THE BOOK CENTRE LTD, MUMBAI V. ASST CIT 6(1), MUMBAI

CO 214/MUM/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0414 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 24-03-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 10-10-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: N PADMANABAN
• Keywords: Charitable institution
• Section: 69C; 147

Judgement Text

M/S THE BOOK CENTRE LTD ITA 4 5 84 /M/20 1 2 CROSS OBJECTION 214/M/2014 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI , . . , BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N K BILLAIYA , ACCOUNTANT MEMBER ITA NO. : 4 5 84 /MUM/20 1 2 (ASSESSMENT YEAR: 200 6 - 0 7 ) DEPUTY COMMISSIONER OF INCOME TAX CIR 6(1) , ROOM NO. 506, 5 TH FLOOR, AAYK AR BHAVAN, M K ROAD, MUMBAI - 400 0 20 VS M/S THE BOOK CENTRE LTD, LIC BUILDING, 1 ST FLOOR, RANADE ROD, DADAR (W EST), MUMBAI - 400 028 .: PAN: AA ACT 3729 L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N PADMANABAN RESPONDENT BY : SHRI N ISHIT GANDHI CROSS OBJECTION NO. 214/MUM /2014 ARISING OUT OF ITA NO. : 4584/MUM/2012 , AY 2006 - 07 M/S THE BOOK CENTRE LTD, LIC BUILDING, 1 ST FLOOR, RANADE ROD, DADAR (WEST), MUMBAI - 400 028 VS DEPUTY COMMISSIONER OF INCOME TAX CIR 6(1), MUMBAI - 400 020 CROSS OBJECTOR (RESPONDENT) APPELLANT CROSS OBJECTOR BY : SHRI NISHIT GANDHI RESPONDENT BY : SHRI N PADMANABAN /DATE OF HEARING : 2 4 - 03 - 201 5 / DATE OF PRONOUNCEMENT : 24 - 03 - 201 5 ORDER . . , : PER N K BILLAIYA , A M : TH E S E ARE APPEALS BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE PREFERRED AGAINST VERY SAME ORDER OF THE CIT(A) - 14, MUMBAI, DATED 24.04.2012 PERTAINING TO AY 2006 - 07. 2. THE SOLE GRIEVANCE OF T HE REVENUE IS THAT THE CIT(A) ERRED IN DELETING THE ADDITION OF RS. 30 LAKHS ON ACCOUNT OF DONATION TO SUNDERDEEP EDUCATION SOCIETY AND RS. 10 LAKHS TO MOGADEVI MINDA CHARITABLE TRUST. M/S THE BOOK CENTRE LTD ITA 4 5 84 /M/20 1 2 CROSS OBJECTION 214/M/2014 2 3. BRIEFLY STATED THE FACT OF THE CASE ARE THAT THE RETURN FILED ON 27 .11.2006 DECLARING TOTAL INCOME AT RS. 11,87,697/ - WHICH WAS PROCESSED AND ACCEPTED U/S 143(1) OF THE ACT ON 24.03.2008. SUBSEQUENTLY , THE AO RECEIVED AN INFORMATION FROM ADDITIONAL CIT RANGE - 2 GAZI A BAD STATING THAT THE ASSESSEE HAS PAID DONATION OF RS. 3 0 LAKHS TO SUNDERDEEP EDUCATION SOCIETY . IT WAS FURTHER FOUND THAT THE ASSESSEE HAS ADVANCED AN AMOUNT OF RS. 10 LAKHS TO MOGA D EVI MINDA CHARITABLE TRUST , BOTH THESE AMOUNTS WERE NOT FOUND IN P&L ACCOUNT, HENCE , THE CASE OF THE ASSESSEE WAS REOPENED U/S 1 47 OF THE ACT FOR VERIFICATION . THE ASSESSEE WAS ASKED TO EXPLAIN THESE TRANSACTIONS. IT WAS EXPLAINED BY THE ASSESSEE THAT THE DONATION OF RS. 30 LAKHS PAID TO SUNDERDEEP EDUCATION SOCIETY HAS B EEN DEBITED TO ADVANCE ACCOUNT IN THE BALANCE SHEET. SIMILARL Y, RS. 10 LAKHS HAVE ALSO BEEN SHOWN UNDER THE HEAD LOANS AND ADVANCES IN THE BALANCE SHEET. THE ASSESSEE FILED RELATED DETAILS AND THE BANK STATEMENTS TO SUBSTANTIATE ITS CLAIM. THE AO OBSERVED THAT THERE APPEARS TO BE NO CO - RELATIONS WITH THE BANK STATEME NT OF THE ASSESSEE, HDFC LET T ER OF CONFIRMATION AND DONATION RECEIVED. THE AO FORMED A BELIEF THAT THE ASSESSEE HAS ADVANCED MONEY TO THE TUNE OF RS. 40 LAKHS FROM UNKNOWN SOURCE S FOR WHICH IT HAS OFFERED N O EXPLANATION. INVOKING THE PROVISIONS OF SECTION 69C OF THE ACT THE AO MADE THE ADDITION OF RS. 40 LAKHS. 4. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) AND REITERATED ITS CLAIM ONCE AGAIN FILING THE DETAILS IN RESPECT OF BANK ACCOUNT AND CONFIRMATION FROM THE BANK. 5. AFTER CO NSIDERING THE FACTS AND SUBMISSIONS AND AFTER DULY VERIFYING THE ENTRIES FROM THE BANK STATEMENTS, THE CIT(A) DELETED THE ADDITION OF RS. 40 LAKHS. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. 6. THE DR STRONGLY SUPPORTED THE FINDINGS OF THE AO, PER CONTR A, THE COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN M/S THE BOOK CENTRE LTD ITA 4 5 84 /M/20 1 2 CROSS OBJECTION 214/M/2014 3 SUBMITTED BEFORE THE LOWER AUTHORITIES. THE COUNSEL ALSO REFERRED TO THE RELEVANT DOCUMENTS PLACED IN THE PAPER BOOK. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ACCORDINGLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE ENTIRE DISPUTE REVOLVES AROUND WHETHER THE ASSESSEE HAS PAID RS. 40 LAKHS I.E. RS. 30 LACS TO SUNDERDEEP EDUCATION SOCIETY AND RS. 10 LAKHS TO MOGA D EVI MINDA CHARITABLE TRUST AND WHETHER THESE TRANSACTIONS ARE DULY REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE TO AVOI D R I GO R S OF THE PROVISIONS OF SECTION 69C OF THE ACT. 8. A PERUSAL OF THE BANK STATEMENT WITH HDFC BANK CLEARLY SHOW S THE ENTRIES OF PURCHASE OF DEMAND DRAFT, THE TRANSACTIONS ARE ALSO CONFIRMED BY HDFC BANK. LET US CONSIDER THESE FACTS IN THE LIGHT O F PROVISIONS OF SECTION 69C, WHICH SAYS THAT WHERE IN ANY FINANCIAL YEAR THE ASSESSEE HAS INCURRED ANY EXPENDITURE FOR WHICH HE OFFERS ANY EXPLANATION OR THE EXPLANATION OFFERED BY HIM IS NOT SATISFACTORY SUCH AMOUNT MAY BE TREATED AS INCOME OF THE ASSESSE E . 9. IN THE CASE IN HAND, IT CANNOT BE SAID THAT THE ASSESSEE HAS OFFERED NO EXPLANATION. ALL THAT WE HAVE TO SEE IS WHETHER THE EXPLANATION OF THE ASSESSEE IS SATISFACTORY IN THE EYES OF THE LAW. WE FIND THAT THE EXPLANATION OF THE ASSESSEE IS SUPPORT ED BY THE BANK STATEMENT WHEREIN THE ENTRIES ARE REFLECTED . W E FIND THAT THE EXPLANATION OF THE ASSESSEE IS ALSO SUPPORTED BY THE BANK CONFIRMATION LETTER . W E ALSO FIND THE ENTRIES DULY REFLECTED IN THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR UNDER CONS IDERATION. THEREFORE, IT CANNOT BE SAID THAT THE EXPLANATION OF THE ASSESSEE IS NOT SATISFACTORY. IN OUR CONSIDERED OPINION, THE CIT(A) HAS RIGHTLY DELETED THE ADDITIONS , WE THEREFORE D O NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A). 10. A PPEAL FILED BY THE REVENUE STANDS DISMISSED. 11. WITH ITS CROSS OBJECTION, THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE ASSESSMENT UNDERTAKEN U/S 147 OF THE ACT, ALTHOUGH M/S THE BOOK CENTRE LTD ITA 4 5 84 /M/20 1 2 CROSS OBJECTION 214/M/2014 4 THE CROSS OBJECTION IS LATE BY 442 DAYS, SINCE WE HAVE DELETED THE ADDITIONS AND DISMISSED REVENUES APPEAL, ISSUES RAISED BY THE ASSESSEE BY ITS CROSS OBJECTIONS ARE ONLY ON ACADEMIC INTEREST. 12. IN THE RESULT, APPEAL BY THE REVENUE IS DISMISSED AND CROSS OBJECTION S OF THE ASSESSEE IS TREATED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH MARCH, 2015 . SD/ - SD/ - ( ) ( . . ) ( VIJAY PAL RAO ) ( N K BILLAIYA ) JUDICIAL MEMBER ACCOUNTANT MEMB ER MUMBAI, DATE: 24 TH MARCH, 2015 / COPY TO: - 1) / THE APPELLANT. 2) / THE RESPONDENT. 3) THE CIT (A) - 14 , MUMBAI. 4) THE CIT - 6 , MUMBAI. 5) , , / THE D.R. B BENCH, MUMBAI. 6) COPY TO GUARD FILE. / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS