SHRI MUKESH MEHRA,MUMBAI vs. DY CIT-CC-6(1), MUMBAI

These are appeals by the assessee against respective orders of learned Commissioner of Income Tax (Appeals) for the concerned assessment years.

At the outset, we note that assessee has filed petition for adjournment. We note that assessee has sought several adjournments in the past also. Since, assessee is regularly seeking adjournment without any cogent reason, this adjournment petition has been rejected and the appeal is being disposed-off by hearing the Ld. DR and perused the records.

The issues raised in these appeals are common and connected. Hence, by this common order, we are disposing-off the appeals.

For the sake of reference, we are referring to AY 2012-13:-

The issue raised is that ld.CIT(A) erred in sustaining the addition on bogus transaction of the assessee @2% instead of 0.01% as admitted by the assessee.

Brief facts of the case are that during the assessment proceedings, the AO observed that a search action u/s. 132 of the Income tax Act was carried out in the case of Shri Vallabh Pittie Group (herein referred to as SVP group) on 22.08.2017. During the course of search, various incriminating documents/computer data backup in annexure A-31 were seized from the office premises of SVP group at 97 & 99, 9th Floor, Maker Tower, 'F', Cuffee Parade, Mumbai-05 and the same were related to Shri Shomeshwara Spun Pvt. Ltd wherein the appellant is a Director. Subsequently, a search action u/s. 132 of the Act was carried out at the residence of Shri Mukesh Mehra, the appellant and a survey u/s,133A was carried out on 23.08.2017 in the case of appellant's company, M/s.Shri Someshwara Spun Ltd at Room No.36, 3rd Floor, Vasantwadi, 413E, Kalbadevi, Mumbai. During the survey proceedings, statement of employees of SVP Group mainly Mr.Sanjay Chhada, Mr.Bhupinder Singh and Mr.Shobit Nandavana were recorded under oath wherein they admitted that purchases of goods, both capital as well as revenue from various parties incsluding the appellant and its business concerns were accommodation entries and they were not supported by bills, lorry receipts and other supporting documents and without physical delivery of goods. Shri Chirag Pittie, the main person of SVP group was not able to prove these facts and also unable to provide proof of actual purchase of goods. Statement of Shri Mukesh Mehra, the appellant and his employees were recorded during the search proceedings and it was evident from their statements that the appellant and his concerns were indulged in providing accommodation entries to various parties including SVP Group. The AO was of the view that the appellant was not able to give any cogent explanation as to how the goods were procured and sold to various parties. Therefore, the AO rejected the books of account u/s. 145(3) of the Act and estimated the net profit at 2% from the bogus transactions of purchases and sales. Accordingly, the AO made an addition of Rs.45,13,854/- (erroneously taken as Rs.45,13,85,432/-by the AO).”

Upon assessee’s appeal, Ld.CIT(A) confirmed the AO’s action by holding as under:-

Against the above order, assessee is in appeal before us.

We have heard the Ld. DR and perused the records. We find that as per assessees own admission, it was the business of providing accommodation entries. Hence, the entire sales and purchases were accepted to be bogus and assesssee admitted that he was getting 0.01% as commission. In these facts, there is no reason why the books of assessee should be accepted. The rejection of the books in the light of clear admission of the assessee that he is a bogus accommodation entry provider is quiet correct and there is no infirmity in this regard. Assessee has been found to be indulging in bogus accommodation entries, the income attributed to such transactions cannot be determined as per the whims and fancies of the assessee. On the facts and circumstances of the case, in our considered opinion, the 2% commission attributed by the revenue authorities is very fair. Hence, we do not find any infirmity in the same and we uphold the same.

In the result, this appeal by the assessee stand dismissed.

Since, the facts are identical and grounds are also identical. Our above adjudication applies mutatis mutandis to all the appeals referred above. Hence, all the assessee’s appeals stands dismissed.