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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI R.S. SYAL & SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER R.S.SYAL, VP :
This appeal filed by the assessee is directed against the order passed by the CIT(A)-12, Pune on 13-03-2015 in relation to the assessment year 2010-11.
The first issue raised in this appeal is against the confirmation of addition of Rs.51 lakh.
2 ITA No.924/PUN/2015 Shri Nandgopal Nanak Krishnani
Briefly stated, the facts of the case, as recorded in assessment
order are that a search in the case of Shraddha Group, engaged in
carrying out irrigation contracts, was conducted on 08-09-2010.
Pursuant to it, a consequential search was carried out in the cases
of the assessee, as a proprietor of NNK Constructions, Uniglory
Infra Projects Pvt. Ltd., Shri Sopan D. Patil and Devgiri
Engineering vide a single warrant on 17-09-2010 at the premises
located at Room No.102 and 103, B-Wing, Parmar Trade Centre,
Sadhu Vaswani Chowk, Pune – 01. The Assessing Officer (AO)
has recorded that Uniglory Infra Projects Pvt. Ltd. is a sub-
contractor of Shraddha Group and Shri Sushil Agarwal of Uniglory
Infra Projects Pvt. Ltd. is associated with the assessee-NNK
Constructions, Devgiri Engineering and Shri Sopan D. Patil in
some way or the other. A bundle of loose papers containing 33
pages was seized from the searched premises, that is, 102-103, B-
wing, Parmar Trade Centre, Pune, which is the office of the
assessee. Sh. Sopan D. Patil got a contract in Sangamner from the
Irrigation Department and such work of Sangamner Project was sub-contracted, inter alia, to the assessee. The AO issued notice
u/s.153A of the Act, in response to which the assessee furnished a
return declaring total income of Rs.3,15,50,670/-, which was
subsequently revised to Rs.6,25,41,874/-. The additional income
3 ITA No.924/PUN/2015 Shri Nandgopal Nanak Krishnani
of Rs.3,09,91,204/- was mainly on account of bogus purchases. The AO completed the assessment making addition, inter alia, of
Rs.51 lakh on account of `Labour expenses’ mentioned on page 24
of the seized Bundle No.1. The assessee remained unsuccessful
before the ld. CIT(A). Aggrieved by the same, the assessee has
come up in appeal before the Tribunal.
We have heard both the sides and gone through the relevant
material on record. The addition of Rs.51 lakh has been made on the basis of seized document No.24 which, inter alia, recorded
“Labour payment” of Rs.51 lakh. This page has total of six
transactions totaling Rs.3,05,39,481/-. Apart from that, page 26
also contains a list of certain items totalling Rs.4.69 crore.
Instantly, we are concerned with the amount shown as “Labour
payment” worth Rs.51 lakh on page 24 of the seized document.
The case of the Revenue is that the assessee made payments to Sh.
Sushil Agarwal for securing contracts from the Maharashtra
Government in an illegal way and recorded such amounts in the books of account through accommodation entries, inter alia,
“Labour payment” of Rs.51 lakh. On the other hand, the case of
the assessee is that the items mentioned on page 24 and 26 of the
seized documents contain certain entries which are in the nature of
4 ITA No.924/PUN/2015 Shri Nandgopal Nanak Krishnani
accommodation entries but this Rs.51 lakh was paid directly by Sh.
Sushil Agarwal without involvement of the assessee. In nutshell,
the position is that the assessee made payment to Sh. Sushil
Agarwal for procuring contracts from Maharashtra Government in
an illegal manner and in order to adjust such payments in the books
of account, the assessee inflated expenses. The dispute is about the
sum of Rs.51 lakh which has been shown as “Labour payment” on
page 24 of the seized documents, which is admittedly a chart
containing a list of payments made by the assessee. It is not
understandable as to how the assessee can claim that this single
sum of Rs.51 lakh was paid directly by Sh. Sushil Agarwal as bribe
and not by him, when the same is actually recorded on the
document seized from the assessee and the remaining transactions
are admittedly of the assessee. The fact of this amount passing
over as bribe to Maharashtra Government authorities is not
disputed. Once it is found that this sum of Rs.51 lakh was
admittedly paid, the same is liable to be charged to tax in the hands
of the assessee as it was found recorded along with other entries,
which admittedly pertain to the assessee and furthermore there is
no evidence to show that this Rs.51 lakh was paid by Sh. Sushil
Agarwal. We, therefore, uphold the addition of Rs.51 lakh
sustained in the first appeal.
5 ITA No.924/PUN/2015 Shri Nandgopal Nanak Krishnani
The only other ground is against the confirmation of addition
of Rs.60,74,000/-.
Facts concerning this ground are that a list of suspected
hawala dealers, Mumbai, who had given accommodation entries to
several customers was sent by Sales Tax Department (VAT) of
Maharashtra Government to the Income-tax Department. This list
contained a concern named, Tube India, placed at Sl.No.1119.
The assessee had also shown to have made purchases from this
concern. As the assessee could not produce transport bills,
delivery challans, weightment slips and entries in inward registers
at site in respect of such purchases totaling Rs.60.74 lakh, the AO
recorded in the assessment order that assessee made disclosure of
Rs.60.74 lakh as additional income for the year. He, therefore,
made addition of the said amount, which came to be sustained in
the first appeal. Now, the assessee is aggrieved by such an
addition.
We have heard both the sides and gone through the relevant
material on record. The AO has categorically recorded that when
the assessee was confronted with accommodation entries made
through hawala dealers, he disclosed a sum of Rs.60.74 lakh as
additional income. A copy of the letter offering such additional
6 ITA No.924/PUN/2015 Shri Nandgopal Nanak Krishnani
income dated 04-03-2013 has been placed at page 41 of the paper
book. It has been mentioned therein that the assessee purchased
and used material at its work sites but movement of material was
misplaced. It further records that “As such we are submitting
entire purchases amounting to Rs.60,74,186/- during financial year
ended on 31-03-2010 (A.Y. 2010-11) as disallowance u/s.37(1) of
the Income-tax Act, 1961”. In view of the above categorical
admission by the assessee, there remains nothing which can be
done further in this regard. The Pune Benches of the Tribunal in
M/s. Chhabi Electricals Pvt. Ltd. and others Vs. DCIT vide its
order dated 28-04-2017 in ITA No.795/PUN/2014 and others, has
divided such cases of the beneficiaries of accommodation entries
into certain categories. One of the categories talks of 100%
addition of the amount of bogus purchases, whereas in other
category, it has been held that 10% over and above the normal GP
rate should be added. Since the assessee has himself offered 100%
of the amount of purchases for taxation during the course of
assessment proceedings, which is one of the categories in the case
of M/s. Chhabi Electricals Pvt. Ltd. (supra), we hold that no further
relief can be granted to the assessee in this regard.
7 ITA No.924/PUN/2015 Shri Nandgopal Nanak Krishnani
In the result, the appeal is dismissed.
Order pronounced in the Open Court on 07th March, 2019.
Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT
पुणे Pune; �दनांक Dated : 07th March, 2019 सतीश
आदेश आदेश क� आदेश आदेश क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: अ�ेिषत
अपीलाथ� / The Appellant; 1. ��यथ� / The Respondent; 2. 3. The CIT(A)-12, Pune 4. The CIT Central, Pune िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, पुणे 5. “बी” / DR ‘B’, ITAT, Pune; 6. गाड� फाईल / Guard file. / True copy // आदेशानुसार आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
ITA No.924/PUN/2015 Shri Nandgopal Nanak Krishnani
Date 1. Draft dictated on 06-03-2019 Sr.PS 2. Draft placed before author 06-03-2019 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *