R.W. Promotions P.Ltd , vs Assessee

ी आय.पी. बंसल, या यक सद य एवं ी संजय अरोड़ा, लेखा सद य के सम ।

BEFORE SHRI I.P. BANSAL, JM AND SHRI SANJAY ARORA, AM M.A. No. 194/Mum/2013(Assessment Year: 2007-08) (Arising out of I.T.A. No. 3969/Mum/2012)

M/s. R.W. Promotions Pvt. Ltd. , ACIT- (9)(3), M-30, Hirnen Shopping Centre, बनाम/ Mumbai.

M.G.Road, Goregaon (West), Vs. Mumbai-400062

थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. AACCR7660J

(अपीलाथ /Applicant) : ( !यथ / Respondent)

नधा$%रती क' ओर से / Applicant by : Shri Pradeep Kapasi

राज व क' ओर से / Respondent by : Shri Agshar Jain V.P. Sr. A.R.

सुनवाई क' तार,ख / : 22.05.2015 Date of Hearing

घोषणा क' तार,ख / : 12.06.2015 Date of Pronouncement

आदे श / O R D E R

Per Sanjay Arora, A. M.:

This is a petition u/s. 254(2) of the Income-tax Act, 1961 (the Act hereinafter) preferred by the assessee-appellant, directed against the order u/s. 254(1) dated 16.01.2013 passed by the Tribunal disposing its' captioned appeal.

2. The Miscellaneous Application assails the impugned order on several grounds, raising legal and factual issues. In fact, the application is argumentative, raising M.A.No.194 Mum 2013 M/s. R.W. Promotions Pvt. Ltd

several contentions, some of which we find as outright relevant. It may therefore be, at the outset, even as was during the hearing (of the instant proceedings), clarified that there is no scope for re-arguing the appeal in rectification proceedings, which would thus stand to be confined to clear mistakes of fact/s or even of law. We having clarified the premises and the scope of the present proceedings, proceed to discuss the issue raised by the assessee, in seriatim:

3. The first ground (numbered 3) states of the assessee having not been provided the copy of the reasons recorded for re-opening of assessment u/s. 147, but only the gist thereof. Without doubt, the reasons cannot be improved upon in any manner, of which there is in fact no allegation or charge, either in the appeal or in the present proceedings. It is, firstly, debatable that where the assessee is informed of the reasons for re-opening of assessment, though employing different words, conveying the same meaning and information, would the requirement of informing the assessee of the reasons be satisfied? The requirement is procedural, with a view to informing the assessee of the Revenue's case against it, so that, would not, secondly, even assuming strict compliance, so that the reasons had to conveyed verbatim, lead to the quashing of the assessment ( or re-assessment) or its restoration to such where the irregularity had crept in (Guduthur Bros. v. ITO [1960] 40 ITR 298 (SC). The forgoing two issues stand noticed by us only to exhibit the debatable nature of the controversy or the issues raised, impermissible u/s. 254(2). On facts, the Tribunal had clearly stated that the assessee had been in fact supplied the verbatim copy of the reasons, reproducing the same at paragraph 2 (page 2) of its order. The tribunal's findings appear at paragraph 2.8 of the impugned order. The omission of the last sentence is not a reason itself, but only the concluding sentence, stating of the foregoing as being the reasons for belief as to escapement of income. Inasmuch as the same does not bear any reason, we do not find that it could be said that the assessee had not been conveyed the reasons as to escapement of income, or had been so either in part or only the gist thereof, as alleged. That the same are only reasons leading to the belief as to the escapement of income is evident and implied. What are these then and for and toward what are they being given, or given as, etc. would be the queries arising out of the assessee's clearly unreasonable and unconvincing stand. Further, even 2 M.A.No.194 Mum 2013 M/s. R.W. Promotions Pvt. Ltd

assuming, without admitting, a debate, it would preclude section 254(2). The said ground is accordingly rejected.

4. Vide ground 3(ii), the assessee claims non-application of mind by the Assessing Officer (AO) in the matter, who has stated to have reopened simply on the basis of the findings of the DDIT(Inv.). The tribunal discusses this aspect at paragraph 2.11 through 2.15 of its order, meeting the assessee's arguments, to hold that there was material available with the AO on the basis of which a reasonable belief that income chargeable to tax had escaped assessment could be formed (paragraph 2.12). The same is a finding of fact, and for which the tribunal tranverses, as apparent from the discussion, through the said materials, issuing its final findings at paragraph 2.15. The assessee has also, vide ground 3(iii) referred to the tribunal's observation that assessment had been reopened on the basis of section 132(4) statement made at the time of search which was on oath (at paragraph 2.14). It is stated that in so stating, the tribunal has overlooked that there was a survey at the vendor's premises prior to the relevant search. How would, we wonder, that contradict or impugn the said observation by the tribunal in any manner? What the tribunal states is again a matter of fact, borne out by the reasons recorded and the material on record. Two, the fact that the search was preceeded by a survey, on the contrary, is defeating of the assessee's case inasmuch as, clearly, material was found in survey leading to the search. The statement by the tribunal, it must be appreciated, was made while considering the assessee's plea of there being no material for forming, prima-facie, a reasonable belief as to escapement of income. Whether, rather, there is material on record establishing the said survey is itself not known, for the assessee to have raised the plea, which though we have found as irrelevant. The ground is without basis.

5. Vide ground 4, the assessee raises several factual issues, or, rather, sub-issues. Each of these, in our view, amount to re-arguing the appeal. The tribunal confirmed the disallowance of expenditure booked in favour of the two concerns, M/s. Inorbit Marketing and Services Pvt. Ltd. and M/s. Nupur Management Consultancy Pvt. Ltd., in view of lack of substantiation of the actual rendering of the services, i.e., for

3 M.A.No.194 Mum 2013 M/s. R.W. Promotions Pvt. Ltd

which the sums had been 'paid' to them. There is nothing to show that the 'overwhelming evidences', as stated by the assessee, had not been considered by the tribunal. On the contrary, the tribunal found material on the basis of which it stood, in its view, established that the two concerns were shell companies, who had given accommodation entries to the assessee. In fact, there were 53 other parties, i.e., as the assessee, who had surrendered income consequent to the search (a number which the assessee confirms to be at 21, i.e., instead of 53). In fact, rather than the assessee proving the expenditure, as we see it, the tribunal considered the same to have been disproved. The relevant discussion appears at paragraphs 3 through 3.14 (pages 18-

30) of the tribunal's order. That documentary evidences may not by themselves be sufficient and could be unveiled by the assessing authority, is trite law, and for which reference may be made to the decisions in the case of CIT v. Durga Prasad More [1973] 82 ITR 540 (SC) and Sumati Dayal v. CIT [1995] 214 ITR 801 (SC), while the tribunal refers to the decisions in the case Lachminarayan Madanlal v. CIT [1972] 86 ITR 439 and Lakshmiratan Cotton Mills Co. Ltd. v. CIT [1969] 73 ITR 634 (SC). Each of the arguments raised by the assessee stand duly considered by the tribunal. Finding/s of fact, rendered upon appreciation of evidences, could not be revisited in rectification proceedings. We, accordingly, find no ground for the same.

6. Vide ground 5, the assessee claims that there was denial of opportunity to cross-examine the AO's witnesses and, thus, a violation of the principle of natural justice, further stating that the tribunal had, in like cases, restored the matter back to the file of the AO on that ground. Could, one may ask, the said orders by the tribunal questioned on the basis of a different view in the impugned order? The argument is misplaced. For all we know, the cross-examination may not have been asked for, being in the nature of deposition/s. The tribunal has considered the argument (refer para 3.10), and in its view the disallowance had not been affected only on the basis of the said statements and, two, that all the material had been duly confronted to the assessee. It also clearly states that the rendering of the services by the companies could not be accepted on the basis of affidavits (para 3.11). The said ground is, again, without merit.

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7. In the result, the assessee's M.A. is dismissed.

Order pronounced in the open court on June 12, 2015 Sd/- Sd/- (I.P. Bansal) (Sanjay Arora) या यक सद य / Judicial Member लेखा सद य / Accountant Member मुंबई Mumbai; 1दनांक Dated : 12.06.2015 न.स./Sharwan. PS

आदेश क त"ल#प अ$े#षत/Copy of the Order forwarded to :

1. अपीलाथ / The Applicant

2. !यथ / The Respondent

3. आयकर आय2 ु त(अपील) / The CIT(A)

4. आयकर आय2 ु त / CIT - concerned

5. 3वभागीय त न6ध, आयकर अपील,य अ6धकरण, मब ुं ई / DR, ITAT, Mumbai

6. गाड$ फाईल / Guard File

आदेशानस ु ार/ BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt. Registrar)

आयकर अपील य अ धकरण, मब ुं ई / ITAT, Mumbai

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