Income Tax Appellate Tribunal - Mumbai
Mr. Dheeraj Jain, Mumbai vs Ito 24 (1)(5), Mumbai on 2 February, 2021
THE INCOME TAX APPELLATE TRIBUNAL
"SMC" Bench, Mumbai
Shri Shamim Yahya (AM)
I.T.A. No. 5949/Mum/2019 (Assessment Year 2009-10)
I.T.A. No. 5950/Mum/2019 (Assessment Year 2010-11)
Mr. Dheeraj Jain ITO-24(1)(5)
401, Dipti Pearls Vs. Pirmal Chambers
86, Rajasthan CHSL Lalbaug
J.B. Nagar, Andhri-E Parel
Mumbai-400 059. Mumbai-400 012.
PAN : ABMPJ3453D
(Appellant) (Respondent)
Assessee by Shri Neelkanth Khandelwal
Department by Ms. Smita Verma
Date of He aring 16.12.2020
Date of Pronouncement 02.02.2021
ORDER
These are appeals by the assessee against the order of learned Commissioner of Income Tax (Appeals) [in short learned CIT(A)] dated 26.8.2019 pertaining to assessment years 2009-10 & 2010-11.
2. The issue raised is that learned CIT(A) erred in sustaining the addition under section 68 of the following amounts :-
Assessment Year Amount
2009-10 20,00,000/-
2010-11 27,50,000/-
3. Since the facts are common I am referring to facts and figures from assessment year 2009-10.
4. Brief facts of the case are as under :-
The assessee e-filed his return of income on 30.10.2009 declaring total income at Rs.3,80,000/-Subsequently the case was selected for scrutiny under CASS and notice u/s. 14(1) of the IT Act, 1961 was issued to the Assessee on 2 M r . Dh e er a j J ai n 24.05.2016 and the same was served well within prescribed time. The assessee is an individual. He has declared income from salary Rs. 6,30,000/, House property (loss) Rs.1,50,000/- loss from business amounting to Rs.3,05,250/-.
He is engaged in business of trading in shares in the business of providing advisory and consultancy services. The Assessing Officer issued show-cause notice dated 05.12.2016 to furnish his explanation in respect of following issues.
5. The Assessing Officer further noted that as against date of hearing given for above show cause on 14.12.2016 assessee sought adjournment till 18.12.2016. However nobody attended in respect of show cause notice and only few details have been file in Tapal by the assessee. That during the course of search various search premises were shown by the assessee group to be the place of operations and registered addresses as per Income tax returns, MCA website and bank details were covered. That however, it was found that the entities were non-existing at these addresses and no genuine business was being carried out at any of these premises.
6. That during the course of search action statements recorded u/s. 132(4)/131 of the Act of those directors/proprietors admitted that they were merely dummy directors and used to sign different papers for nominal considerations given by Shri Pravin Kumar Jain. That they were unaware of the place of operations, books of account and the businessman being carried out by the concerns where they were directors. Show cause dtd. 05.12.2016 was issued to the assessee. That in this regard the assessee filed only confirmation and bank statement has been submitted. That too just three days before end of the limitation date for assessment. That hence, this can't be get verified. That when show-cause was already served on assessee onus for burden of proof was lying on the assessee. That from the details available on the record it was noticed that in FY 2008-09, assessee had outstanding loan from M/s. Yash V. Jewels Ltd. In view of the above the AO added the amount of loan as accepted by Pravin Kumar Jain Group for providing entries to the 3 M r . Dh e er a j J ai n income of the assessee as unexplained cash credit as per sec. 68 of the IT Act, 1961. Thus addition on this issue Rs.20,00,000/-. Penalty, proceedings u/s. 271(l)(c) was also initiated for furnishing inaccurate particulars of income.
7. Upon assessee's appeal learned CIT(A) noted that on couple of occasions when the case was posted nobody appeared on behalf of the assessee and on one occasion assessee sought adjournment. The learned CIT(A) opined that assessee doesn't have anything else to submit hence he decided as under :-
"The Addition made by the AO is based on the detailed findings of the Income tax Investigation Wing Mumbai in the case of Pravin Jain Group as the appellant is a beneficiary who has taken accommodation entry in the nature of loan/advance which is not genuine from a lender who was not carrying on any genuine business activity but was only providing accommodation entries in lieu of cash obtained from beneficiaries. The findings clearly established the nonexistence of entities who were providing accommodation entries. The statement recorded during the course of search revealed that the Director/ Proprietors were merely dummy Directors who provided their signature in return for nominal consideration. The bogus books of accounts of all entities involved in providing" accommodation entries were found at a discrete place of operation of Shri Pravin Kumar Jain which clearly indicated that there was no premises from which any genuine business activity was being carried out and that all books of account of these shell companies were under the control of Shri Pravin Kumar Jain. Also in the statement of Shri Pravin Kumar Jain recorded u/s. 132(4) at Question No. 63 the Kingpin and mastermind of this accommodation entry racket named various companies/ entities which were under his direct control and amongst this list of 39 such entities the names of the two entities which had afforded the loan of Rs.10 lakhs each to the appellant find appropriate mention. Thus, the addition made by the AO was based on solid fact and evidences.
In view of the findings of the A0 and the detailed evidences unearthed by the Income tax Investigation Wing and also the fact that the appellant has neither bothered to pursue the appeal filed, nor appointed any Authorised Representatives nor produced any concrete evidence in support of his contentions/grievances during the appellate proceedings nor attended any of the hearings fixed, I find no infirmity to interfere with the Assessment Order passed by the Assessing Officer. It is a matter of record that the Appellant did not attend to the Assessment proceedings before the Assessing Officer as well."
8. Against this order assessee is in appeal before the ITAT.
9. I have heard both the parties and perused the records. Learned counsel of the assessee contended that assessee should be granted one opportunity 4 M r . Dh e er a j J ai n before the learned CIT(A) to canvas the appeal properly. He submitted that assessee shall be cooperating now. On the contrary learned departmental representative objected to this proposition.
10. Upon careful consideration I note that assessee is seeking an opportunity before the learned CIT(A) to canvas the appeal properly. I note that authorities below have based the orders primarily on the finding of investigation wing of the income tax department. Proper adjudication by the authorities below is not apparent. Hence in the interest of justice I remit the issue to the file of learned CIT(A). Learned CIT(A) shall examine the issue afresh of giving the assessee and opportunity of being heard.
11. In the result, these appeals filed by the assessee stand allowed for statistical purposes.
Order pronounced under Rule 34(4) of the ITAT Rules by placing the result on notice board on 2.2.2021.
Sd/-
(SHAMIM YAHYA) ACCOUNTANT MEMBER Mumbai; Dated : 02/02/2021 Copy of the Order forwarded to :
1. The Appellant
2. The Respondent
3. The CIT(A)
4. CIT
5. DR, ITAT, Mumbai
6. Guard File.
BY ORDER, //True Copy// (Assistant Registrar) PS ITAT, Mumbai