.O’s action of rejecting the book results u/s 145(3) of the Income Tax Act, 1961.

4. On the facts and in the circumstances of the appellants case and in law the Ld. Ld. CIT(A) erred in confirming A.O’s action in estimating income at Rs. 18,80,655 being 15% of sales.

5. On the facts and circumstances of the Appellant’s case and in law the Ld. CIT(A) erred in confirming A.O’s action of disallowing entire business expenditure. 6. the facts and in the circumstances of the appellant's case and in law the Ld. Ld. CIT(A) erred in confirming A.O’s action of making an addition of Rs. 1,00,000/- on account of share en capital by invoking section 68 of the Income Tax Act, 1961 .

7. On the facts and in the circumstances of the appellant’s case and in law the Ld. CIT(A) erred in confirming A.O’s action of making an addition of Rs. 24,36,745/- on account of unsecured loans by invoking section 68 of the Income Tax Act 1961.

8. The appellant craves leaves to add, amend, alter modify and or withdraw any of the above grounds of appeal.”

2. This case was listed for hearing more than 11 times continually but nobody has attended from the side of the assessee, therefore, the case is adjudicated after hearing the ld. D.R and on the basis of material on record.

3. The fact in brief is that the return of income declaring total income of Rs. 40,050/- was filed on 22.11.2006. During the course of assessment the assessee has not made any compliance to the number of notices issued u/s 142(1) and notice issued u/s 143(2) of the Act. Even the A.O has levied penalty of Rs.10,000/- u/s 271(1)(b) of the Act for not making compliance to the statutory notice issued during the course of assessment proceedings.

3 M/s Chandani Gems Pvt. Ltd. Vs. ITO-5(1)(3)

Under the circumstances the assessment u/s 144 of the Act was finalized u/s 144 of the Act and total income was assessed at Rs.44,16,400/- after making addition of Rs.1,00,000/- on account of share capital since no supporting details filed to explain the source of share capital and addition of Rs.24,36,745/- was made by treating unsecured loans as unexplained u/s 68 of the Act. The business income of the assessee was also estimated at 15% of sales to the amount of Rs.18,80,655/- for the reason of not submitting detail of purchase/expenses during the course of assessment proceedings.

4.

The assessee filed the appeal before the ld. CIT(A). During the course of appellate proceedings before the ld. CIT(A) the assessee has filed additional evidences. The ld. CIT(A) has called for remand report from the A.O on the additional evidences filed by the assessee. In the remand report, the A.O reported that the assessee has not furnished the required details to verify the additional evidences. The A.o has also observed discrepancies in the submission of the assessee as reported in the remand report elaborated at page 6 to 11 in the order of the ld. CIT(A). After taking into consideration the submission of the assessee the ld. CIT(A) held that the assessee has failed to explain the source of share capital of Rs.1,00,000/-. The ld. CIT(A) has also held that assessee has not furnished copies of bank account of Manekchand Jain and Smt. Mayuri Jain to explain the loan in the hands of the assessee company. It is also stated that assessee has failed to prove the genuineness of the unsecured loan obtained from the aforesaid parties. The ld. CIT(A) has also stated that several discrepancy in the books of account of the assessee were highlighted in the remand report, and most of the transaction were not verifiable.

4 M/s Chandani Gems Pvt. Ltd. Vs. ITO-5(1)(3)

5.

The ld. CIT(A) also stated that assessee has failed to reconciled the discrepancies in the books of accounts. Consequently, the ld. CIT(A) has sustained the additions made by the A.O. After taking into consideration the facts and findings discussed in the order of the ld. CIT(A), we do not find any reason to interfere in the decision of the ld. CIT(A).

6.

In the result, the appeal of the assessee stand dismissed.

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