HAJARAM P. PUROHIT, MUMBAI v. ASST CIT CEN CIR 36, MUMBAI

ITA 2409/MUM/2013 | 2009-2010
Pronouncement Date: 13-11-2014 | Result: Dismissed

Appeal Details

RSA Number 240919914 RSA 2013
Assessee PAN AGUPP6813E
Bench Mumbai
Appeal Number ITA 2409/MUM/2013
Duration Of Justice 1 year(s) 7 month(s) 15 day(s)
Appellant HAJARAM P. PUROHIT, MUMBAI
Respondent ASST CIT CEN CIR 36, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 13-11-2014
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 13-11-2014
Date Of Final Hearing 21-08-2014
Next Hearing Date 21-08-2014
Assessment Year 2009-2010
Appeal Filed On 28-03-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNALH BENCH MUMB AI !'. $ %& % ' BEFORE SHRI JOGINDER SINGH JM AND SHRI D. KARUNAKARA RAO AM ITA NOS.2409/MUM/2013 ASSESSMENT YEARS-2009-10 SHRI HAJARAM P. PUROHIT 33 GANESH BHAVAN 3 RD KHATWADI LANE MUMBAI-400004 ( ( ( ( / VS. ASST. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-36 ROOM NO.11 AAYAKAR BHAVAN M.K.MARG MUMBAI-400020 ) %& ./ PAN :AGUPP6813E ( )* / APPELLANT ) .. ( + )* / RESPONDENT ) )* - . % / ASSESSEE BY: SHRI K.GOP AL + )* - . % / RESPONDENT BY : SHRI SACHIDANAND DUBE ( - /'& / DATE OF HEARING 12/11/2014 01 - /'& / DATE OF PRONOUNCEMENT : 13/11/2014 %2 / O R D E R PER JOGINDER SINGH JM: THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 14/12/2010 OF THE LD. FIRST APPELLATE AUTHORITY MUM BAI. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION O F DELAY OF 04 DAYS. KEEPING IN VIEW THE TOTALITY OF FACTS THE DELAY IS CONDONED. 2. THE FIRST GROUND RAISED BY THE ASSESSEE PERTAINS TO CONFIRMING THE ADDITION AT THE RATE OF 3% OF THE SA LES TREATING THE 2 SHRI HAJARAM P.PUROHIT SAME AS UNDISCLOSED COMMISSION AMOUNTING TO RS.29 7 9 570/-. THE CRUX OF ARGUMENTS ADVANCED BY SHRI K. GOPAL LD . COUNSEL FOR THE ASSESSEE IS THAT THERE IS NO BASIS FOR ADO PTING THE FIGURE AT 3% OF THE TOTAL SALES AS UNDISCLOSED COMMISSION OF THE ASSESSEE FROM BOGUS ACCOMMODATION ENTRIES. ALTERNA TIVELY IT WAS CONTENDED THAT SUCH ADOPTION IS TOWARDS HIGHER SIDE. ON THE OTHER HAND THE LD. DR SHRI SACHIDANAND DUBEY CONTENDED THAT THE ASSESSEE OBTAINED/ISSUED BOGUS PURCHASE BI LLS AND DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE SH OWED SALES AMOUNTING TO RS.9 72 52 348/- AND AS PER MARKET INF ORMATION THE RATE WAS 3% ON SUCH BOGUS BILLS. THE CONCLUSIO N DRAWN BY THE LD. ASSESSING OFFICER/CIT(A) WAS DEFENDED . 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. THE FACTS AND BRIEFS ARE THAT THE ASSESSEE AN INDIVIDUAL WAS IN THE BUSINESS OF TRAD ING AND WAS A STOCKIST OF FERROUS AND NON-FERROUS METAL UNDER THE NAME AND STYLE M/S RINKU STEEL CORPORATION. THE ASSESSEE DE CLARED INCOME OF RS.4 27 149/- IN HIS RETURN FILED ON 30/0 9/2009 WHICH WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY; CONSEQUENTL Y NOTICES WERE ISSUED AND SERVED UPON THE ASSESSEE. A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL AND BU SINESS PREMISES OF M/S Y A MAMAJI FURNISHING PVT. LTD. ON 28/01/2011 AND SIMULTANEOUSLY SURVEY ACTION WAS CONDUCTED AT T HE BUSINESS PREMISE OF THE ASSESSEE. DURING THE COURSE OF SURV EY STATEMENT OF SHRI HAJARAM PUROHIT THE ASSESSEE PROPRIETOR O F M/S RINKU 3 SHRI HAJARAM P.PUROHIT STEEL CORPORATION WAS RECORDED ON OATH U/S 131 OF T HE ACT. THE RELEVANT PORTION OF THE STATEMENT IS AVAILABLE ON P AGE 2 OF THE ORDER OF THE ASSESSING OFFICER. THEREFORE IT IS N OT REPEATED BEING MATTER OF RECORD. WE NOTE THAT IN THE STATEMENT TH E ASSESSEE CATEGORICALLY TENDERED THAT HE HAS TAKEN ACCOMMODAT ION ENTRIES IN THE FORM OF PURCHASES AND ALSO PROVIDED SUCH ENT RIES. THE ASSESSEE ALSO PROVIDED THE NAMES OF SUCH PARTIES/CO NCERNS. IN REPLY TO QUESTION NO.8 OF THE STATEMENT HE STATED THAT SUCH ACCOMMODATION ENTRIES ARE IN THE NATURE OF SALES TO VARIOUS PARTIES AND THE NAMES OF SOME OF THE PARTIES (20) H AVE BEEN MENTIONED. THE ASSESSEE FURTHER TENDERED IN HIS ST ATEMENT OF EARNING ON AN AVERAGE @ 1.5% ON SUCH ACCOMMODATION ENTRIES. THE ASSESSEE VIDE SUBMISSIONS DATED 21/12/2011 FURN ISHED THE DETAILS OF PURCHASES ABOVE RS.1 LAKH FOR A.Y. 2009- 10 AND AS PER THE LIST THE TOTAL CAME TO RS.9 92 14 632/-. THE A SSESSEE ACCEPTED TO HAVE OBTAINED BOGUS PURCHASE BILLS BUT DID NOT PRODUCE THE COPIES OF BILLS OF SUCH PARTIES. IN TH E ABSENCE OF IDENTITY OF SUCH PARTIES AND ON THE BASIS OF MARKET INFORMATION THE ASSESSING OFFICER WORKED OUT THE COMMISSION @ 3 % AND THUS THE AMOUNT OF RS.29 17 570/- (3% OF RS. 9 72 52 348 /- TOTAL SALES) WAS ADDED TO THE TOTAL INCOME OF THE ASSESSE E. ON APPEAL THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AFFIRM ED THE ADDITION MADE BY THE ASSESSING OFFICER. THE ASSESS EE IS IN FURTHER APPEAL BEFORE THIS TRIBUNAL. 3.1. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDE R FOR MAKING THE ADDITION CONCLUSION DRAWN IN THE IMPUGNED ORDE R MATERIAL 4 SHRI HAJARAM P.PUROHIT AVAILABLE ON RECORD AND THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNSEL IF KEPT IN JUXTAPOSITION AND ANALYZED TH ERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE MADE BOGUS SA LE/PURCHASES IN THE FORM OF ACCOMMODATION ENTRIES AND EARNED PRO FIT THEREFROM. THE ASSESSEE HIMSELF PROVIDED THE LIST OF VARIOUS CONCERNS/PARTIES/PERSONS TO WHOM SUCH ENTRIES WERE PROVIDED/TAKEN. THE ASSESSEE ALSO DID NOT PROVIDE THE CORRECT ADDRESSES/PAN NUMBERS OF SUCH PARTIES THUS THEIR ID ENTITIES COULD NOT BE VERIFIED RESULTING INTO HINDRANCE IN CONDUCTING ENQUIRIES AT THAT STAGE ONLY AND THE SCAM COULD NOT BE UNEARTHED. ON THE BASIS OF FIGURES PROVIDED BY THE ASSESSEE THE TOTAL OF SUCH ENTRIES CAME TO RS.9 72 52 348/-. TH E MOOT QUESTION BEFORE US PERTAINS TO ADOPTION OF COMMISSI ON RATE AND ITS REASONABLENESS. ONE FACT WORTH MENTIONING IS T HAT IN THE ABSENCE OF SEARCH/SURVEY THE ASSESSEE WOULD HAVE G ONE SCOT FREE. EVEN THE EXTENT OF THIS BOGUS BUSINESS COUL D NOT BE VERIFIED/ASCERTAINED AS THE ASSESSEE DID NOT PROVID E THE CORRECT ADDRESSES OF THE CONCERNED PARTIES. THE CLAIM OF T HE ASSESSEE IS THAT THE RATE COULD BE APPLIED AT 1.5% OF THE AMOUN T. THE REVENUE AUTHORITIES COLLECTED INFORMATION FROM THE MARKET AND THUS ADOPTED THE RATE AT 3%. KEEPING IN VIEW THE TOTALITY OF FACTS AND THE CIRCUMSTANCES MORE SPECIFICALLY WHEN THE AS SESSEE ITSELF TENDERED THAT HE PROVIDED/RECEIVED ACCOMMODATION EN TRIES BY WAY OF BOGUS SALE/PURCHASE THEREFORE THE ADOPTION OF RATE AT 3% THAT TOO AFTER OBTAINING INFORMATION FROM THE MARKE T SEEMS TO BE JUSTIFIED. AT THE SAME TIME THE ASSESSEE HAS NEITH ER PRODUCED ANY EVIDENCE NOR EXPLAINED AS TO HOW THE RATE ADOPT ED BY THE 5 SHRI HAJARAM P.PUROHIT ASSESSING OFFICER IS EXCESSIVE. EVEN OTHERWISE LAW HELPS THOSE WHO COME WITH CLEAN HANDS/AUTHORIZED BUSINESS AND N OT AS HAS BEEN DONE BY THE ASSESSEE FOR MAKING BOGUS ACCOMMOD ATION ENTRIES THEREFORE NO LENIENCY IF ANY CAN BE EXT ENDED TO THE ASSESSEE. WE AFFIRM THE CONCLUSION/STAND TAKEN BY THE LD. ASSESSING OFFICER WHICH WAS FURTHER AFFIRMED BY THE LD. FIRST APPELLATE AUTHORITY RESULTING INTO DISMISSAL OF TH IS GROUND OF THE ASSESSEE. 4. THE NEXT GROUND PERTAINS TO TREATING THE DEPOSIT OF RS.1 18 85 178/- IN STANDARD CHARTERED BANK AS UNE XPLAINED MONEY INVOKING THE PROVISIONS OF SECTION 69A OF TH E ACT. AS DISCUSSED EARLIER IN HIS STATEMENT RECORDED ON 28/ 01/2011 THE ASSESSEE TENDERED THAT THE BANK ACCOUNT IN WHICH T HE AFOREMENTIONED AMOUNT WAS FOUND WAS NOT REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. THE BANK STATEMENT FOR T HE PERIOD FROM 01/04/2008 TO 31/03/2009 WAS PRODUCED DURING ASSESSMENT PROCEEDINGS BY THE ASSESSEE THE SOURCE OF WHICH COULD NOT BE EXPLAINED. SO FAR AS THE CONTENTION O F THE ASSESSEE THAT WITHDRAWALS MADE WERE RE-DEPOSITED IN THE BANK ACCOUNT AND HENCE SET OFF IS REQUIRED TO BE GIVEN OF SUCH W ITHDRAWALS IS CONCERNED ALSO HAVING NO FORCE AS THE ASSESSEE MAD E THE WITHDRAWALS IN CASH AND THE DEPOSITS ARE MOSTLY BY CHEQUE. IT WAS ALSO NOT EXPLAINED AS TO WHAT WAS THE SPECIFIC PURPOSE FOR SUCH WITHDRAWALS IN CASH AND WHY THE SAME WAS BEING RE- DEPOSITED IN THE SAME BANK ACCOUNT AND MORE SPECIFI CALLY WHEN THE WITHDRAWAL AND RE-DEPOSIT WAS NOT CO-RELATED C ONSEQUENTLY 6 SHRI HAJARAM P.PUROHIT THIS EXPLANATION OF THE ASSESSEE CANNOT BE ACCEPTED . THUS THE ASSESSING OFFICER RIGHTLY TREATED THE SAME AS UNEXP LAINED MONEY AND ADDED U/S 69A OF THE ACT WHICH WAS AFFIRMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). 4.1 WE NOTE THAT SECTION 69A DEALS WITH UNEXPLAINED MONEY OF WHICH THE ASSESSEE IS FOUND TO BE THE OWNER. WHERE POSSESSION OF THE MONEY IS UNDISPUTED OR ADMITTED UNDER THE PR OVISION OF SECTION 110 OF THE EVIDENCE ACT THE ONUS TO EXPLAI N THE SOURCE OF SUCH SUM IS UPON THE PERSON WHO POSSESS THE SAME OR TO SHOW THAT HE IS NOT THE OWNER OF SUCH MONEY. THEREFORE BURDEN IS NOT ON THE DEPARTMENT UNDER THE FACTS IS ON THE ASSES SEE HE IS NOT THE OWNER OF THE AMOUNT FOUND IN HIS POSSESSION OR IN HIS BANK ACCOUNT. THE RATIO LAID DOWN IN SUKHRAM VS ACIT 28 5 ITR 256 (DEL.) CIT VS KTMS MAHMOOD 228 ITR 113 (MADRAS) K ANTILAL CHANDULAL VS CIT 136 ITR 889 (KOL.) CHUHARMAL VS C IT 172 ITR 250 (SC) DURGA KAMAL RICE MILL VS CIT 130 TAXMAN 5 53 (KOL.) CIT VS G. ANANDRAJAN 228 ITR 664 (KERALA) AND CIT V S K CHINNATHAMBAN 292 ITR 682 (SC) SUPPORTS OUR VIEW. IT IS NOT THE CASE THAT THE REVENUE HAS RELIED UPON THE STATE MENT OF THIRD PARTIES. THE UNEXPLAINED DEPOSITS WERE MADE BY THE ASSESSEE IN THE BANK ACCOUNT WHICH WAS NOT DISCLOSED TO THE REV ENUE AUTHORITIES. EVEN WHILE RECORDING THE STATEMENT T HE ASSESSEE ADMITTED THAT THIS ACCOUNT WAS NOT REFLECTED IN THE REGULAR BOOKS OF ACCOUNT AND IS UNDISCLOSED. IN REPLY TO QUESTIO N NO. 6 THE ASSESSEE TENDERED THAT THIS ACCOUNT WAS OPENED AROU ND TWO YEARS BACK AND THIS ACCOUNT IS USED FOR THE TRANSAC TION FOR THE 7 SHRI HAJARAM P.PUROHIT PURPOSES OF ACCOMMODATION ENTRIES WHICH ARE DONE C OMPLETELY OUT OF BOOKS. IN SUCH A SITUATION AND THE FACTS AV AILABLE ON RECORD WE HAVE NO HESITATION TO CONCLUDE THAT ADDI TION WAS RIGHTLY MADE BY THE LD. ASSESSING OFFICER AND CONFI RMED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS). THIS GROUND OF THE ASSESSEE IS THEREFORE DISMISSED. 5. FINALLY THE APPEAL OF THE ASSESSEE IS DISMISSED . THIS ORDER WAS PRONOUNCED ON 13 TH NOVEMBER 2014. SD/- SD/- D.KARUNAKARA RAO JOGINDER SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI; 3( DATED.- 13/11/2014 F{X~{T? P.S/. ( . . %2 %2 %2 %2 - -- - +/4 +/4 +/4 +/4 5%41/ 5%41/ 5%41/ 5%41/ / COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. + )* / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- CONCERNED MUMBAI 4. 6 / CIT CONCERNED MUMBAI 5. 4 7 +/( / DR ITAT MUMBAI E BENCH 6. !8 9 / GUARD FILE. %2( %2( %2( %2( / BY ORDER 4/ +/ //TRUE COPY// : :: : / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI.