THE DCIT CIR 3(3), MUMBAI v. M/S. VIDEOCON INTERNATIONAL LTD, MUMBAI

ITA 4759/MUM/2008 | 1994-1995
Pronouncement Date: 23-12-2011 | Result: Dismissed

Appeal Details

RSA Number 475919914 RSA 2008
Assessee PAN AAACV2300H
Bench Mumbai
Appeal Number ITA 4759/MUM/2008
Duration Of Justice 3 year(s) 5 month(s) 5 day(s)
Appellant THE DCIT CIR 3(3), MUMBAI
Respondent M/S. VIDEOCON INTERNATIONAL LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 23-12-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 23-12-2011
Date Of Final Hearing 08-12-2011
Next Hearing Date 08-12-2011
Assessment Year 1994-1995
Appeal Filed On 18-07-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHIRI R. S. PADVEKAR J.M. AND SHRI RAJENDRA SINGH A.M. ITA NO. : 4759/MUM/2008 ASSESSMENT YEAR : 1994-95 D.C.I.T. CIRCLE - 3(3) ROOM NO. 609 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020 VS. M/S. VIDOCON INTERNATIONAL LTD. 171/C MITTAL COURT ROAD NARIMAN POINT MUMBAI-400 021 PAN NO: AAACV 2300 H (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SHAILESH S. SHAH RESPONDENT BY : SHRI S UBACHAN RAM DATE OF HEARING : 08 .1 2 .2011 DATE OF PRONOUNCEMENT : 23.12.2011 ORDER PER RAJENDRA SINGH (AM) : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 31.03.2008 OF THE LD. CIT(A)-XXXII MUMBAI FOR THE ASSESSMENT YEAR 1994-95. THE ONLY DISPUTE RAISED IN THIS APPEAL IS REGARDING THE ADDITION OF `. 2 CRORES MADE BY THE AO AS UNEXPLAINED EXPENDITURE U/S.69(C) OF THE I.T. ACT. 2. THE FACTS IN BRIEF ARE THAT THE AO AT THE TIME O F ASSESSMENT PROCEEDINGS RECEIVED THE INFORMATION TO THE FACT TH AT SHRI B. N. SAFAYA THE THEN ADDITIONAL PRIVATE SECRETARY TO CAPTAIN SA TISH SHARMA THE THEN MINISTER OF PETROLEUM AND NATURAL GAS HAD MADE STATEMENT ITA NO : 4759/MUM/2008 M/S. VIDEOCON INTERNATIONAL LIMITED 2 BEFORE THE ENQUIRING OFFICER IN CASE OF JMM MPS BRI BERY CASE THAT HUGE AMOUNTS WERE PAID BY VARIOUS INDUSTRIAL HOUSES INCL UDING THE SUM OF `. 2 CRORES PAID BY THE ASSESSEE TO CAP. SATISH SHARMA . THE AO ALSO NOTED THAT BASED ON SAID STATEMENT CBI HAD FILED A CHARGE SHEET IN CASE OF CWP 789/56 RASHTRIYA MUKTI MORCHA V/S. SURA J MANDAL AND OTHERS. IT HAD BEEN ALLEGED THAT THE ASSESSEE HAD P AID `. 1 CRORE IN JULY 1993 AND `. 1 CRORE IN OCTOBER 1993 TO CAP. SATISH SHARMA. THE AO THEREFORE MADE ADDITION OF `. 2 CRORES AS UNEXPLAINED EXPENDITURE IN CASE OF THE ASSESSEE WHICH WAS ALSO CONFIRMED B Y CIT(A). SUBSEQUENTLY THE TRIBUNAL IN THE ORDER DATED 17.09 .2004 IN ITA NO.598/MUM/1998 NOTED THAT THE ASSESSEE HAD NOT BEE N GIVEN COPIES OF THE DOCUMENTS RELIED UPON I.E. COPIES OF CHARGE SHEET AND COPY OF STATEMENT MADE BY SHRI B. N. SAFAYA. THE TRIBUNAL O BSERVED THAT THE BURDEN LAY ON THE PERSON WHO MADE THE ALLEGATION TH AT THE AMOUNT HAD BEEN PAID. THE TRIBUNAL SET ASIDE THE ORDER OF THE CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO FOR PASSIN G A FRESH ORDER. 