MORPARIA & RANKA CONSTRUCTION CO, MUMBAI V. ITO 17(2)(3), MUMBAI

CO 03/MUM/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 0922 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 24 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 28-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Assessment Year: 2006-2007
• Appeal Filed On: 04-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D G
• Keywords: Reopening of assessment; Set aside
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH D , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR , HON'BLE ACCOUNTANT MEMBER IT A. NO. 2623 /MUM/201 7 (A.Y: 2006 - 07) INCOME TAX OFFICER - 17 ( 2)(3 ) ROOM NO. 123B/G AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400 020 V. M/S MORPARIA & RANKA CONSTRUCTION CO. 150, SWAMI VIVEKANAND ROAD NEAR AMBAR OSCAR CINEMA ANDHERI (W), MUMBAI 400 058 PAN: AABFM0391D (APPELLANT) (RESPONDENT) C .O. NO. 3/MUM/2019 [ARISING OUT OF ITA.NO.2623/MUM/2017 (A.Y: 2006 - 07)] M/S MORPARIA & RANKA CONSTRUCTION CO. 150, SWAMI VIVEKANAND ROAD NEAR AMBAR OSCAR CINEMA ANDHERI (W), MUMBAI 400 058 PAN: AABFM0391D V. INCOME TAX OFFICER - 17(2)(3) ROOM NO. 123B/G AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI HIRO RAI DEPARTMENT BY : SHRI D.G. PANSARI DATE OF HEARING : 11.06.2019 DATE OF PRONOUNCEMENT : 28 .08 .2019 2 ITA.NO.2623/MUM/2017 (A.Y: 2006 - 07) C.O. NO. 3/MUM/2019 M/S MORPARIA & RANKA CONSTRUCTION CO. O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL AND CROSS OBJECTION ARE FILED BY THE REVENUE AND ASSESSEE RESPECTIVELY AGAINST THE ORDER OF THE LEARNED COMMI SSIONER OF INCOME TAX (APPEALS) - 51, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 19.01.2017 FOR THE A.Y. 2006 - 07. 2. THE REVENUE IN ITS APPEAL HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DIRECTING TO DELETE THE ADDITION OF RS. 1,38,42,000/ - ON ACCOUNT OF PAYMENT TO THE PARTNERS OF THE FIRM FOR REPURCHASE OF TENANCY RIGHTS WITHOUT APPRECIATING THE FACTS THAT - (I) DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT SUBMIT ANY DETAILS IN SUPPORT OF ITS CLAIM, I.E., HOW THE TENANCY RIGHTS WERE ACQUIRED, ANY PROOF OF PAYMENT OF ELECTR ICITY/MUNICIPAL TAXES/TELEPHONE BILLS/RENT RECEIPT/BILL OR ANY CORRESPONDENCE RECEIVED ON THE TENANTED ADDRESS, PROOF OF POSSESSION OF THE FLATS. THE ASSESSEE FAILED TO PROVIDE ANY DOCUMENTARY EVIDENCES, WHICH COULD PROVE THE OWNE RSHIP OF THE FLATS REPURCH ASED. (II) THE AGREEMENTS ENTERED INTO WITH THE PARTNER TENANTS WERE NOT REGISTERED WITH THE STAMP DUTY AUTHORITY, WHEREBY THE AUTHENTICITY OF THE DOCUMENTS REMAINED UNPROVED. (III) IN THE ABSENCE OF PERTINENT DOCUMENTARY EVIDENCES, THE GENUINENESS AND BUSINESS EXPED IENCY OF THE EXPENDITURE HAS NOT BEEN ESTABLISHED AS MANDATED BY THE HON'BLE APEX COURT IN THE DECISIONS OF CIT VS. INDIAN MOLASSES CO. (P.) LTD., 78 ITR 474 AND J.K.COTTON MFRS. LTD., 101 ITR 227.' 2 . 'THE APPELLANT PRAYS THAT THE ORDER OF THE A.O. SHOULD BE RESTORED AND ORDER OF THE LD. CIT(A) SHOULD BE SET ASIDE.' 3. 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 3. IN THE CROSS OBJECTION, ASSESSEE HAS CHALLENGED THE ORDER OF THE LD.CIT(A) IN NOT ADJUDI CATING THE GROUND NOS. 2, 3, 4 AND ALSO ADDITIONAL 3 ITA.NO.2623/MUM/2017 (A.Y: 2006 - 07) C.O. NO. 3/MUM/2019 M/S MORPARIA & RANKA CONSTRUCTION CO. GROUND RAISED BY THE ASSESSEE BEFORE THE LD.CIT(A) IN RESPE CT OF REOPENING OF ASSESSMENT. 4. AT THE OUTSET , LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE LD.CIT(A) THOUGH DECIDED THE ISSUE ON MERITS HAS NOT ADJUDICATED THE GROUND RAISED BY THE ASSESSEE IN CHALLENG ING THE REOPENING OF ASSESSMENT, T HEREFORE THE MATTER MAY BE RESTORED TO THE FILE OF THE LD.CIT(A). LD. COUNSEL FOR THE ASSESSEE ALSO PLACED RELIANCE ON THE DECISION OF THE COORDINATE BENCH IN THE C ASE OF ITO V. M/S. MOHANRAJ TRADING & EXCHANGE PVT. LTD., IN ITA.NO. 6098 /MUM/2016 & CO.NO. 63/ MUM/2018 DATED 02.07.2018 AND PLEADED THAT THE MATTER MAY BE RESTORED TO THE FILE OF THE LD.CIT(A) FOR ADJU DI CATING ON TECHNICAL GROUNDS. 5. LD. DR HAS NO SERIOUS OB JECTION IN REMITTING THE MATTER BACK TO THE FILE OF THE LD.CIT(A) FOR ADJUDICATION ON THE TECHNICAL GROUND . 6. WE HAVE HEARD THE SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. ON HEARING BOTH THE PARTIES AND PERUSING THE ORDERS OF T HE AUTHORITIES BELOW, WE FIND THAT THE LD.CIT(A) DID NOT DISPOSE OFF THE GROUND S RAISED IN CHALLENGING THE REOPENING OF ASSESSMENT U/S. 148 OF THE ACT, HOWEVER HE HAS GONE INTO THE MERITS OF THE ADDITION/DISALLOWANCE MADE BY THE ASSESSING OFFICER. THOUGH THE LD.CIT(A) HAS DECIDED THE 4 ITA.NO.2623/MUM/2017 (A.Y: 2006 - 07) C.O. NO. 3/MUM/2019 M/S MORPARIA & RANKA CONSTRUCTION CO. GROUNDS ON MERITS IN FAVOUR OF THE ASSESSEE , HE DISPOSED OFF THE TECHNICAL GROUND S STATING THAT THESE GROUNDS OF APPEAL ARE NOT ADJUDICATED AND DISMISSED FOR STATISTICAL PURPOSE. 7. WE OBSERVE THAT THE TRIBUNAL IN THE CASE OF ITO V. M/S. MOHANRAJ TRADING & EXCHANGE PVT. LTD., (SUPRA) O N IDENTICAL SITUATION RESTORED THE MATTER TO THE FILE OF THE LD.CIT(A) FOR ADJUDICATIN G THE GROUND WHICH WERE CHALLENGED WHERE THE REOPENING OF ASSESSMENT ITSELF CHALLENGED . IN VIEW OF THE ABOVE , WE RE STORE THE CROSS OBJECTION OF THE ASSESSEE TO THE FILE OF THE LD.CIT(A) FOR ADJUDICATION ON GROUND RAISED ON REOPENING OF ASSESSMENT. SINCE THE OUTCOME OF THE GROUND RAISED BY THE ASSESSEE CHALLENGING THE REOPENING HAS BEARING ON THE OTHER GROUNDS , THE APP EAL OF THE REVENUE IS ALSO RESTORED TO THE FILE OF THE LD.CIT(A) WHO SHALL DECIDE IN ACCORDANCE WITH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY O F BEING HEARD TO THE ASSESSEE. 8. IN THE RESULT, CROSS OBJECTION OF THE ASSESSEE AND THE APPEAL OF THE REVENUE ARE A LLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 28 TH AUGUST , 2019 SD/ - SD/ - ( RAJESH KUMAR) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 28 / 0 8 / 2019 GIRIDHAR , S R. PS 5 ITA.NO.2623/MUM/2017 (A.Y: 2006 - 07) C.O. NO. 3/MUM/2019 M/S MORPARIA & RANKA CONSTRUCTION CO. COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM