CHAMPALAL S. SHAH, MUMBAI V. ITO 16(2)(3), MUMBAI

ITA 1150/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9142 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 03-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 20-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Keywords: Unexplained cash credit; Unexplained investment; Opportunity of being heard
• Section: 68; 69

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C MUMBAI BEFORE HONBLE S/SHRI JOGINDER SINGH (JM), AND RAJESH KUMAR, ( AM ) I.T.A. NO. 1150 AND 1151 /MUM/201 4 ( / ASSESSMENT YEA RS : 200 7 - 08 AND 200 8 - 09 ) C HAMPALAL S SHAH, A/8, MAULANA SHAUKAT ALI RD., GRANT ROAD (E), MUMBAI - 400007 / VS. INCOME TAX OFFICER 16(2)(3), PRATYAKSH KAR BHAVAN, MATRU MANDIR - MUMBAI - 400007 / ASSESSEE BY : SHRI RUSHABH MEHTA / RE VENUE BY : SHRI RAJAT MITTAL / DATE OF HEARING : 4 .7.2017 / DATE OF PRONOUNCEMENT : 3. 10.2017 / O R D E R PER RAJESH KUMAR, A. M: THESE APPEALS ARE DIRECTED AGAINST THE ORDER OF LD.CIT(A), MUMBAI, PASSED ON 5.12.2013 AND 24.12.2013 FOR THE ASSESSMENT YEARS 2007 - 08 AND 2008 - 09 RESPECTIVELY. SINCE, THE APPEAL S PERTAIN TO THE SAME ASSESSEE, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE CLUBBED TOGETHER, HEARD TOGETHER AND ARE BEING DISPOSE OFF BY THIS COMMON ORDER. 2 I.T.A. NO. 1150 AND 1151 /MUM/201 4 2. GROUNDS OF APPEAL TAKEN BY THE ASSESSEE IN BOTH THE APPEALS ARE COMMON EXCEPT THE FIGURES. THEREFORE, FOR THE SAKE OF CONVENIENCE WE REPRODUCE GROUNDS OF APPEAL TAKEN IN ASSESSMENT YEAR 2007 - 08 AS UNDER : I. THE LEARNED COMMISSIONER OF INCOM E TAX (APPEALS) [HEREINAFTER REFERRED AS THE CIT (A) ] ERRED IN CONFIRMING THE ADDITION BEING THE DIFFERENCE CLOSING STOCK OF RS.59,14, 000 / - AS UNEXPLAINED INVESTMENT OF THE ASSESS UNDER SECTION 69 OF THE INCOME TAX ACT, 1961 [HEREINAFTER REFERRED TO THE ' ACT'] II. THE LEARNED CIT (A) ] ERRED IN CONFIRMING THE ADDITION OF RS. 1,95,69,39 5/ - UNVERIFIABLE CREDITORS AS UNEXPLAINED CASH CREDITS OF THE ASSESSEE, UN SECTION 68 OF THE ACT. ILL. THE LEARNED CIT(A)]ERRED IN CONFIRMING THE ADDITION OF RS.11, 00 , 0 00 / - TREATING THE UNSECURED LOANS AS UNEXPLAINED CASH CREDITS OF THE ASSESS UNDER SECTION 68 OF THE ACT. 3 . THE ISSUE RAISED IN GROUNDS OF APPEAL NO.1 IS AGAINST THE ADDITION OF RS. 59,14,000/ - AS UNEXPLAINED INVESTMENT AND THE ISSUE RAISED IN GROUNDS OF APPEAL NO.2 IS AGAINST THE CONFIRMATION OF RS.1,95,69,395/ - ON ACCOUNT OF UNVERIFIABLE CREDITORS AND THE ISSUE RAISED IN GROUNDS NO.3 IS IN RESPECT OF ADDITION OF RS.11,00,000/ - TREATING THE SAME AS UNSECURED LOANS AS UNEXPLAINED CASH CREDIT. 4 . AT THE O UTSET, THE LD.AR DRAW OUR ATTENTION TO THE APPLICATION DATED 3.7.2017 FOR FILING THE ADDITIONAL GROUNDS OF APPEAL WHICH READS AS UNDER : 1. WITHOUT PREJUDICE TO ORIGINAL GROUNDS RAISED, ON THE FACTS AND CIRCUMSTANCES OF THE CASE; THE LEARNED CIT(A) OUGHT TO HAVE ESTIMATED ONLY REASONABLE PERCENTAGE OF COMMISSION ON SALES HAVING TREATED THE APPELLANT AS A SUSPICIOUS DEALER ENGAGED IN ISSUING BILLS WITHOUT ANY 3 I.T.A. NO. 1150 AND 1151 /MUM/201 4 DELIVERY OF GOODS COUPLED WITH THE FACTS THAT BOOKS OF ACCOUNTS WERE NOT PRODU CED, INSTEAD OF M AKING SEPARATE ADDITIONS ON VARIOUS ISSUES . 5 . WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF RIVAL PARTIES AND PERUSED THE ORDERS OF LOWER AUTHORITIES . WE HAVE ALSO GONE THROUGH THE ADDITIONAL GROUND RAISED BY THE ASSESSEE. THE ASSESSEE HAS ISSUE RAISED IN THE ADDITIONAL GROUND OF APPEAL THAT THE REASONABLE PERCENTAGES OF COMMISSION ON SALES SHOULD BE APPLIED AS THE ASSESSEE IS A SUSPICIOUS HAWALA DEALER ENGAGED IN ISSUING BILLS WITHOUT ACTUALLY DELIVERY OF GOODS IN PHYSICAL FORMS. TO CORROBOR ATE THE AVERMENT THE LD.AR PLACED BEFORE US A COPY OF SALES TAX ORDER WHICH STATES THAT THE ASSESSEE TO BE HAWALA DEALER. AFTER PERUSING THE RECORDS AND THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE ISSUE HAS NEVER BEEN TAKEN UP BEFORE THE LOWER AUTHORITIES. IN THE PRESENT FACTS AND CIRCUMSTANCES OF THE CASE AND AFTER EXAMINATION OF ORDER OF SALES TAX DEPARTMENT FURNISHED BY THE ASSESSEE DURING THE COURSE OF HEARING, WHEREIN IT HAS BEEN MENTIONED THAT M/S MAHIMA INCORPORATION REGISTERED UNDER C ST ACT, 1956 BEARING NUMBER TIN 27970531217C HAS BEEN CANCELLED ABINITIO W.E.F.8.5.2006. UNDER THESE FACTS DEN O V O AND CIRCUMSTANCES, WE FEEL THAT THE ENDS OF JUSTICE WOULD BE MET, IF THE MATTER IS RESTORED BACK TO THE FILE OF THE AO FOR EXAMINATION ALL THESE FACTS AND THEN DECIDE THE CASE OF THE ASSESSEE DENOVO AS PER THE FACTS AND LAW. ACCORDINGLY, WE ADMIT THE ADDITIONAL GROUND RAISED BY THE ASSESSEE AND RESTORE THE MATTER TO THE FILE OF THE AO TO FRAME THE ASSESSMENT AFTER CONSIDERING THE FACTS AND 4 I.T.A. NO. 1150 AND 1151 /MUM/201 4 CIRC UMSTANCES OF THE CASE DENOVO AND AFTER PROVIDING NECESSARY OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6 . IN THE RESULT, THE APPEAL S OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD OCT , 2017 . SD SD (JOGINDER SINGH ) ( RAJESH KUMAR ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 03. 10. 2017 SR.PS:SRL: / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT( A) 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, T RUE COPY / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI