Y.K. Kapur, Member (J) - (1.) THESE three appeals filed by the assessee pertain to assessment year 1981-82, 82-83 and 83-84. In all these three years the assessee filed its return of income which was processed u/s. 143(3) of the IT Act. Needless to say that in these three years while filing the returns the assessee claimed payment of certain commissions to three companies, namely, M/s . Excavators India (PP Ltd. (EIP), M/s . Triveni International Products (P) Ltd. (TIP) and M/s Bahri & Co. (P) Ltd., (BCP). In all these three companies to whom the commission is claimed to have been paid by the assessee, one Mr. M.K. Meattle is the common Managing Director. After the assessments were complete u/s. 143(3) of the IT Act on 29.10.82, 28.9.83 and 24.5.83, some information was received by the Revenue that the commission claimed to have been paid to these concerns in the three years were bogus transactions. The complainant in the complaint is said to have informed the Deptt. that the payment paid to three companies was in fact withdrawn from their bank account and, thereafter paid back to the assessee. It this background it was informed that the payment of commission was not genuine. Consequent to the receipt of information, proceedings u/s 148 were initiated and the statement of one Mr M.K. Meattle who as stated above are the common MD of the three companies referred to above, was recorded.
(2.) Apart from the statement of Mr. Meattle, the statement of another person, namely, Mr. A.K. Jhunjhunwala who is stated to be the Chartered Account and claimed to be relative of Mr. M.K. Jajodia the MD of the assessee company was also recorded. The gist of the statement of these two persons were that the payment of commission to these three companies, namely EIP, TIP and BCP was not genuine and the basis as to how commission was not genuine was explained by these persons. In their statement recorded these persons explained that the amount of cheques for commission were deposited in the bank account(s) of the three companies and, thereafter, the amounts were withdrawn and paid back to Mr Jajodia. During the course of statement which we shall be referring to a little later it was stated by Mr. Meattle that he had agreed to carry out these transactions on the premise of a payment of one per cent charge on a business transaction of Rs 1 crore. Mr Meattle stated one per cent was the hawala charges for the transaction. Before the authorities at the time of recording of the statement Mr. Meattle explained that he was approached by Mr. A.K. Jhunjhunwala, whose statement was also recorded separately, for agreeing to act in the manner referred to above payment of Hawala charges @ 1%. Mr. Meattle informed the Revenue during his statement that the bank accounts were opened in the name of three companies in two banks at Delhi and the cheques received for the alleged payments of commission were deposited in these accounts. According to Mr. Meattle, Jhunjhunwala had taken blank signed cheques from him and Mr Jhunjhunwala also deposited the cheques in these accounts. Mr. Meattle during his statement is stated to have informed the Revenue that the cheques were filled in by Mr Jhunjhunwala and the amounts were withdrawn after the cheques were cleared, by Mr. Jhunjhunwala. According to Mr. Meattle, Mr. Jhunjhunwala had obtained signatures on some correspondence. According to Mr. Meattle, the entire operation was managed and handled by Jhunjhunwala. That apart, according to the Mr. Meattle he was not paid any Hawala charges as according to Mr. Jajodia, the MD of the assessee company he could not achieve the turnover of commission of Rs 1 crore. The non-payment of commission to Mr. Meattle, according to him led him to file a complaint with DDI (Inv.), Bombay, but on the petition from the assessee the case was transferred to Delhi. In these background the Revenue felt that in this case the income has escaped assessment. This opinion of the Revenue as stated above and in the light of facts mentioned led to the invocation of the provisions of Section 147 of the IT Act and the reassessment proceedings were completed on 29th March, 1990 by making an addition to the income of the assessee of all these commission charges claimed to have been paid by them to these three companies in the three relevant yeaRs.
(3.) THE action of the AO in framing re-assessment u/s 147 of the IT Act were challenged in appeal before the CIT(A) where also the assessee lost.;