MAHESH RAMESHWAR MISTRY, MUMBAI V. ITO WARD 25(30), MUMBAI

ITA 1191/MUM/2023

AI Insights

The case involves Mahesh Rameshwar Mistry, the appellant, who appealed against the order of the Commissioner of Income Tax (Appeals) confirming an addition of Rs. 96,000 to his income as unexplained expenditure. The addition was based on an alleged cash loan of Rs. 58,00,000 taken from M/s Evergreen Enterprises, which was not recorded in the appellant's books. The Assessing Officer (AO) reopened the case based on information from a search operation under section 132 of the Act at M/s Evergreen Enterprises, but did not make any addition regarding the alleged loan itself. Instead, the AO added Rs. 96,000, being 12% of the alleged loan amount, as unexplained expenditure under section 69C of the Act. The Tribunal, referencing the decision in CIT-5 Mumbai vs. Jet Airways (I) Ltd., found the addition to be invalid due to the lack of a fresh notice under section 148 for assessing other income.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 124535 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 16-07-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 10-04-2023
• Other Referred Cases: CIT-5 Mumbai vs. Jet Airways (I) Ltd.
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAGANATH B. PASALE LD
• Section: 148; 132; 69C; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “ SMC ” BENCH, MUMBAI BEFORE SHRI B R BASKARAN , AM & SHRI N. K. CHOUDHRY, JM I.T.A. No. 1191/Mum/2023 Assessment Year: 2012-13 Mahesh Rameshwar Mistry 14, Vishwakarma, 6 th Ram Mandir Road, Vile Parle (E), Mumbai- 400054 PAN No. AAFPM4510Q Vs. Income Tax Officer, Word 25(3)(1) R. No. 233, Kautilya Bhavan, G Block, BKC, Bandra (E), Mumbai- 400051 Appellant) : Respondent) Appellant by : Shri. Vinod Bindal & Satish Gupta, Ld. CAs Respondent by : Shri. Naganath B. Pasale Ld. Sr.DR Date of Hearing : 17.07.2023 Date of pronouncement : 27.07.2023 O R D E R Per N. K. Choudhry, JM: The Assessee/Appellant herein has preferred this appeal against the order dated 03.03.2023 impugned herein, passed by the Ld. Commissioner of Income Tax (Appeal)/NFAC {in short ‘Ld. Commissioner)’} u/s 250 of the Income Tax Act 1961 (in short ‘the Act’) for the AY 2012-13. ITA No. 1191/M/2023 M/s Mahesh Rameshwar Mistry 2 2. In this case, the case of the Assessee was reopened by recording reasons for re-opening dated 05.07.2019, mainly on the reason that as per information received from the Deputy Directorate of Income Tax (inv) (1) unit-5(4) Mumbai dated 19.03.2019 to the effect that DGIT investigation Mumbai, on the basis of search action u/s 132 of the Act carried out in the case of M/s Evergreen enterprises that undisclosed activity on money lending and borrowing in unaccounted cash loan and interest thereon has arisen. As per the information received, the Assessee has borrowed cash loan of Rs. 58,00,000/- in FY 2011- 12. 3. In the Assessment order, the AO though has not made any addition on account of the alleged cash loan borrowed amounting to Rs. 58,00,000/- from M/s Evergreen enterprises/Mr. Nilesh Bharani, however, made the addition of Rs. 96,000/- i.e. 12% of Rs. 58,00,000/- the alleged loan borrowed, on the ground that no such expenditure was debited by Assessee in its books of account and consequently, added the same in the total income of the Assessee as unexplained expenditure u/s 69C of the Act. On appeal, the Ld. Commissioner more or less on the same reasoning, confirmed the said addition. 4. Admittedly, the case of the Assessee was reopened on the reason that the Assessee has taken cash loan of Rs. 58,00,000/- from Ms/ Evergreen Enterprises, however, no addition on that account has been made by the assessing officer but infact the AO assessed some other income without issuing any fresh notice u/s 148 of the Act, which was necessary for assessing other income, therefore in view of the dictum laid down by the Hon’ble High Court of Bombay in the case of CIT-5 Mumbai vs. Jet Airways (I) Ltd. (2010) 195 Taxmann 117 (Bom), We are inclined to delete the addition under consideration hence, the same is deleted. ITA No. 1191/M/2023 M/s Mahesh Rameshwar Mistry 3 5. In the result appeal filed by the assessee stands allowed. Orders pronounced in the open court on 27- 07-2023. Sd/- Sd/- (B R BASKARAN) (N. K. CHOUDHRY) Accountant Member Judicial Member Shubham P. Lohar Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai