TaxTMI 
TaxTMI 
2024 (4) TMI 596
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....r assessment year 2015 - 16 parties have filed cross appeals and for other years the Deputy Commissioner of Income Tax, Central Circle - 2 (2), Mumbai (The Learned AO) is in appeal. 2. These appeals are as under:- i. ITA number 2377/M/2023 is filed by The Deputy Commissioner of Income Tax, Central Circle - 2 (2), Mumbai (the AO) for assessment year 2014 - 15 wherein the appeal filed by the assessee against the assessment order passed under section 153C of The Income Tax Act dated 31/3/2022 was partly allowed. Following grounds of appeal are raised:- "1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition u/s 68 of the Income Tax Act, 1961 amounting to Rs. 1,81,00,000/- made by the assessing officer, without considering the facts and circumstances of the case and settled position of law. 2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition u/s 69C of the Income Tax Act 1961 amounting to Rs. 1,49,48,661/ made by the assessing officer, without considering the facts and circumstances of the case and settled position of law." ii. ITA ....
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....ting to Rs. 1,54,28,550/- made by an assessing officer, without considering the facts and circumstances of the case and settled position of law." iv. ITA number 2375/M/2023 is filed by the learned assessing officer for AY 2017-18 against the appellate order passed by the learned CIT - A wherein the assessment order passed under section 143 (3) read with section 153C of the act was partly allowed. Following grounds of appeal are raised:- "1. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) erred in deleting the addition was 68 of the Income Tax Act, 1961 amounting to Rs. 1,76,47,599/- made by the assessing officer without considering the facts and circumstances of the case and settled position of law. 2. Whether on the facts and circumstances of the case and in law, Ld. CIT (A) erred in deleting the addition u/s 69A of the Income Tax Act, 1961 amounting to Rs. 1,18,80,500/- made by the assessing officer. Without considering the facts and circumstances of the case and settled position of law. 3. Whether on the facts and circumstances of the case and in law, Ld. CIT(A) erred in deleting the addition u/s 69C of the Income Tax....
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....erson of the group on which the search has been conducted. iv. Mr. Manoj Sharma was working under the directions and instructions of Mr Jadish Joshi and Mr. Sharma is a relative of Mr JadishJoshi. Mr Manoj Sharma executed all the transactions at the behest of and under the instruction of Mr Jadish Joshi. v. Several materials were seized and found an impounded during search. It was found that Mr Manoj Sharma is handling business operations and other duties in India and in foreign countries. vi. During search based on the seized documents it was admitted by Mr Sharma in his statement that the cash handling work and hawala transaction of Mr Jadish Joshi's companies like Bhisma Agro foods products. Mr Sharma also managed Unicot Food products private limited. vii. In Income tax return, Mr Manoj Sharma has shown only nominal income that is below Rs. 5 lakhs. viii. During search it was found that his wife Mrs. Sangeeta Sharma is merely a partner on paper in the group entities of Mr Jadish Joshi holding 20% share of profit in the smart perfumery and essential oil, Samaira enterprises, director in global technology and trademark private limit....
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....thereafter M/s Unicote Food private limited are adopting similar strategies of showing its unaccounted sales up to assessment year 2017 - 18 in the name of Sangeeta enterprises and thereafter in the name of Samaira enterprises. xiv. Thus, the transactions are up to assessment year 2017 - 18 between and related to Bhisma Agro food products private limited relate to sales of Sangeeta enterprises and thereafter of Unicote Foods products private limited with Samaira enterprises. xv. Thus, after assessment year 2017 - 18, the names of the entities and the business operations were carried out in the different entities in similar manner. xvi. During search, at the premises of Unicot food products private limited, cash invoices issued by two entities namely M/s Samaira enterprises and M/s Sangeeta enterprises were found. The employees of the group stated that these invoices are prepared and managed in the premises of Unicote Food products private limited at the direction of Mr Manoj Sharma. xvii. It was further stated that these cash sales invoices prepared in the name of Samaira enterprises and Sangeeta enterprises are bogus in nature as no actual sales....
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....long with the cash sale invoices of Samaira enterprises and Sangeeta enterprises. 4. Therefore, the learned AO based on seized documents found that the sales recorded in the books of Sangeeta enterprises and Samaira enterprises is in fact sales of Bhisma Agro food products private limited and Unicote food products private limited. It was also found that both these dummy entities i.e., Samaira enterprises and Sangeeta enterprises have also shown some sales made by them to Bhisma Agro food products private limited and Unicote food products private limited for which there were no supporting documents either in the form of lorry receipt, transport details, delivery challans etc. Therefore, a sale made by these two dummy entities to the assessee and Unicote food products private limited is also not genuine. Thus, based on the lose documents found AO reached at the conclusion that :- i. Sales shown by Samaira enterprises is in fact unaccounted sale of Unicote food products private limited and sales shown by Sangeeta enterprises is unaccounted sale of Bhisma Agro food products private limited. ii. Purchases made by Unicote food products private limited from Samaira en....
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....ts pertain to the advertisement of product of the company, but no explanation was offered for the cash payment of Rs. 1.65 crores. The AO noted that as per annexure A - 29 cash vouchers for various parties for financial year 2014 - 15 amounting to Rs. 1.19 crores are found which is the remaining amount given to Mr Rajeev Arrora. The figures in the statement were mentioned in Kgs wherein 1 KG stands for Rs. 1 lakh. This was confirmed from document number 335 and 334. The document number 335 is a cash voucher dated 4/6/2014 stating 25 Kgs. Based on the actual cash voucher dated 5/6/2014 show the payment of Rs. 25 lakhs. Thus, the AO held that 1 KG refers to Rs. 1 lakh. Assessee was questioned about the explanation about advertisement expenditure of Rs 2.88 crores. Assessee could not show the substantial proof, or the cash transaction carried out between the assessee and Mr Rajeev Arrora. As assessee failed to establish the genuineness and the creditworthiness of the cash, transaction of Rs 2.88 crore given to Mr Rajeev Aurora the addition was made as unexplained expenditure under section 69C of the act. 11. Consequently, assessment order under section 153C of the Act was passed on....
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....sessee with respect to sales made by the assessee to Sangeeta enterprises. Thus, the deletion of the addition under section 68 of the income tax act has resulted into an appeal filed by the learned assessing officer before us. 14. The addition confirmed by the learned CIT - A under section 69C of Rs. 288 lakhs of unaccounted advertisement expenditure has resulted into appeal filed by the assessee before us. 15. On the ground of appeal of the learned AO, the learned departmental representative made a written submission on 13/2/2024 wherein he has discussed the various statements recorded during search. He submits that a statement of Mr Manoj Sharma was recorded on 10/2/2021 wherein in answer to question number 16 - 18 that there is an unaccounted sale in case of Unicote food products private limited. He also referred to the statement recorded of Mr Arvind Kumar Singh wherein he has specifically confessed in answer to question number 16 that Samaira enterprises did not make any sales. Cash is given by Mr Manoj to employees and is deposited in the account of Samaira. Ultimately, this cash deposited in the bank account of Samaira Enterprise was shown as sales in the books of Sama....
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.... the goods. 16. Against the above arguments, the learned authorised representative vehemently submitted that. i. Appellate order of the learned CIT - A which was relied upon by him in case of Unicot food products private limited has been upheld by the coordinate bench. ii. There is an identical facts pattern between the transaction between Unicote food products private limited with Samaira enterprises and of assessee i.e. Bhisma Agro Food products private limited and Sangeeta enterprises. This is admitted by the LD AO in assessment order itself. iii. sales are accounted for in the books of the assessee, quantitative details are produced, it is an excise duty chargeable product which has been sold, same is also recorded in the books of the assessee as sales, purchases are recorded in the books of Sangeeta enterprises, books of accounts of the assessee are not rejected but accepted, the sale consideration is received by cheque, quantitative details are not disputed either by the excise authorities, VAT authorities either in the case of the assessee or in the case of Sangeeta enterprises, these facts are not in dispute. iv. Addition is merely, ma....
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....s further stated that assessee has dealt with in excisable goods, paid excise duty on the removal of goods on monthly basis, such excise payment is not disputed by anybody, and therefore, removal of goods from the factory of the assessee is undisputed. xii. There is no evidence available with the revenue authorities that the goods removed from the factory of the assessee has travelled to different destination then dispatched to the premises of Sangeeta enterprises. 17. In the rejoinder, the learned departmental representative vehemently stated that. i. In the ITAT , CIT (A) and ld. AO order of Unicote Food products Private Limited there is no recording of the fact that whether the goods have travelled in the same lorry or not, the coordinate bench has also not given any finding of the fact but has merely reproduced the order of the learned CIT - A. In absence of any independent finding by the coordinate bench, that order does not bind the coordinate bench. ii. Even otherwise that decision is distinguishable on the fact that over and above the other allegations of the revenue, it is conclusively proved by the revenue that the lorry which has been mentio....
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.... operandi of generation of unaccounted cash and the weapons. In support of road distance from the appellant's address to the assessee's premises, the distances obtained from the Google Maps and vehicle registration detail shows that it is almost 50 km. Therefore, the sales made by the assessee to Sony time to prices could not have been accepted as genuine. 18. The learned authorised representative has also invoked the provisions of rule 27 of the ITAT's rules by the application dated 22/9/2023 wherein it has been stated that the satisfaction note recorded under section 153C does not have document identification number and therefore it is invalid. As satisfaction note is invalid, assessment based on that is also invalid. The learned authorised representative relied upon the decision of the honourable Bombay High Court in case of Ashok commercials enterprises [2023] 154 taxmann.com 144 (Bombay)/[2023] 459 ITR 100 (Bomb. Wherein it has been held that if an order/communication is to be issued without a DIN, it can be done only after recording reasons in writing in file and with prior written approval of Chief Commissioner/Director General of Income Tax. Therefore, the le....
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....he assessee. As the learned authorised representative failed to prove any communication, there is no question of putting document identification number thereon. Accordingly, the grounds raised by the learned authorised representative invoking the provisions of rule 27 of the ITAT rules are dismissed. 21. Now we come to the merits of the case of ground number 1. We have carefully considered the rival contention and perused the orders of the lower authorities. The allegation in this case is that for this assessment year 2017 - 18, addition u/s 68 has been made of sales made by assessee to Sangeeta enterprises and from assessment year 2018 - 19 onwards unicote food products Ltd has made its sale to Samaira enterprises. Such sale is recorded in the books of the assessee for the respective period and of Unicote food products private limited post FY 2017 - 18 that is bogus and therefore the addition under section 68 of the income tax act has been made. As far as the issue is concerned, up to assessment year 2017 - 18 and after 2018 - 19 in the case of assessee as well as Unicote Food products private limited is identical. The case of the unique court food products private limited has ....
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....8 of his finding as incorporated above. He has also noted that out of sales at Rs. 7,24,37,751/- made in F.Y. 2020-21, Rs. 4,21,43,750/- has been made to M/s. Samaira Enterprises which constitute 58% of the total sales. The ld. AO has not even examined the sales of M/s. Samaira Enterprises and has neither verified, whether the sales made by M/s. Samaira Enterprises is same which has been recorded in the loose papers. According to ld. AO, the entire cash sales reflected in the loose sheets pertain to the assessee when there are corresponding sales which has been accounted in the books of M/s. Samaira Enterprises. If that premise of the AO is to be accepted then sale of M/s. Samaira Enterprises would be nil which cannot be the case, because this entity has shown sales and is assessed to tax since past. Thus, based on these documents and the ld. CIT (A) has given his elaborate finding for his conclusion and given direction to the ld. AO in para 6.10 and 6.11 as incorporated above, wherein, he has directed the ld. AO to verify and cross check, whether the sales adopted by him from the loose sheets appears in the cash book / bank book / sales of M/s. Samaira Enterprises or not and simil....
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....aira enterprises, the coordinate bench has upheld in favour of the assessee. Therefore, we do not find any reason to deviate from the finding of the coordinate bench in that case. We confirm the order of the learned CIT - A deleting the addition of Rs. 104,044,908/- added by the learned assessing officer under section 68 of the income tax act of the sales made by the assessee to M/s Sangeeta enterprises. Accordingly, the ground No 1 raised by the learned AO is dismissed. 24. Second ground of appeal of the learned assessing officer is with respect to the deletion of the addition under section 69C of the act of Rs. 288 lakhs. On careful consideration of the order of the learned CIT - A in fact it is the ground of appeal of assessee as the learned CIT - A has not deleted the addition but has confirmed the addition. Therefore, this ground of appeal of the learned assessing officer is erroneously taken. This fact has also confirmed by the learned departmental representative that in fact the learned CIT - A confirmed the addition of Rs. 288 lakhs. Accordingly, ground number 2 of the appeal of the AO is dismissed. 25. In the result, appeal filed by the learned AO is dismissed. 26....
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....iven to Mr Rajeev Aurora has not been cleared as on 4/3/2014 of Rs. 2,224,728/- which is not cleared yet and the date is 4/3/2014 which means that all the writings and details on the page is on or before 4 March 2014 which further support the contention that the sum of Rs. 165 lakhs could not have been added in the relevant previous year ending on 31st of March 2015 and the date 31/12/2013 it is outside the relevant previous year. In view of this, it was the submission of the learned authorised representative that the impugned addition requires to be deleted. [4] He further contended that a sum of Rs. 64 lakhs is shown to be given by Mr Rajeev Arora and as such should not be considered the expenses of the appellant hence it could not be added even otherwise in the hands of assessee. His submission was that when the sum is given by Mr Rajeev Aura how the same could have been added in the hands of the assessee. He further stated that a sum of Rs. 5,922,000 is stated to be given to Rajeev and Soham and as such, the amount is not paid, hence it cannot be considered for making the unexplained expenditure in the hands of the assessee. He further stated that when the expenditure itself ha....
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....vertisement of product. The lower part of that document shows that how these expenditures have been disbursed. A sum of Rs. 165 lakhs is stated to be paid to Mr Rajeev Aurora till 31st of December 2013. Further, out of total payment of actors of Rs. 7,750,000, it is mentioned that payment of actors is given by Mr Rajeev amounting to Rs. 64 lakhs. Thus, some of total payment A plus B of Rs. 229 lakhs is a payment made by Rajeev Aurora stock further it is also mentioned that "total to be given to Mr Rajeev and Shoham" Rs. 5,922,000/-. Further, it is mentioned that on 4/3/2014 a cheque is given to Mr Rajeev of Rs. 2,224,728/- which has not yet been cleared. Thus, it is apparent that out of the total payment to be made of the expenditure of Rs. 28,222,000 the payment of Rs. 229 lakhs belongs to the period prior to 4/3/2014. Thus, the above payment, if at all made, does not belong to financial year 2014 - 2015. Thus, addition could not have been made for assessment year 2015 - 2016. There is another angle to this document. Apparently, the total amount of the expenditure that has been incurred is Rs. 28,822,000/-. These amounts of expenditure have been met by the assessee by payment made....
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....- 12 were found and seized. It contained the various details of cash receipts and expenditure. As per rule sheet number three cash transactions of Rs. 20,290,325/- were found. The learned AO questioned Mr Manoj Sharma to show the details of nature and source of generation of cash in hand along with documentary evidence for the same. He further asked to provide the details of utilisation of the case and the purpose of utilisation for the same and provide the details on that direction the amount was spent. The learned assessing officer found that addition of Rs 1 43,45,325/- is required to be made under section 69A and a sum of Rs. 4,945,000/- is required to be made under section 69C of the act as unexplained expenditure. Similarly, a loose paper number 4 was found wherein the cash transaction of Rs. 19,050,003 and 25 were found. The learned assessing officer noted that a sum of Rs. 9,566,775/- is required to be added as an unexplained money under section 69A of the act and sum of Rs. 9,483,550/- is required to be made under section 69C of the act. Despite the various opportunities, assessee could not furnish the explanation to the satisfaction of the learned assessing officer. The l....
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....ents were identical to lose sheet number 3 - 5 related to the assessee. Identical ground was raised by the learned assessing officer in assessment year 20 - 21 in case of unique court products private limited wherein the addition of Rs. 22,719,500 under section 69A of the act were made. The coordinate bench in paragraph number 14 of that order has referred to the explanation given by the assessee and the findings of the learned CIT - A in that case. Thereafter in paragraph number 15 the arguments of the parties were discussed and thereafter reasons and its decisions are given which is as under:- "15. After considering the above submissions made by the ld. CIT DR as well as ld. Counsel for the assessee we find that before the ld. AO as well as ld. CIT (A), assessee had stated that in order to cater to the demand of herbal nut in the state of Tamilnadu, there was another entity which was handling the supply chain to various retailers and small vendors which was M/s. Samaira Enterprises. The assessee would sell the product to M/s. Samaira Enterprises, which in turn would sell the products to the small and unorganized pan masala customers from its office / depot as over the co....
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....the cash book / bank book / sales of M/s. Samaira Enterprises or not and similar exercise to be undertaken with respect to expenses of the outgoing in the loose sheets seized and impounded from the ITA No.1803-1805/Mum/2023 M/s. Unicot Food Products Pvt. Ltd. 18 search proceedings. We do not find any reason to tinker with such a direction, which is based on the facts and material on record. Accordingly, order of the ld. CIT (A) is confirmed on the grounds raised by the Revenue is dismissed." 36. As the facts in that case, the loose papers also are similar except the change in the amount and the order of the learned AO and the learned CIT - A are also identical,, respectfully following the decision of the coordinate bench we dismiss ground number 2 of the appeal of the AO and confirmed the order of the learned CIT - A deleting the addition of Rs. 23,912,100/- made by the learned AO under section 69A of the act. 37. Ground number 3 of the appeal is with respect to the addition of u/s. 69C of Rs. 15,428,550/- made by the assessing officer which was deleted by the learned CIT - A. This is also based out of same seized paper number three and number four wherein part of the additio....
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....hich the learned AO made an addition of Rs. 11,880,500 under section 69A of the act of unexplained money and further in addition of Rs. 14,784,670/- is made under section 69C of the act as unexplained expenditure. As both these grounds of appeal are identical to issue in appeal of the learned AO for assessment year 2016 - 17, as there is no change in the facts and circumstances of the case, orders of the lower authorities and the arguments of the parties, as those grounds have been dismissed and the order of the learned CIT - A has been confirmed for assessment year 2016 - 17, we also for the similar reasons, dismiss ground number 2 and 3 of the appeal of the AO for assessment year 2017 - 18. 41. Accordingly, appeal of the learned assessing officer for assessment year 2017 - 18 in ITA number 2375/M/2023 is dismissed. ITA number 2373/M/2023 AY 2018-19 42. ITA number 2373/M/2023 is filed by the learned assessing officer for assessment year 2018 - 19 wherein the only ground of appeal is with respect to the deletion of addition of Rs. 11,405,099 made under section 68 of the income tax act by the learned assessing officer with respect to the sales made by the assessee to M/s Sa....
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....while dealing with ground number 2 and confirmed the order of the learned CIT - A deleting the addition. As all the parameters such as arguments, findings, directions remain the same, we respectfully following the decision of the coordinate bench dismiss ground number 2 of the appeal of the learned AO and confirm the order of the learned CIT - A. 46. Accordingly, ITA number 2377/M/2023 filed by the learned that assessing officer for assessment year 2014 - 15 is dismissed. 47. ITA number 2376/M/2023 is filed by the learned assessing officer for assessment year 2021 - 22 raising ground number 1 with respect to the addition under section 68 of the act of Rs. 4,188,000 and another ground of addition under section 69A of Rs. 4,279,483/deleted by the learned CIT - A. 48. Ground number one is identical to ground number 1 in appeal of the learned assessing officer for all other years wherein the addition is made with respect to the sales made by the assessee to M/s Sangeeta Enterprises. This has been dealt with in appeals of the assessing officer for earlier years as per ground number 1 of those appeals wherein the order of the learned and CIT - A has been confirmed. As there is n....