JITENDRA HARSHADKUMAR TEXTILES P.LTD, MUMBAI v. ITO WD 4(2)(3), MUMBAI

ITA 2108/MUM/2012 | 2008-2009
Pronouncement Date: 17-10-2013 | Result: Allowed

Appeal Details

RSA Number 210819914 RSA 2012
Assessee PAN AABCJ9447J
Bench Mumbai
Appeal Number ITA 2108/MUM/2012
Duration Of Justice 1 year(s) 6 month(s) 18 day(s)
Appellant JITENDRA HARSHADKUMAR TEXTILES P.LTD, MUMBAI
Respondent ITO WD 4(2)(3), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 17-10-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted J
Tribunal Order Date 17-10-2013
Date Of Final Hearing 07-10-2013
Next Hearing Date 07-10-2013
Assessment Year 2008-2009
Appeal Filed On 30-03-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL J JJ J BENCH BENCH BENCH BENCH MUMBAI MUMBAI MUMBAI MUMBAI . . . ! ! ! ! ' ' ' ' #$ #$ #$ #$ BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI VIJAY PAL RAO JM VIJAY PAL RAO JM VIJAY PAL RAO JM VIJAY PAL RAO JM & & & & SHRI SHRI SHRI SHRI N. K. BILLAIYA N. K. BILLAIYA N. K. BILLAIYA N. K. BILLAIYA AM AM AM AM ./ I.T.A I.T.A I.T.A I.T.A. NO. . NO. . NO. . NO.2107/M/2012 2107/M/2012 2107/M/2012 2107/M/2012 ( % % % % & & & & / ASSESSMENT YEAR :2006-07) ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.2108/M/2012 2108/M/2012 2108/M/2012 2108/M/2012 ( % % % % & & & & / ASSESSMENT YEAR :2008-09) & ./ I.T.A. NO. I.T.A. NO. I.T.A. NO. I.T.A. NO.3564/M/2012 3564/M/2012 3564/M/2012 3564/M/2012 ( % % % % & & & & / ASSESSMENT YEAR :2009-10) M/S JITENDRA HARSHADKUMAR TEXTILES P. LTD. SHOP NO. 685 GROUND FLOOR GOVIND CHOWK M. J. MARKET MUMBAI-400002 / VS. THE INCOME TAX OFFICER WARD NO. 4(2)(3) AAYAKAR BHAVAN CHURCHGATE MUMBAI-400020 $' ' ./ ( ./ PAN/GIR NO. :AABCJ9447J ( ') / APPELLA APPELLA APPELLA APPELLANT NTNT NT) .. ( *+') / RESPONDENT RESPONDENT RESPONDENT RESPONDENT) ') ') ') ') / APPELLANT BY : SHRI BHUPENDRA SHAH *+') *+') *+') *+') - -- - /RESPONDENT BY : SHRI R. K. SAHU - -- - .' .' .' .' / DATE OF HEARING : 7 TH OCTOBER 2013 /0& /0& /0& /0& - -- -.' .' .' .' /DATE OF PRONOUNCEMENT: 17 TH OCTOBER 2013 #1 / O R D E R PER : . . / VIJAY PAL RAO JM THESE THREE APPEALS BY THE ASSESSEE ARE DIRECTED AG AINST THE RESPECTIVE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS) FOR THE ASSESSMENT YEARS 2006-07 2008-09 AND 2009-10. 2. THE ASSESSEE HAS RAISED COMMON GROUNDS IN THESE APPEALS EXCEPT THE AMOUNT OF ADDITION. THE GROUNDS RAISED F OR THE ASSESSMENT ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 2 YEAR 2006-07 ARE AS UNDER: 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE O F YOUR APPELLATE THE LD. CIT(A) ERRED IN CONFIRMING THE A DDITION OF ` 28 72 536/- MADE BY LD. A.O. AS UNEXPLAINED/UNPROV ED PURCHASE/INVESTMENTS IN PURCHASE AS PER SECTION 69 OF THE I.T. ACT 1961. 2. YOUR APPELLATE THEREFORE PRAYS THAT THE ADDITI ON OF ` 28 72 536/- SHOULD BE DELETED. 3. THE ASSESSEE FILED RETURN OF INCOME DECLARING TO TAL INCOME OF ` 16 180/- ON 29.11.2006. THE RETURN WAS PROCESSED U/ S 143(1) OF INCOME TAX ACT ACCEPTING THE RETURN OF INCOME. THE ASSESSMENT WAS REOPENED U/S 147 AFTER RECORDING THE REASONS FOR RE OPENING. THE MAIN REASON FOR REOPENING AS WELL AS THE ADDITION MADE B Y THE ASSESSING OFFICER IS THAT CERTAIN FACTS WERE DISCOVERED DURIN G THE SURVEY ACTION U/S 133A OF THE INCOME TAX ACT CONDUCTED ON 13.2.20 09 AND CONCLUDED ON 14.2.2009 IN CASE OF FOLLOWING CONCERNS: I) SHRI RAKESHKUMAR M. GUPTA PROP. OF M/S MANOJ MI LLS. II) SMT. HEMA R. GUPTA PROP. OF M/S SHREE RAM SALE S & SYNTHETICS. III) SHRI MOHIT R. GUPTA PROP. OF M/S ASTHA SILK I NDUSTRIES. AT THE TIME OF SURVEY ACTION THE SURVEY TEAM FOUND THAT THERE IS NO TRADING ACTIVITY (SALES/PURCHASES) CONDUCTED BY THE SE GROUP CONCERNS AND ALSO THERE WAS NO STOCK FOUND WITH THEM. STATEM ENT OF SHRI RAKESHKUMAR GUPTA WAS RECORDED DURING THE SURVEY U/ S 133A ON 13.2.2009 AND FURTHER U/S 131 ON 23.2.2009. THE SUR VEY TEAM FOUND ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 3 THAT THE GROUP CONCERNS OF RAKESHKUMAR GUPTA ARE EN GAGED IN THE ACTIVITY OF ISSUING ACCOMMODATION BILLS TO VARIOUS PARTIES IN MUMBAI AND OUTSIDE MUMBAI. IN THE STATEMENT RECORDED DURIN G THE COURSE OF SURVEY AS WELL AS POST SURVEY INQUIRY SHRI RAKESHKU MAR GUPTA STATED THAT IN ADDITION TO THE ABOVE MENTIONED THREE CONCE RNS TWO OTHER CONCERNS OF THE GROUP NAMELY M/S DEV VANI INDUSTRIE S AND M/S SAINATH TEXTILES WERE ALSO ENGAGED IN THE BUSINESS OF PROVI DING ACCOMMODATION ENTRIES. THUS ON THE BASIS OF THE MA TERIAL COLLECTED FROM THE SURVEY AS WELL AS ON THE BASIS OF THE STAT EMENT RECORDED FROM THE PROPRIETOR OF THE GROUP CONCERNS OF SHRI RAKESH KUMAR GUPTA AND HIS FAMILY MEMBERS THE AO WAS OF THE VIEW THAT THE ASSESSEE HAS OBTAINED ACCOMMODATION BILLS FROM VARIOUS CONCERNS OF SHRI RAKESHKUMAR GUPTA AND HIS FAMILY MEMBERS. IN ORDER TO VERIFY THE GENUINENESS OF THE PURCHASE THE AO ISSUED SUMMONS U /S 131 OF THE INCOME TAX ACT OF SHRI RAKESHKUMAR GUPTA. IN RESPON SE TO THE SUMMONS SHRI RAKESHKUMAR GUPTA SENT A LETTER DATED 3.12.2010 RECEIVED BY THE AO ON 9.12.2010 EXPRESSING HIS INAB ILITY TO ATTAIN THE PROCEEDING BEFORE THE AO IN VIEW OF THE VARIOUS MAT TERS PENDING BEFORE THE TAX AUTHORITIES. BY WAY OF THIS LETTER S HRI RAKESHKUMAR GUPTA RETRACTED THE STATEMENT RECORDED DURING THE C OURSE OF SURVEY ACTION. THE AO HELD THAT THE RETRACTION OF THE STAT EMENT IS NOT ACCEPTABLE AT THIS STAGE WHEN THE STATEMENT WAS MAD E VOLUNTARILY AND WAS NOT ALLEGED TO HAVE BEEN OBTAINED UNDER THREAT OR COERCION. ACCORDINGLY THE AO HELD THAT THE ASSESSEE HAS OBTA INED THE ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 4 ACCOMMODATION BILLS FOR THE RESPECTIVE AMOUNTS FROM THE FAMILY GROUP CONCERNS OF SHRI RAKESHKUMAR GUPTA TO INFLATE/ACCOM MODATE HIS PURCHASES. THE AO MADE THE ADDITION FOR THE ENTIRE AMOUNT OF PURCHASES SHOWN FROM THE GROUP CONCERNS OF SHRI RAK ESHKUMAR GUPTA. ON APPEAL THE CIT(A) HAS CONFIRMED THE ACTION OF T HE AO BY RECORDING THE REASON THAT THE ASSESSEE HAS FILED TO DISCHARGE HIS ONUS AND PROVING THAT PURCHASE FROM THE GROUP CONCERNS OF SH RI RAKESHKUMAR GUPTA WERE GENUINE. 4. BEFORE US THE LD. AR OF THE ASSESSEE HAS SUBMITT ED THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 VIDE ORDER DATED 21.11.2012. THE LD. AR OF THE ASSESSEE HAS SUBMITTE D THAT THE ASSESSEES HAS EXPLAINED ALL THE DETAILS AND FILE TH E RELEVANT RECORD TO PROVE THAT THE PURCHASES MADE FROM THE GROUP CONCER NS OF SHRI RAKESHKUMAR GUPTA ARE GENUINE. THE LD. AR HAS REFER RED THE VARIOUS PURCHASE BILLS AND DETAILS OF PURCHASE AND SALES IT EM WISE. THE LD. AR HAS FURTHER SUBMITTED THAT THE PAYMENTS WERE MADE T HROUGH CHEQUES AND THE AO HAS NOT BROUGHT ON RECORD ANY MATERIAL T O SHOW THAT THE PAYMENT MADE BY THE ASSESSEE HAS BEEN RECEIVED BACK BY THE ASSESSEE FROM THE SUPPLIER WITHOUT ANY ACTUAL PURCH ASE. THE LD. AR HAS CONTENDED THAT WHEN THE STATEMENT MADE DURING T HE SURVEY ACTION HAS BEEN RETRACTED BY THE SUPPLIER THEN THE SAME CA NNOT BE USED ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 5 AGAINST THE ASSESSEE FOR MAKING THIS ADDITION. HE H AS ALSO REFERRED THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2007-08 WHE REIN ONLY G.P. ADDITION WAS MADE AGAINST WHICH THE ASSESSEE AS WEL L AS REVENUE FILED THE CROSS APPEALS AND THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LD. AR HAS POINTED OUT THAT WHEN THE CIT(A) HAS TREATED THE PURCHASES AS GENUINE FOR THE ASSESSMENT YEAR 2007-08 AND MADE ONLY G.P. ADDITION THEN THE SIMILAR PURCHASES CANNOT BE TREATED AS BOGUS FOR THE YEARS UNDER CONSIDERATION. HE HAS REFERRED THE AFFIDAVIT FILED BY SHRI RAKESHKUMAR GUPTA WHEREBY T HE STATEMENT MADE DURING THE SURVEY HAS BEEN RETRACTED AND IT HA S BEEN AFFIRMED THAT THE TRANSACTIONS OF SALE TO THE ASSESSEE ARE G ENUINE AND AGAINST THE PAYMENT THROUGH CHEQUES. THE LD. AR HAS REFERRE D THE PURCHASE BILLS AND OTHER DETIALS FROM PAGE NO. 62 TO 115 OF THE PAPER BOOK AND SUBMITTED THAT THE ASSESSEE HAS DISCHARGED ITS ONUS TO PROVE THE GENUINENESS OF PURCHASES. THE ASSESSING OFFICER HAS NOT BROUGHT ON RECORD ANY MATERIAL EXCEPT RELYING ON THE STATEMENT MADE BY SHRI RAKESHKUMAR GUPTA DURING THE COURSE OF SURVEY ACTIO N TO PROVE THAT THE PURCHASES ARE BOGUS. 5. ON THE OTHER HAND THE LD. DR HAS SUBMITTED THAT THIS IS NOT A CASE OF STATEMENT RECORDED DURING THE COURSE OF SUR VEY ACTION BUT SHRI RAKESHKUMAR GUPTA HAS CONFIRMED THE STATEMENT MADE DURING THE SURVEY IN HIS STATEMENT MADE U/S 131 OF THE INCOME TAX ACT ON 23.2.2009 DURING THE POST SURVEY INQUIRY. HE HAS RE FERRED THE ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 6 STATEMENT RECORDED U/S 131 AS REPRODUCED BY THE AO IN PARA 6.9 OF THE ASSESSMENT ORDER AND SUBMITTED THAT WHEN SHRI RAKES HKUMAR GUPTA HAS CATEGORICALLY STATED THAT THE GROUP CONCERNS OW N BY HIM AS WELL AS BY HIS ANY FAMILY MEMBERS WERE ENGAGED EXCLUSIVELY IN THE ACTIVITY OF ISSUING ACCOMMODATION BILLS FOR LAST 9 YEARS AND FU RTHER AS IT WAS FOUND DURING THE SURVEY ACTION THAT THERE WAS NO PURCHASE OF MATERIAL THEN RETRACTION OF THE SAID STATEMENT AFTER A CONSIDERAB LE GAP CANNOT BE ACCEPTED. HE HAS FURTHER SUBMITTED THAT THE STATEME NT RECORDED DURING THE COURSE OF SURVEY PROCEEDING AS WELL AS U/S 131 OF THE INCOME TAX ACT WERE DULY SUPPORTED BY THE EVIDENCE FOUND DURIN G THE SURVEY. THE ASSESSING OFFICER HAS RELIED UPON THE DECISION OF B ANGALORE BENCHES OF THIS TRIBUNAL IN CASE OF CARPENTERS CLASSICS (EXIM) (P) LTD. VS DCIT 108 ITD 142 AS WELL AS THE DECISION OF THIS TRIBUNAL IN CASE OF PRANAV CONSTRUCTION CO. VS ACIT 61 TTJ 145. THE AO HAS REC ORDED THAT THERE IS NO ALLEGATION THAT THE STATEMENT RECORDED DURING TH E SURVEY AND POST SURVEY INQUIRIES ARE UNDER COERCION OR THREAT AND T HEREFORE WHEN THE STATEMENTS WERE GIVEN VOLUNTARILY BY SHRI RAKESHKUM AR GUPTA THEN THE RETRACTION IS AFTER THOUGH AND WITHOUT ANY BASIS. I N THE POST SURVEY INQUIRIES IT WAS FOUND THAT SHRI RAKESHKUMAR GUPTA AND HIS GROUP CONCERNS HAD OPERATED SO MANY BANK ACCOUNTS IN DIFF ERENT FICTITIOUS PROPRIETOR CONCERNS WHICH WERE NOT DISCLOSED TO THE DEPARTMENT. THE MODUS OPERANDI OF ISSUING ACCOMMODATION BILL AGAINS T THE CHEQUES HAS ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 7 BEEN CLEARLY EXPLAINED BY SHRI RAKESHKUMAR GUPTA IN HIS STATEMENT. THE CHEQUES WERE DEPOSITED IN THE VARIOUS BANK ACCO UNTS AND THE AMOUNT WAS IMMEDIATELY WITHDRAWN AND AFTER DEDUCTIO N OF COMMISSION OF 1% FROM THE AMOUNT OF ACCOMMODATION SALE BILL T HE BALANCE AMOUNT WAS REFUND TO THE PARTIES. THUS THE LD. DR HAS SUBMITTED THAT THERE IS NO ACTUAL PURCHASE OR SALE OF THE MATERIAL BUT THE ASSESSEE HAS BEEN OBTAINING ACCOMMODATION BILLS TO INFLATE THE P URCHASES AND AVOID THE TAX LIABILITY. HE HAS RELIED UPON THE FOLLOWING DECISIONS: RAMJAS NAWAL VS CIT 131 TAXMAN 525 (RAJ.) ITO VS DEVJI PREMJI PUJARA & SONS 34 TAXMN.COM 96(M UM) D. D. KOCHHAR & SONS VS ITO 25 ITD 317 (DEL) AND SUBMITTED THAT THE RETRACTION IS NOT VALID IN T HIS CASE AND THE AO HAS PROVED THAT THE PURCHASES IN QUESTION ARE BOGUS . IN REBUTTAL THE LD. AR HAS SUBMITTED THAT THE ASSESSEE HAS PROVED T HE ITEM WISE PURCHASES AND SALE BY PRODUCING THE RELEVANT RECORD THEREFORE THE ASSESSEE HAS DISCHARGED ITS ONUS. HE HAS RELIED UPO N THE DECISION OF THIS TRIBUNAL IN CASE OF FREE INDIA ASSURANCE SERVI CES LTD. VS DCIT 132 ITD 60. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT A SURV EY ACTION WAS TAKEN IN THE CASES OF SHRI RAKESHKUMAR GUPTA AND THE OTHE R CONCERNS OF HIS FAMILY MEMBERS. STATEMENT OF SHRI RAKESHKUMAR GUPTA WAS RECORDED DURING THE SURVEY ACTION U/S 133A ON 13/14.2.2009. THE ASSESSING ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 8 OFFICER HAS REPRODUCED THE RELEVANT PART OF THE STA TEMENT OF SHRI RAKESHKUMAR GUPTA RECORDED DURING THE SURVEY U/S 13 3A AT PAGE 9 AND 10 AS UNDER: QUESTION NO. 9. PLEASE GIVE THE DE ROTE ON BUSINES S ACTIVITY AND MODUS OPERANDI OF THE BUSINESS. ANS: AS PER THE REQUEST OF THE VARIOUS PARTIES FROM THE MARKET WHO REQUIRES THE BILLS OF SALES I PROVIDE THE BILL S TO THEM. I RECEIVE THE CHEQUE PAYMENTS AGAINST THE SAID BILLS WHICH WILL BE DEPOSITED INTO THE BANK AND THEN WITHDRAW THE PA YMENT BY CASH AND RETURN BACK THE AMOUNT TO THE PARTY AFTER DEDUCTING MY COMMISSION. IN OTHER WORDS MY ACTIVITY IS PROVIDING THE ACCOMMODATION BILLS TO THE VARIOUS PARTIES. ACTUALL Y THERE IS NO PURCHASE AND SALE OF THE GOODS WHATSOEVER. FURTH ER I CONFIRM THAT THERE IS NO STOCK AT ALL. QUS. NO.11 WHEN YOU ARE PROVIDING THE ACCOMMODATION BILLS TO THE VARIOUS PARTIES IN THE MARKET HOW DO YOU SH OW THE SALES PURCHASES OPENING STOCK AND CLOSING STOCK I N YOUR RETURN OF INCOME. SIMILARLY YOU ARE ALSO SHOWING T HE OUTSTANDING SUNDRY CREDITORS AND OUTSTANDING SUNDRY DEBTORS IN THE BALANCE SHEET FILED WITH INCOME TAX DEPARTME NT. PLEASE EXPLAIN. ANS: AS I AGREED AND EXPLAINED TO YOU THAT I AM DO ING THE ACTIVITY OF ISSUING THE ACCOMMODATION BILLS TO THE VARIOUS PARTIES. THEREFORE WHATEVER THE SUNDRY CREDITORS SH OWN IN THE BALANCE SHEET ARE THE BOGUS SUNDRY CREDITORS. I AM DOING THIS TYPE OF BOGUS ACTIVITY FROM THE YEAR 2000 ONWARDS. SINCE I ISSUED THE SALES BILLS TO THE VARIOUS PARTIES / AM ENTITLED TO RECEIVE THE PAYMENTS FROM THE SUNDRY DEBTORS IN ORD ER H COMPLETE SUCH TRANSACTIONS FROM WHOM THE PAYMENTS A RE YET TO BE RECEIVED. QUE.NO.12 WHETHER SIMILAR TYPE OF (ACCOMMODATION EN TRY) MODUS OPERANDI/BUSINESS ACTIVITY ARE CARRIED OUT BY OTHER CONCERNS? ANS: I CONFIRM THAT SIMILAR ACCOMMODATION ENTRIES A L-C MADE IN THE FOLLOWING CONCERNS THE DETAILS ARE AS UNDER: (I) M/S SHREE RAM SALES & SYNTHETICS PROP. HEMA R. GUPTA FROM THE YEAR 2000 ONWARDS ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 9 (II) M/S ASTHA SILK INDUSTRIES PROP. SHRI MOHIT R GUPTA FROM THE YEAR 2000 ONWARDS (III) M/S DEV-VANI INDUSTRIES PROP. NILESH R GUPTA FROM THE MIDDLE OF THE YEAR 2007ONWARDS (IV) M/S SAINATH TEXTILES PROP. RAKESHKUMAR MADANLAL GUPTA HUF FROM THE MIDDLE OF THE YEAR 2007 ONWARDS. QUESTION NO.16. PLEASE GIVE THE DETAILS OF THE SALE BILLS ISSUED? ANS: THE SALES BILLS ARE ISSUED BY THE CONCERNS SUC H AS (1) M/S. MANOJ MILLS (2) M/S. SHREE RAM SALES & SYNTHETICS ( 3) M/S. SAINATH TEXTILES (4) M/S. DEV VANI/INDUSTRIES AND ( 5) M/S. ASTHA SILK INDUSTRIES - IN THE NAME OF VARIOUS PARTIES FO R WHOM SALE BILLS REQUIRED. QUESTION NO. 17. WHAT ALA THE PURCHASE BILLS PRINTE D AND USED TO SHOW AS PURCHASES? ANS: THE PURCHASE BILLS ARE USED MAINLY IN THE NAME S SHOWN AS PURCHASE PARTIES WHICH ARE AS UNDER:- (1) M/S. N. M. CORPORATION (2) M/S. PAYAL INDUSTRIES (3) M/S. DEEP ENTERPRISES (4) M/S. RICH FABRICS (5) M/S. KAJOL IMPEX (6) M/S. ASH ENTERPRISES (7) M/S. SHIV TEXTILES (8) M/S. PANCHAM TEX (9) M/S. OM CREATIONS (10) M/S. ROYAL FABRICS (II) M/S . M. M. CREATIONS (12) M/S. SHUBHAM TEX AND OTHERS. QUESTION NO. 18 IT IS FOUND FROM THE OFFICE PREMISE S THAT THERE ARE BLANK BILL BOOKS OF AROUND 16 PARTIES CONSISTI NG OF SIX BOOKS EACH? PLEASE EXPLAIN ME THE USE OF THESE BLAN K BILL BOOKS? ANS: THE BLANK BILL BOOKS ARE USED TO RECORD THE PU RCHASES MADE FROM THESE PARTIES AS NARRATED IN THE Q.NO. 17 ABOVE AND USED TO RECORD AS A SALES TO VARIOUS PARTIES AS NARRATED IN THE Q.NO. 16 ABOVE. QUESTION NO.27. GIVE THE DETAILS OF THE NON EXISTIN G SUNDRY CREDITORS AND ALSO NAMES & ADDRESS OF SUNDRY CREDIT ORS WITH THEIR PAN NOS AND AMOUNTS OUTSTANDING AGAINST THEM IN ALL CONCERNS? ANS: THE LIST OF ALL THE NON EXISTING AND BOGUS SUN DRY CREDITORS AND THE LIST OF SUNDRY DEBTORS ARE AS PER THE LIST OF SALES AND PURCHASE AS PER ANNEXURE B & C. I DO NOT HAVE ANY P AN NOS. OF THE PARTIES. ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 10 QUESTION NO.34 SIMILAR STYLE OF ABOVE BLANK LETTER HEAD PRINT OUTS ARE TAKEN FROM YOUR COMPUTER OF (1) DEVANG IND USTRIES (2) D KINGS (3) MOHAMAD HAJI ADAM & CO. (4) SYED BA WKHER & CO. (5) GALA ASSOCIATES. PLEASE EXPLAIN YOUR RELATI ONSHIP WITH THESE PARTIES AND WHY ALL THESE LETTER HEADS KEPT B Y YOU IN YOUR COMPUTER? ANS: YES THEY ARE PREPARED AND SIGNED BY ME AS MEN TIONED ABOVE. 7. AS IT IS CLEAR FROM THE STATEMENT RECORDED DURIN G THE SURVEY THAT SHRI RAKESHKUMAR GUPTA HAS CATEGORICALLY STATED THA T AS PER THE REQUEST OF THE VARIOUS PARTIES FROM THE MARKET ACCO MMODATION BILLS WERE GIVEN AGAINST THE CHEQUE PAYMENT. THE CASH WAS WITHDRAWN FROM THE BANK AND RETURN BACK THE AMOUNT TO THE PARTY AF TER DEDUCTING THE COMMISSION. THUS THERE IS NO AMBIGUITY IN THE STAT EMENT OF SHRI RAKESHKUMAR GUPTA WHICH HAS CLEARLY EXPLAINED THE M ODUS OPERANDI OF PROVIDING ACCOMMODATION PURCHASE BILLS TO THE PARTI ES WITHOUT ACTUAL SALE AND PURCHASE OF GOODS. THERE WAS NO STOCK AT A LL FOUND WITH THE CONCERNS OF SHRI RAKESHKUMAR GUPTA AND HIS FAMILY M EMBERS. IT IS ALSO NOT DISPUTED THAT THE PURCHASES IN QUESTION FOR ALL THESE YEARS ARE FROM THE CONCERNS OF SHRI RAKESHKUMAR GUPTA AND HIS FAMI LY MEMBERS THROUGH WHICH THE ACCOMMODATION BILLS WERE BEING PR OVIDED. IT IS NOT A CASE OF MERE RECORDING OF STATEMENT DURING THE COUR SE OF SURVEY BUT STATEMENT OF SHRI RAKESHKUMAR GUPTA WAS ALSO RECORD ED DURING THE POST SURVEY INQUIRY U/S 131 ON 23.2.2009. THE RELEV ANT PART OF THE SAID ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 11 STATEMENT RECORDED U/S 131 WAS REPRODUCED BY THE AO AT PAGE NO. 11 AND 12 AS UNDER: (2) WHAT IS YOUR BUSINESS AND EXPLAIN TO ME IN DET AIL THE MODUS OPERANDI OF YOUR BUSINESS? ANS: WE ARE DOING THE ACTIVITY OF ISSUING THE ACCOM MODATION BILLS TO THE VARIOUS PARTIES. I AM DOING THIS TYPE OF ACTIVITY FROM THE YEAR 2000 ONWARDS. AS PER THE REQUEST OF THE VA RIOUS PARTIES FROM THE MARKET WHO REQUIRES THE BILLS OF PURCHASES (IT WILL BE SALES FROM MY SIDE I PROVIDE THE SAME TO T HEM. 1 RECEIVE THE CHEQUE PAYMENTS AGAINST THE SAID BILLS WHICH WILL BE DEPOSITED INTO THE BANK AND THEN WITHDRAW THE PA YMENT BY CASH FROM THE OTHER BANK A/C. AND RETURN BACK THE A MOUNT TO THE PARTY AFTER DEDUCTING MY COMMISSION. IN OTHER W ORDS MY ACTIVITY IS PROVIDING THE ACCOMMODATION BILLS TO TH E VARIOUS PARTIES. ACTUALLY THERE IS NO PURCHASE AND SALE OF THE GOODS WHATSOEVER. HENCE I DO NOT KEEP MORE STOCK IN MY C USTODY. HOWEVER I KEEP A NOMINAL QUANTITY OF STOCK IN THE SHOP PREMISES IN ORDER TO SHOW THAT THE BUSINESS IS OF TRADING IN TEXTILES. I AM RUNNING 5 PROPRIETORY CONCERNS IN THE NAME OF MYSELF WIFE & MY CHILDREN. OUT OF THESE 3 ARE OLD AND MAI N CONCERNS WHICH DEAL IN ISSUING ACCOMMODATION BILLS. THESE AR E (I) M/S. MANOJ MILLS (II) M/S. ASTHA SILK INDS. & (III) M/S. SHREE RAM SALES & SYNTHETICS. THOUGH SOME OF THESE CONCERNS A RE IN THE NAME OF MY WIFE AND CHILDREN I AM RUNNING THE BUSI NESS. MY WIFE IS A HOUSEWIFE AND CHILDREN ARE IN THE EMPLOYM ENT. (4) THAT MEANS YOU AND YOUR FAMILY CONCERNS DID NO T HAVE ANY TRADING ACTIVITIES FROM THE YEAR 2000 ONWARDS ? EXPLAIN? ANS: WE DID NOT HAVE ANY TRADING ACTIVITIES FROM THE YEAR 2000 ONWARDS. WE WERE ENGAGED EXCLUSIVELY IN THE AC TIVITIES OF ISSUING F ACCOMMODATION BILLS FOR THE PAST 9 YEA RS. IN ALL THE ABOVE FAMILY CONCERNS AND EARNING COMMISSION ON THE SAME. (6) WHAT ARE THE TOTAL AMOUNT OF ACCOMMODATION BILL S YOU HAVE GIVEN RIGHT FROM THE YEAR 2000-2001 ONWARDS. G IVE COMPLETE BREAK UP SUCH AS THE NAME OF THE PARTY WI TH COMPLETE ADDRESS FINANCIAL YEAR AMOUNT INVOLVED E TC. ANS: IN THE MAIN THREE CONCERNS I.E. M/S. MANOJ MIL LS (II) M/S. ASTHA SILK ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 12 INDUSTRIES & (III) M/S. SHREE RAM SALES & SYNTHETIC S ON AN AVERAGE ACCOMMODATION BILLS AMOUNTING TO RS. 5 TO 7 CRORES IN EACH CONCERN IN A YEAR WAS ISSUED TO VARIOUS PAR TIES. HENCE IN THE PAST 9 YEARS THE APPROXIMATE TOTAL TURNOVER (ACCOMMODATION BILLS ISSUED) WOULD COME TO RS. 150 CRORES. AS REGARDS THE OTHER TWO CONCERNS I.E. M/S. SAINATH TEXTILES AND M/S. DEV-VANI INDUSTRIES THESE CONCERNS WERE S TARTED FROM THE YEAR 2006 AND THESE TWO CONCERNS ARE ALSO ENGAGED IN THE ACTIVITIES OF ISSUING ACCOMMODATION BILLS ON LY AND THERE IS NO TRADING ACTIVITY. I SHALL PROVIDE THE LIST OF THE PERSONS TO WHOM BIL LS WERE ISSUED ALONG WITH THE BILL AMOUNT WITH YEAR-WISE BREAK UP IN 10 DAYS TIME. (8) FOR DIFFERENT ITEMS OF GOODS/MATERIALS HOW DO YOU ISSUE BILLS WHETHER THE DESCRIPTION OF THE GOODS ARE GIV EN BY THE PARTIES CONCERNED? ANS: YES AS PER THEIR REQUIREMENT OF MATERIAL QUA NTITY AND AMOUNT THE BILLS ARE ISSUED. (10) WHEN YOU ARE ISSUING SALES BILLS TO THE PARTIE S HOW DO YOU CO-RELATE THE PURCHASES? ANS: BLANK BILL BOOKS IN THE NAMES OF DIFFERENT PUR CHASE PARTIES WILL GET PRINTED FROM THE MARKET AND THE PU RCHASE BILLS WILL BE PREPARED BY OURSELVES AS PER THE REQUIREMEN T. (19). ARE YOU AWARE THAT THE BUSINESS ACTIVITIES CA RRIED OUT BY YOU I.E. ISSUING ACCOMMODATION BILLS OR DOING HAWAL A BUSINESS IS NOT A PERMITTED ONE AND IT IS CRIMINAL OFFENCE Y OU ARE COMMITTING. DO YOU KNOW THE CONSEQUENCES OF THESE ACTIVITIES ONCE CAUGHT? ANS: I KNOW THIS ACTIVITY IS NOT A PERMITTED ONE. H OWEVER 1 DO NOT KNOW THE CONSEQUENCES OF THIS ONCE CAUGHT. MY JUSTIFICATION IS THAT I AM DOING THIS BUSINESS JUST TO EARN SOME COMMISSION. IN THAT CASE THE PARTIES THOSE WHO HAV E TAKEN THE ADVANTAGE OF THESE ACCOMMODATION BILLS ARE TO B E PUNISHED. (20) DO YOU WANT TO SAY ANYTHING MORE? ANS; NO THE STATEMENTS GIVEN ABOVE BY ME ARE TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. THE ABOVE STATEMENTS RECORDED FROM ME WITHOUT ANY COMPULSION COERCION OR THREAT AND THE SAME IS GIVEN VOLUNTARIL Y IN A SOUND STATE OF MIND. THE ABOVE STATEMENTS HAVE BEEN READ OUT AND EXPLAINED TO ME IN HINDI. ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 13 8. IT IS MANIFEST FROM THE STATEMENT RECORDED U/S 1 31 THAT SHRI RAKESHKUMAR GUPTA HAS CONFIRMED AND AFFIRMED HIS EA RLIER STATEMENT. IN THE ANSWER TO QUESTION NO. 4 IT IS CATEGORICALLY STATED THAT THERE WAS NO TRADING ACTIVITY FROM THE YEAR 2000 ONWARDS. FUR THER IT WAS STATED THAT THEY WERE ENGAGED EXCLUSIVELY IN THE ACTIVITIE S OF ISSUING ACCOMMODATION BILLS FOR PAST 9 YEARS AND EARNING CO MMISSION INCOME ON THE SAME. THOUGH THE ASSESSEE HAS PLACED RELIANC E ON THE AFFIDAVITS FILED BY SHRI RAKESHKUMAR GUPTA AND OTHER FAMILY ME MBERS WHEREIN IT HAS BEEN STATED THAT THE TRANSACTIONS WITH THE ASSE SSEE ARE GENUINE HOWEVER IT IS PERTINENT TO NOTE THAT IN THESE AFFI DAVIT THERE IS NOTHING TO SHOW THAT THE STATEMENTS RECORDED DURING THE SUR VEY ACTION AS WELL AS STATEMENT RECORDED DURING THE POST SURVEY INQUIR Y US/ 131 OF THE INCOME TAX ACT WERE GIVEN UNDER ANY COERCION DURESS OR PRESSURE. THEREFORE THESE AFFIDAVITS CANNOT BE ACCEPTED AS R ETRACTION OF THE EARLIER STATEMENTS AND PARTICULARLY THE STATEMENT G IVEN U/S 131 WHEREIN A CATEGORICAL FACT WAS STATED THAT SINCE TH E YEAR 2000 THERE IS NO ACTUAL TRADING BY ALL THESE CONCERNS OF SHRI RAK ESHKUMAR GUPTA AND HIS FAMILY MEMBERS AND THEY WERE ENGAGED EXCLUSIVEL Y IN THE ACTIVITY OF ISSUING ACCOMMODATION BILLS FOR PAST 9 YEARS. IN VIEW OF THE SAID CATEGORICAL STATEMENT THE AFFIDAVITS FILED IN SUPPO RT OF THE ASSESSEES CLAIM APPEARS TO BE AFTER THOUGHT AND SELF SERVING DOCUMENTS. IT IS SELF- CONTRARY STAND ON THE PART OF SHRI RAKESHKUMAR GUPT A AND OTHER FAMILY MEMBERS WHEN THEY STATED IN THE EARLIER STATEMENTS THAT THERE WAS NO ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 14 STOCK AND THERE WAS NO ACTUAL TRADING ACTIVITY REGA RDING PURCHASE OR SALE AND THEY WERE ENGAGED EXCLUSIVELY IN THE ACTIV ITY OF PROVIDING ACCOMMODATION BILLS THEN HOW COME THE ALLEGED PURCH ASE AND SALE TRANSACTIONS WITH THE ASSESSEE ARE CLAIMED TO BE GE NUINE. THEREFORE THE AO HAS MORE THAN ENOUGH MATERIAL AND REASON TO SUSPECT THE ALLEGED PURCHASE BY THE ASSESSEE FROM SHRI RAKESHKU MAR GUPTA AND HIS FAMILY MEMBERS CONCERNS. THERE IS NO QUARREL ON THE POINT THAT NO ADDITION CAN BE MADE MERELY ON THE BASIS OF STATEME NT OF THIRD PARTY WITHOUT SUPPORTING EVIDENCE BUT ONCE THE AO HAS BRO UGHT ON RECORD THE STATEMENT RECORDED DURING THE SURVEY AS WELL AS U/S 131 ALONG WITH THE CRUCIAL FACTS DISCOVERED DURING THE SURVEY ACTI ON AND POST SURVEY INQUIRY REGARDING NON-EXISTENCE OF ANY STOCK AND NO ACTUAL TRADING OF SALE AND PURCHASE WAS CARRIED OUT THEN THE BURDEN I S SHIFTED TO THE ASSESSEE TO DISPEL THE STRONG SUSPICION OF THE AO B ASED ON SUCH RECORD. IN DISCHARGE OF HIS BURDEN THE ASSESSEE WAS REQUIRE D TO PRODUCE THE RELEVANT RECORD AND DETAILS TO PROVE THAT THE TRANS ACTIONS ARE GENUINE. THE ASSESSING OFFICER HAS RECORDED IN PARA 6.5 THAT THE ASSESSEE DID NOT COMPLY THE LETTER DATED 22.11.2010 WHEREBY THE ASSESSEE WAS ASKED TO FURNISH THE EXPLANATION ON OR BEFORE 26.11 .2010. THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE ASSESSMENT Y EAR 2007-08 IN ASSESSEES OWN CASE AS HELD IN PARA 8 TO 8.1 AS UND ER: 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT WILL BE RELE VANT TO REPRODUCE THE LETTER RECEIVED BY THE AO FROM SHRI ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 15 RAKESHKUMAR GUPTA WHICH IS ALSO REPRODUCED IN THE ASSESSMENT ORDER: I AM IN RECEIPT OF YOUR SUMMONS U/S. 131 OF THE I.T . ACT 1961 IN THE CASE OF M/S. JITENDRA HARSHAD KUMAR TEX TILE PVT. LTD. ASKING ME TO ATTEND BEFORE YOUR GOODSELF WITH THE DETAILS OF MY ACCOUNT WITH THE SAID M/S. JITEND RA HARSHAD KUMAR TEXTILE PVT. LTD. FOR AY.2002-03 & 20 07- 08. AS YOU ARE AWARE THAT MY ASSESSING OFFICER HAD RECO RDED ALLEGED STATEMENT U/S. 133A AND 131 OF THE I.T. ACT 1961 I HAVE BEEN RECEIVING WITNESS SUMMONS FROM ALL FOUR CORNERS OF THE CITY ON THE GROUND THAT I HAVE GIVEN ACCOMMODATION BILL THOUGH I HAVE DENIED THE CONTEN T OF THE STATEMENTS RECORDED BY A.O. U/S. 133A & 131 VID E MY LETTER DATED 27.4.2009 AND MY AFFIDAVIT DATED 20.2.2009 SUBMITTED TO WARD 14(3)(2). IT IS PHYSICA LLY IMPOSSIBLE FOR ME TO ATTEND BEFORE VARIOUS INCOME T AX AUTHORITIES AS I AM NOT FEELING WELL IT WILL NOT POSSIBLE FOR ME TO ATTEND BEFORE YOUR GOODSELF IN RESPONSE T O YOUR ABOVE MENTIONED SUMMONS. AS REGARDS M/S. JITENDRA HARSHAD KUMAR TEXTILES PVT . LTD. IS CONCERNED. I HAVE ALREADY GIVEN MY AFFIDAVIT WHE REIN I HAVE SPECIFICALLY STATED THAT I HAVE SOLD THE GOODS TO M/S. JITENDRA HARSHAD KUMAR TEXTILES P. LTD. AND TH E CONSIDERATION IS RECEIVED TO ME BY CROSS ORDER CHEQ UE. COPY OF THE SAID LEDGER ACCOUNT IS ALREADY SUBMITTE D THE DEPARTMENT. 8.1 FROM THE ABOVE LETTER IT IS CLEAR THAT THE SAME WAS WRITTEN IN RESPONSE TO NOTICE ISSUED BY THE AO. NOT ONLY SH RI RAKESH KUMAR GUPTA HAS STATED THAT HE HAS RETRACTED FROM T HE STATEMENT RECORDED DURING THE SURVEY BUT ALSO FILED AN AFFIDAVIT DATED 20/2/2009 AND LETTER DATED 27/4/200 9 TO DENY THE STATEMENT MADE DURING THE SURVEY UNDER SECTION 133A. HE HAS FURTHER CONFIRMED THAT THE SALES MADE BY THE AS SESSEE WERE EFFECTED AND THE CONSIDERATION WAS RECEIVED BY CROSS ORDER CHEQUES. THUS IT IS CLEAR THAT THERE IS NO MA TERIAL ON RECORD TO SAY THAT THE PURCHASES MADE BY THE ASSESS EE FROM THE SAID CONCERN WERE BOGUS EXCEPT THE GENERAL STAT EMENT RECORDED BY THE DEPARTMENT IN THE CASE OF SHRI RAKE SH KUMAR GUPTA. WHICH WAS LATER ON RETRACTED. IN ABSENCE OF ANY MATERIAL BROUGHT ON RECORD AGAINST THE SUBMISSIONS MADE BY SHRI RAKESH KUMAR GUPTA IN HIS LETTER DATED 20/12/2 009 FILED BEFORE THE AO OF THE ASSESSEE THE ADDITION IF ANY MADE IN THE CASE OF THE ASSESSEE WILL BE BASED ON PRESUMPTION O NLY AND IT ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 16 CANNOT BE SUSTAINED IN THE EYES OF LAW. AS AGAINST THAT ASSESSEE HAS SUBMITTED VARIOUS EVIDENCES TO SHOW TH AT THE ACTUAL DELIVERY OF THE GOODS WAS RECEIVED BY THE AS SESSEE FROM THE SAID PARTY WHICH HAS NOT BEEN DISCARDED BY THE AO. THE ADDITION SUSTAINED BY LD. CIT(A) IS ALSO ON PRE SUMPTION BASIS. THEREFORE KEEPING IN VIEW THE FACTS AND CIR CUMSTANCES OF THE CASE WE ARE OF THE OPINION THAT ADDITIONS M ADE BY THE AO DESERVE TO BE DELETED IN ITS ENTIRETY. WE DECIDE ACCORDINGLY. 9. AS WE HAVE ALREADY OBSERVED THAT THE ADDITION CA NNOT BE MADE SOLELY ON THE BASIS OF THE STATEMENT OF THE THIRD P ART BUT SINCE THE RELEVANT RECORD HAS RELIED UPON THE ASSESSEE BEFORE US HAS NOT BEEN EXAMINED AND PARTICULARLY THE ALLEGED BILLS THROUGH WHICH THE ASSESSEE HAS CLAIMED TO HAVE PURCHASED THE MATERIAL. IT IS P ERTINENT TO NOTE THAT FOR ALL THESE 3 YEARS THE ASSESSEE HAS NOT SHOWN AN Y OPENING STOCK OR CLOSING STOCK WHICH FURTHER SUPPORTS THE VIEW OF TH E ASSESSING OFFICER THAT THERE WAS NO PHYSICAL PURCHASE AND SALE OF THE GOODS IN QUESTION. SINCE THE RELEVANT MATERIAL HAS NOT BEEN EXAMINED BY THE AUTHORITIES BELOW THEREFORE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE WE SET ASIDE THE MATTER TO THE RECORD OF THE ASSESSING OFFICER FOR ALL 3 YEARS FOR CONSIDERATION AND DECIDING THE SAME DENOVO AFTER EXAMINATION AND VERIFICATION OF T HE RECORD FILED BY THE ASSESSEE. WHILE DECIDING THE ISSUE ON MERITS ON E OF THE RELEVANT AND MATERIAL ASPECTS IS THE PHYSICAL DELIVERY OF TH E GOODS. SINCE THE ASSESSEE HAS RELIED UPON THE AFFIDAVITS FILED BY SH RI RAKESHKUMAR GUPTA AND OTHER FAMILY MEMBERS THEREFORE TO PROVE THE GENUINENESS ITA NO.2107 2108 & 3564/M/2012 JITENDRA HARSHADKUMR TEXTILES P. LTD. 17 OF THE PURCHASE AND SALE THE SUPPORTING MATERIAL HA S TO BE PRODUCED TO SHOW THAT THE TRANSACTIONS IN QUESTION ARE BACKED B Y ACTUAL DELIVERY. ACCORDINGLY THE AO IS DIRECTED TO DECIDE THE ISSUE IN THE LIGHT OF THE ABOVE OBSERVATION. 10. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 17 TH DAY OF OCTOBER 2013 SD/- SD/- ( . . ! ) ' #$ (N. K. BILLAIYA) ACCOUNTANT MEMBER ( ) % #$ (VIJAY PAL RAO) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 17 TH OCTOBER 2013 SUBODH COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI