M/S ANAGI TRADING PVT LTD., MUMBAI V. ITO 6(1)(2), MUMBAI

ITA 1211/MUM/2020

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 2897 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 18-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Source of fund
• Section: 69; 143(3); 142(1); 250; 143(2)

Judgement Text

1 Anagi Trading Pvt ltd ITA No.1211/MUM/2020 IN THE INCOME TAX APPELLATE TRIBUNAL, “A” BENCH MUMBAI BEFORE SHRI BASKARAN BR, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No.1211/MUM/2020 (A. Y.:2013-14) M/s. Anagi Trading Pvt. Ltd.B/8, Sarthak, Aarey Road, Goregaon East, Mumbai-400063 Vs. Income Tax Officer, 6(1)(2) Mumbai-400020 Pan No.AAJCA4557A Appellant Respondent Appellant by Mr.BhanuPratapSingh.AR Respondent by Mr. Manoj Sinha.DR Date of Hearing 22.09.2022 Date of Pronouncement 26.09.2022 ORDER PER PAVAN KUMAR GADALE, JM: The assesse has filed an appeal against the order of Commissioner of Income Tax Appeals(CIT(A))- 12 Mumbai passed under Section 250 of the Income Tax Act, 1961 (hereinafter in short “the Act”). The assesse has raised following grounds of appeal. 2 Anagi Trading Pvt ltd ITA No.1211/MUM/2020 1. On facts and circumstances of the case and in law, Ld. AO erred in making the addition u/s 69 of alleged Unexplained Investments of Rs.1,80,53,700/- 2) The Ld. AO, before making the addition of alleged unexplained investments of Rs.1,80,35,700/-, ought to have considered the understated vital facts, being: a) The appellant had made the payments out of accounted and disclosed source of funds; b) The investments are supported with documentary evidences such as registered sale deed, bank loan sanction letters, charge created before Registered of Companies and other documents; 3) Without prejudice, the addition of alleged unexplained investments could utmost be made to the extent of money paid during impugned year since substantial amount had been in subsequent year. 2. The brief facts of the case that the assesse company is engaged in business of trading of textiles and filed the return of income for the assessment year 2013-14 on 31.10.2013 disclosing a total income of Rs.3,79,917/-. Subsequently, the case was selected for scrutiny the notice under Section 143(2) and 142(1) of the Act was issued. In-compliance, the Ld.AR of the assesse appeared from time to time and submitted the details and the case was discussed. On perusal of the ITS details, the Assessing Officer (A.O.) found that the assesse has purchased immovable property and it was not disclosed before the Income Tax Department and a show cause notice was issued. Whereas, the assesse has filed the explanations referred at Paragraph 5.3 of the order. Subsequently, the A.O. has issued notice under Section 3 Anagi Trading Pvt ltd ITA No.1211/MUM/2020 133(6) of the Act on sub-registrar Phaltan District- Satara, Maharashtra to verify the purchase of the property. On perusal of the information and the property details, the AO has called for the sources of purchase of the property. The A.O. found the explanations filed by the assesse are not properly supported with evidences and the assesse could not explain the sources and the A.O. has made an addition of Rs.1,80,53,700/- as unexplained investment and assessed the total income of Rs.1,84,33,617/- and passed the order under Section 143(3) of the Act dated 13.03.2016. Aggrieved by the order, the assesse has filed an appeal with the CIT(A). 3. Aggrieved by the order, the assesssee has filed an appeal with the CIT(A). Whereas, CIT(A) considered the grounds of appeal, finding of the scrutiny assessment and since there was no compliance in respect of the notices, the CIT(A) has confirmed the action of the Assessing Officer in making disallowance and dismissed the assessee’s appeal. Aggrieved by the order CIT(A), the assessee has filed an appeal with the Honorable Tribunal. 4. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the additions. The assessee has a good case on merits and can substantiate with the material evidences and prayed for an opportunity before the lower authorities. Per Contra Learned DR submitted that the assessee has not filed the 4 Anagi Trading Pvt ltd ITA No.1211/MUM/2020 information before lower authorities and supported the order of the CIT(A). 5. We heard the rival submissions and perused the material on record. Prima-facie the CIT (A) has passed the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT (A) was of the opinion that the assesseee is not interested in prosecuting the appeal and dismissed the appeal ex- parte confirming the action of the assessing officer. We find the Ld. CIT(A) has issued the notices of hearing referred at page 3 Para 3 of the order, but there was no response and thus the Ld. CIT(A) came to a conclusion that the assesseee is not interested and decided the appeal based on the information available on record. We find that the assesseee has raised grounds of appeal challenging the addition of the assessing officer and there could be various reasons for non appearance which cannot be overruled. 6. We considering the principles of natural justice shall provide one more opportunity of hearing to the assesseee to substantiate the case before the CIT(A) along with evidences and information subject to the payment of cost of Rs.2000/- to the Income Tax Department within 30 days from date of receipt of order and produce the payment challan . Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the 5 Anagi Trading Pvt ltd ITA No.1211/MUM/2020 assesseee should cooperate in submitting the information for early disposal of the appeal and allow the grounds of appeal of the assesseee for statistical purpose. 7. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open court on the 26 th day of September 2022. Sd/- Sd/- (BASKARAN BR) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 26/09/2022 M. Sonavane Copy of the Order forwarded to: 1. The Appellant, 2. The Respondent 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// BY ORDER, (Dy./Asstt.Registrar)ITAT, Mumbai