2.1 DURING THE FRESH ASSESSMENT PROCEEDINGS THE AS SESSEE DENIED THAT IT HAD MADE ANY PAYMENT TO CAP. SATISH SHARMA. THE ASSESSEE ALSO SUBMITTED THAT IT HAD NOT BEEN GIVEN THE COPIE S OF STATEMENT OF SHRI SHAILENDRA MAHATO AND SHRI SAFAYA AND NO OPPOR TUNITY WAS GIVEN TO CROSS EXAMINE THEM. THE ASSESSEE ALSO INVITED TH E ATTENTION OF THE AO TO THE DECISION OF DELHI HIGH COURT IN CASE OF J MM MPS BRIBERY CASE IN WHICH THE HON'BLE HIGH COURT HAD FOUND THE STATEMENTS OF SHRI B. N. SAFAYA AND SHRI SHAILENDRA MAHATO AS UNR ELIABLE. THE AO HOWEVER DID NOT ACCEPT THE CONTENTIONS RAISED AND AGAIN ADDED A SUM OF `. 2 CRORES AS INCOME OF THE ASSESSEE U/S.69C. THE ASS ESSEE DISPUTED THE DECISION OF THE AO AND MADE THE FOLLOWING SUBMI SSIONS BEFORE CIT(A) :- ITA NO : 4759/MUM/2008 M/S. VIDEOCON INTERNATIONAL LIMITED 3 THAT THE PROVISIONS OF SECTION 69C ARE WRONGLY INVO KED AS THE FACT OF INCURRENCE OF EXPENDITURE HAS NOT BE EN CONCLUSIVELY PROVED. THE APPELLANT HAS GIVEN NECESS ARY EXPLANATION ALONG WITH EVIDENCE PUBLISHED IN THE PR ESS FOR DENIAL OF PAYMENT OF ANY AMOUNT AS ALLEGED. THAT THE ADDITION IS MADE PURELY ON SUSPICION BASIS AND ON THE BASIS OF BALD STATEMENT CONTAINED IN THE CHA RGE SHEET. THAT AFTER EMPHATIC DENIAL OF THE APPELLANT ONUS WA S ON THE DEPARTMENT TO PROVE THE ALLEGED PAYMENT AND OPPORTUNITY SHOULD HAVE BEEN GIVEN TO THE APPELLANT TO EXAMINE/CROSS-EXAMINE THE STATEMENTS AND EVIDENCES INTENDED TO BE USED AGAINST IT. THAT THE ASSESSING OFFICER HAS NOT COLLECTED OR ADD UCED ANY EVIDENCE IN SUPPORT OF THE AFORESAID ADDITION A ND HAS NOT EVEN APPLIED HIS MIND THERETO. HE HAS NOT E VEN CROSS EXAMINED SHRI B. N. SAFAYA HIMSELF. THAT THE DELHI HIGH COURT HAS FOUND THE STATEMENT O F SHRI SHAILENDRA MAHATO AS WELL AS SHRI B. N. SAFAYA AS UNRELIABLE AND THE SAME HAVE BEEN DISCARDED. THE AO S RELIANCE ON THE STATEMENT OF SHRI SAFAYA IS THEREFO RE NOT CORRECT. THAT THE ADDITION MADE IS BASED ON SURMISES AND CONJECTURES AND AS A RESULT OF SUSPICION. THAT EVEN AFTER DIRECTION OF ITAT NEITHER THE APPELLANT COMPANY WA S PROVIDED THE STATEMENTS OF SHRI SHAILENDDRA MAHATO AND SHRI SAFAYA NOR THE OPPORTUNITY TO CROSS-EXAMINE TH EM WAS PROVIDED TO THE APPELLANT COMPANY. IN THE LIGHT OF ABOVE FACTS OF THE CASE THE AR VEHEMENTLY SUBMITTED THAT THE QUESTION OF EXPLAININ G SOURCE OF THESE AMOUNTS DOES NOT ARISE IN THE APPEL LANTS CASE AS NO SUCH PAYMENTS WERE MADE AND THE CASE OF THE DEPARTMENT IS BASED ONLY ON ALLEGATION WITHOUT ANY EVIDENCE IN SUPPORT OF ITS STAND EXCEPT STATEMENT O F SHRI SAFAYA AND SHRI SHAILENDRA MAHATO WHICH HAVE BEEN FOUND UNRELIABLE BY DELHI HIGH COURT. 3. CIT(A) AFTER NECESSARY EXAMINATION OBSERVED THAT THE AO HAD NOT PROVIDED COPIES OF STATEMENT OF SHRI B. N. SAFAYA A ND SHRI SHAILENDRA ITA NO : 4759/MUM/2008 M/S. VIDEOCON INTERNATIONAL LIMITED 4 MAHATO TO THE ASSESSEE AS DIRECTED BY THE ITAT IN T HE EARLIER ROUND OF APPEAL. THE ASSESSEE HAD GIVEN ONLY COPY OF EXTRACT FROM THE CHARGE SHEET. CIT(A) ALSO OBSERVED THAT THE STATEMENTS OF SHRI B. N. SAFAYA AND SHRI SHAILENDRA MAHATO HAD ALREADY BEEN CONSIDE RED AS UNRELIABLE BY DELHI HIGH COURT IN CASE OF JMM MPS B RIBERY CASE AND HAS BEEN DISCARDED. THE DELHI HIGH COURT HAD ALSO D ISMISSED TWO PETITIONS SEEKING INDEPENDENT PROSE REGARDING THE A LLEGATION OF SIMILAR PAYMENT TO CAP. SATISH SHARMA BY RELIANCE INDUSTRIE S ON THE BASIS OF STATEMENT OF SHRI B. N. SAFAYA. CIT(A) THEREFORE SET ASIDE THE ORDER OF THE AO AND DELETED THE ADDITION MADE AGGRIEVED BY W HICH THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 4. BEFORE US THE LD. AR FOR THE ASSESSEE REITERATE D THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. IT WAS ALSO SUBM ITTED THAT THE CASE OF THE ASSESSEE WAS COVERED BY THE DECISION OF TRIB UNAL VIDE ORDER DATED 21.04.2008 IN ITA NO.5141/MUM/2003 IN A SIMIL AR CASE OF M/S. ESSAR OIL LTD. VS. ACIT IN WHICH CASE ALSO SIMILAR ADDITIONS HAD BEEN MADE ON THE BASIS OF STATEMENT OF SHRI B. N. SAFAYA AND THE CONTENTS OF CHARGE SHEET BUT THE SAME WERE DELETED BY THE T RIBUNAL. THE LD. DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE R IVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING THE ADDITION OF `. 2 CRORES AS UNEXPLAINED EXPENDITURE U/S.69C OF THE I. T. ACT ON ACCOUNT OF ALLEGED PAYMENT OF `. 2 CRORES BY THE ASSESSEE TO CAP. SATISH SHARMA THE THEN MINISTER OF PETROLEUM AND NATURAL GAS. THE ADDITIONS WERE MADE BY THE AO ON THE BASIS OF CONTE NTS OF CHARGE SHEET FILED BY THE CBI IN CASE OF CWP 789/56 RASHTR IYA MUKTI MORCHA V/S. SURAJ MANDAL AND OTHERS ALLEGING THAT THE ASSE SSEE HAD PAID CAP. SATISH SHARMA A SUM OF `. 2 CRORES. THE SAID CHARGE SHEET WAS BASED ITA NO : 4759/MUM/2008 M/S. VIDEOCON INTERNATIONAL LIMITED 5 ON THE STATEMENT OF SHRI B. N. SAFAYA THE THEN ADD ITIONAL PRIVATE SECRETARY TO CAPTAIN SATISH SHARMA. UNDER THE PROVI SIONS OF SECTION 69C ANY EXPENDITURE INCURRED BY THE ASSESSEE WHICH IS NOT EXPLAINED SATISFACTORILY CAN BE TREATED AS INCOME OF THE ASSE SSEE. THE PRIMARY REQUIREMENT OF THE SECTION IS THAT INCURRING OF THE EXPENDITURE SHOULD BE CERTAIN. IN THIS CASE THERE WAS ONLY AN ALLEGAT ION OF PAYMENT BY THE ASSESSEE OF `. 2 CRORES TO CAP. SATISH SHARMA AND THE SAME IS NOT SUBSTANTIATED BY PROPER EVIDENCE. THE ALLEGATION OF PAYMENT WAS BASED ON STATEMENT OF SHRI B. N. SAFAYA MADE BY HIM BEFOR E THE ENQUIRY OFFICER IN JMM MPS BRIBERY CASE. BUT THE STATEMENT OF SHRI B. N. SAFAYA AND SHRI SHAILENDRA MAHATO HAVE ALREADY BEEN CONSIDERED AND NOT FOUND RELIABLE BY THE DELHI HIGH COURT IN THE C ASE OF JMM MPS BRIBERY CASE. THE DELHI HIGH COURT HAD ALSO DISMISS ED TWO SIMILAR PETITIONS FILED MAKING ALLEGATIONS OF BRIBERY BY R ELIANCE INDUSTRIES LTD. TO CAP. SATISH SHARMA. WE ALSO FIND THAT THE S IMILAR CASE OF ADDITION U/S.69C HAS ALREADY BEEN CONSIDERED BY THE TRIBUNAL IN CASE OF M/S. ESSAR OIL LTD. VS. ACIT IN ITA NO.5141/MUM/ 2003. IN THAT CASE ALSO THE CBI HAD FILED THE CHARGE SHEET NO. CW P 780/56 RASHTRIYA MUKTI MORCHA V/S. SURAJ MANDAL AND OTHERS AND SAID CHARGE SHEET WAS ON THE BASIS OF STATEMENT OF SHRI B. N. SAFAYA MADE BEFORE THE ENQUIRY OFFICER IN THE CASE OF JMM MPS B RIBERY CASE. THE TRIBUNAL NOTED THAT SHRI SAFAYA DURING THE CROSS EX AMINATION HAD STATED THAT HE DID NOT KNOW IF SHRI PRITHVI RAJ JIN DAL OF M/S. JINDAL SAW PIPES; SHRI V. N. DHUT OF M/S. VIDEOCON INTERNA TIONAL LTD.; SHRI SHASHI RUIA OF M/S. ESSAR GROUPS; SHRI DHIRU BHAI AMBANI AND SHRI MUKESH AMBANI OF M/S. RELIANCE GROUPS AND SHRI OSWA L OF M/S. BINDAL AGRO LUDIANA USED TO VISIT CAP. SATISH SHARM A AT HIS OFFICIAL RESIDENCE. HE ALSO DENIED THE SUGGESTIONS TO THE EF FECT THAT ON THE INSTRUCTION OF CAP. SATISH SHARMA HE USED TO RECEI VE FINANCIAL CONTRIBUTIONS FROM THE OWNERS/REPRESENTATIVES OF IN DUSTRIAL HOUSES. ITA NO : 4759/MUM/2008 M/S. VIDEOCON INTERNATIONAL LIMITED 6 THE ALLEGATION OF PAYMENT OF `. 5 CRORES BY ESSAR OIL LTD. WAS ALSO DENIED. THIS SPECIAL COURT THEREFORE QUASHED THE CHARGE SHEET FILED BY THE CBI ALLEGING PAYMENT BY ESSAR OIL LTD. TO CAP. SATISH SHARMA. THE TRIBUNAL ALSO NOTED THAT THE ASSESSEE HAD NOT BEEN GIVEN THE COPY OF STATEMENT OF SHRI B.N. SAFAYA. THE TRIBUNAL THEREF ORE DELETED THE ADDITION MADE BY THE AO U/S.69C OF THE I.T. ACT. TH E FACTS IN THE CASE OF THE ASSESSEE ARE IDENTICAL. THEREFORE RESPECTFU LLY FOLLOWING THE DECISION OF THE TRIBUNAL IN CASE OF ESSAR OIL LTD. (SUPRA) WE SEE NO INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETING TH E ADDITION MADE BY THE AO. THE ORDER OF THE CIT(A) IS ACCORDINGLY UPHELD. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 23 RD DAY OF DECEMBER 2011. S D/ - S D/ - ( R. S. PADVEKAR ) ( RAJENDRA SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DT: 23.12.2011 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T. 4. CIT (A) 5. THE DR F - BENCH ITAT MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI ROSHANI