QUALITY VMG BUS DEPOT PROJECT, MUMBAI V. ADDL CIT RG 15(2), MUMBAI

ITA 1280/MUM/2011

• Counselvise Citation: 128019914 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2007-2008
• Appeal Filed On: 11-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV JAIN
• Assessee Lawyers: AJAY R SINGH; DR K SHIVARAM
• Keywords: Additional evidence; Revised return
• Section: 143(3)

Judgement Text

, MH MHMH MH INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. , MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & DR. S.T.M . PAVALAN,JUDICIAL MEMBER /. ITA NO.1280/MUM/2011, ! ! ! ! / ASSESSMENT YEAR-2007-08 QUALITY VMG BUS DEPOT PROJECT, G-7 MALL CTS NO. 864, 7 BUNGLOW BUS DEPOT, J.P.ROAD, ANDHERI(W), MUMBAI-400063 VS ADDL.CIT 15(2) MATRU MANDIR, 1 ST FLOOR, TARDEO ROAD, MUMBAI-400007 PAN:AAAAQ0055A ( '# / APPELLANT) ( $%'# / RESPONDENT) &' ( ) / ASSESSEE BY :SHRI DR. K.SHIVARAM & SHRI AJAY R.SINGH ( ) / REVENUE BY : SHRI SANJEEV JAIN ( (( ( '+ '+ '+ '+ / DATE OF HEARING : 20-02-2014 ,-! ( '+ / DATE OF PRONOUNCEMENT : 12-03-2014 , 1961 ( (( ( 254 )1( '.' '.' '.' '.' / / / / ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDER DATED 28.12.2010 OF THE CIT(A )-26,MUMBAI,ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) (CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS 27,68,875/- AS BOGUS TRANSACTION WITHOUT APPR ECIATING THE FACT THAT THE PURCHASE OF GRANITE AND TILES MADE FROM M/S. SURBHI INTERNATIONAL WERE ACCOUNTED IN THE BOOKS OF ACCOUNTS AND SUPPORTED BY SUFFICIENT DOCUMENTARY EVIDENCE. 2.THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS 4,71,565/- AS BOGUS TRANSACTION MADE BY THE LEARNED ASSESSING OFFICER IN RESPECT OF THE AMOUNT PAID TO M/S.SAI RAJ ENTERPRISES TOWARDS LABOUR CHARGES & SUPPLY OF MATERIAL. 3.THE CIT(A) ERRED IN HOLDING THE PURCHASE OF TILES FROM M/S NEW SARAL CERAMICS AMOUNTING TO RS. 5,41,440/- AS BOGUS TRANSACTION WHICH PERTAINS TO A.Y.2008-09 INSTEAD OF A.Y.2007-08. 4.WITHOUT PREJUDICE TO THE ABOVE GROUNDS OF APPEAL, THE CIT (A) ERRED IN CONFIRMING THE ADDITIONS MADE ON THE ABOVE GROUND OF APPEALS WITHOUT APPRECI ATING THE METHOD OF ACCOUNTING FOLLOWED BY THE APPELLANT AND ACCORDINGLY FAILED TO APPRECIATE THE FACT THAT THE ADDITIONS ON THE ABOVE THREE GROUNDS (1 TO 3) SHOULD NOT HAVE BEEN MADE TO THE T OTAL INCOME BUT WOULD ONLY REDUCE THE COST FROM CLOSING WORK-IN-PROGRESS AND NOT AFFECT THE TO TAL INCOME OF THE APPELLANT FOR YEAR IN APPEAL. 5.THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND O R MODIFY ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEARING. 2. ASSESSEE,AN AOP,ENGAGED IN THE BUSINESS OF CONSTRUC TION,FILED ITS RETURN OF INCOME ON 31.10. 2007 DECLARING TOTAL INCOME OF RS.95,52,890/-.LATER ON A REVISED RETURN OF INCOME WAS FILED,ON 2 ITA NOS. 1280/MUM/2011 QUALITY VMG BUS DEPOT PROJECT 10.03.2009,DECLARING THE SAME INCOME.ASSESSING OFFI CER(AO),FINALISED THE ASSESSMENT ORDER U/S. 143(3) OF THE ACT,ON23.12.2009,DETERMINING THE TOTA L INCOME AT RS.1.33 CRORES. DURING THE ASSESSMENT PROCEEDINGS AO MADE ADDITIONS TO THE INCOME OF THE ASSESSEE OF RS.27.68 LAKHS,4.71 LAKHS AND 5.41 LAKHS ON ACCOUNT OF PURCH ASE OF GRANITE AND TILES MADE FROM M/S. SURBHI INTERNATIONAL,AMOUNT PAID TO M/S.SAI RAJ ENTERPRISE S TOWARDS LABOUR CHARGES & SUPPLY OF MATERIAL AND PURCHASE OF TILES FROM M/S NEW SARAL CERAMICS R ESPECTIVELY.IN THE APPELLATE PROCEEDINGS FAA CONFIRMED THE ORDER OF THE AO AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 3. DURING THE COURSE OF HEARING BEFORE US,AUTHORISED R EPRESENTATIVE(AR)SUBMITTED THAT ASSESSEE HAD FILED ADDITIONAL EVIDENCES AS PER THE PROVISION S OF RULE 29 OF THE ITAT RULES,1963.IT WAS SUBMITTED THAT FRESH EVIDENCES(PG.1 TO159)WERE FURN ISHED BEFORE THE TRIBUNAL FOR THE FIRST TIME, THAT SAME WERE NOT AVAILABLE TO THE ASSESSEE AT THE TIME OF ASSESSMENT/APPELLATE PROCEEDINGS,THAT SUCH DETAILS CAME IN POSSESSION OF THE ASSESSEE AFT ER THE ORDER OF THE FAA,THAT ASSESSEE HAD MADE APPLICATIONS UNDER THE RTI ACT AND HAD COLLECTED TH E FRESH EVIDENCES,THAT THE DOCUMENTS OBTAINED BY IT WERE DIRECTLY RELATED WITH ISSUES TO BE DECID ED BY THE TRIBUNAL,THAT THE SAID DOCUMENTS WERE PRODUCED IN THE PENALTY PROCEEDINGS AS WELL AS IN T HE ASSESSMENT PROCEEDINGS FOR SUBSEQUENT YEARS.AR RELIED ON THE RATIO LAID BY THE HONBLE BO MBAY HIGH COURT IN THE CASE OF SMT. PRABHAVATI SHAH(231ITR1)IN THIS REGARD.DEPARTMENTAL REPRESENTATIVE (DR) ARGUED THAT ADDITIONAL EVIDENCES FURNISHED BY THE ASSESSEE SHOULD NOT BE A DMITTED,THAT IT HAD NOT SHOWN SUFFICIENT REASON FOR NOT PRODUCING THEM BEFORE THE AO/FAA. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL BEFORE US.WE FIND THAT ALL THE DOCUMENTS,FURNISHED AS ADDITIONAL EVIDENCES,WERE OB TAINED BY THE ASSESSEE AFTER THE ORDER OF THE FAA,THAT IT HAD MADE INQUIRIES UNDER THE RTI ACT FR OM THE BANKS AND OBTAINED SUCH DOCUMENTS THAT COULD AFFECT THE OUTCOME OF THE APPEAL.RULE 29 OF THE ITAT RULES STIPULATES THAT IF APPELLANT CAN PROVE THAT IT WAS PREVENTED BY SUFFICIENT CAUSE FOR NOT PRODUCING SOME DOCUMENTS BEFORE THE AO OR THE FAA,TRIBUNAL MAY ALLOW IT TO PRODUCE THE SAME BEFORE IT.IN THE CASE OF TEXT HUNDRED INDIA PVT. LTD.,HONBLE DELHI HIGH COURT HAS HELD A S UNDER: ACCORDING TO THE LANGUAGE OF RULE 29 OF THE INCOME -TAX (APPELLATE TRIBUNAL) RULES,1963, PARTIES ARE NOT ENTITLED TO PRODUCE ADDITIONAL EVIDENCE. IT IS ONLY WHEN THE TRIBUNAL REQUIRES SUCH ADDITIONAL EVIDENCE IN THE FORM OF ANY DOCUMENT OR AFFIDAVIT OR EXAMINATION OF A WITNESS OR THROUGH A WITNESS THAT IT WOULD CALL FOR THE SAME O R DIRECT ANY AFFIDAVIT TO BE FILED, THAT TOO IN THE FOLLOWING CIRCUMSTANCES (I) WHEN THE TRIBUNAL FEELS THAT IT IS NECESSARY TO ENABLE IT TO PASS ORDERS; OR (II) ANY SUBSTANTIAL CAUSE ; OR (III) WHERE THE INCOME-TAX AUTHORITIES DID NOT PROVIDE SUFFICIENT OPPORTUNITY TO THE ASSESSEE TO ADDUCE EVIDENCE. HOW EVER, THE DISCRETION LIES WITH THE TRIBUNAL TO ADMIT ADDITIONAL EVIDENCE IN THE INTEREST OF JUSTIC E ONCE THE TRIBUNAL AFFIRMS THE OPINION THAT DOING SO WOULD BE NECESSARY FOR PROPER ADJUDICATION OF TH E MATTER. THIS CAN BE DONE EVEN WHEN AN APPLICATION IS FILED BY ONE OF THE PARTIES TO THE A PPEAL AND IT NEED NOT TO BE A SUO MOTU ACTION OF TH E TRIBUNAL. RULE 29 IS MADE ENABLING THE TRIBUNAL TO ADMIT THE ADDITIONAL EVIDENCE IN ITS DISCRETION IF THE TRIBUNAL HOLDS THE VIEW THAT SUCH ADDITIONAL EVIDENCE WOULD BE NECESSARY TO DO SUBSTANTIAL JUSTICE IN THE MATTER. ONCE IT IS FOUND THAT THE PA RTY INTENDING TO LEAD EVIDENCE BEFORE THE TRIBUNAL FOR THE FIRST TIME WAS PREVENTED BY SUFFICIENT CAUS E FROM LEADING SUCH AN EVIDENCE AND THAT THIS EVIDENCE WOULD HAVE A MATERIAL BEARING ON THE ISSUE WHICH NEEDS TO BE DECIDED BY THE TRIBUNAL AND THE ENDS OF JUSTICE DEMAND ADMISSION OF SUCH AN EVIDENCE, THE TRIBUNAL CAN PASS AN ORDER TO THAT EFFECT. WHEN ON EXAMINING THE EVIDENCE AS IT STANDS, SOME I NHERENT LACUNA OR DEFECT BECOMES APPARENT TO THE APPELLATE COURT COMING IN THE WAY OF ITS PRONOU NCING JUDGMENT, THE EXPRESSION 'TO ENABLE IT TO PRONOUNCE JUDGMENT' CAN BE INVOKED. REFERENCE IS NO T TO PRONOUNCING ANY JUDGMENT OR JUDGMENT 3 ITA NOS. 1280/MUM/2011 QUALITY VMG BUS DEPOT PROJECT IN A PARTICULAR WAY, BUT IS TO PRONOUNCING ITS JUDG MENT SATISFACTORILY TO THE MIND OF COURT DELIVERING IT. THE PROVISION DOES NOT APPLY WHERE W ITH EXISTING EVIDENCE ON RECORD THE APPELLATE COURT CAN PRONOUNCE A SATISFACTORY JUDGMENT. IT IS ALSO APPARENT THAT THE REQUIREMENT OF THE COURT TO ENABLE IT TO PRONOUNCE JUDGMENT CANNOT REFER TO PRONOUNCEMENT OF JUDGMENT IN ONE WAY OR THE OTHER BUT IS ONLY TO THE EXTENT WHETHER SATISFACTOR Y PRONOUNCEMENT OF JUDGMENT ON THE BASIS OF MATERIAL ON RECORD IS POSSIBLE.RULE 29 CATEGORICAL LY PERMITS THE TRIBUNAL TO ALLOW SUCH DOCUMENTS TO BE PRODUCED FOR ANY SUBSTANTIAL CAUSE. (351 ITR 57) WE FIND THAT THE DOCUMENTS FILED BY THE ASSESSEE AR E USEFUL TO DECIDE THE ISSUES RAISED BEFORE US,HENCE SAME ARE BEING ADMITTED AS ADDITIONAL EVID ENCE U.R.29 OF THE ITAT,RULES.AS THE AO/ FAA HAD NO OCCASION TO CONSIDER THESE DOCUMENTS,SO, IN THE INTEREST OF JUSTICE,WE ARE REMANDING BACK THE MATTER TO THE FILE OF THE AO FOR FRESH ADJ UDICATION.HE IS DIRECTED TO AFFORD A REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE AND TO CONS IDER THE DOCUMENTS SUBMITTED BEFORE US,BEFORE PASSING A SPEAKING AND REASONED ORDER.ASSESSEE IS D IRECTED TO EXTEND FULL COOPERATION TO THE AO. WITH THESE OBSERVATIONS GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. AS A RESULT,APPEAL FILED BY THE AS SESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. 0'1 &' 2 3 4( 567 8' ( ' 9:. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH,2014 . / ( ,-! < = 12 EKPZ EKPZ EKPZ EKPZ , 201 4 - ( . > SD/- SD/- ( MK MKMK MK0 00 0 ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU / DR. S.T.M.PAVALAN) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, = /DATE:12.03.2014. SK / / / / ( (( ( $'? $'? $'? $'? @?!' @?!' @?!' @?!' / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '# 2. RESPONDENT / $%'# 3. THE CONCERNED CIT(A)/ A B , 4. THE CONCERNED CIT / A B 5. DR D BENCH, ITAT, MUMBAI / ?C. $' M MM MH HH H , . . . 6. GUARD FILE/ . 0 %?' %?' %?' %?' $' $'$' $' //TRUE COPY// / / BY ORDER, 5 / 9 DY./ASST. REGISTRAR , /ITAT, MUMBAI