ELEGANCE TABLEWARE, MUMBAI V. ITO WD 20(3)(1), MUMBAI

ITA 1376/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8149 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 06-03-2014
• Assessment Year: 1994-1995
• Appeal Filed On: 29-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Assessee Lawyers: V P KHOTHARI
• Keywords: Document seized; Opportunity of being heard; Reasonable cause; Documents seized
• Section: 132; 144

Judgement Text

, , INCOME TAX APPELLATE TRIBUNAL,MUMBAI - E BENCH. . . , , BEFORE S/SH.I.P.BANSAL, JUDICIAL MEMBER & RAJE NDRA,ACCOUNTANT MEMBER /. ITA NO.1376/MUM/2012, ! ! ! ! / ASSESSMENT YEAR-1994-95 M/S ELEGANCE TABLEWARE 2, SANJAY MITTAL INDUSTRIAL ESTATE, ANDHERI-KURLA ROAD, ANDHERI (E) MUMBAI-400059. ' ' ' ' . . . /PAN:AAAFE5630N V/S. ITO WARD 20(3)(1), MUMBAI. ( '# / APPELLANT) ( $%'# / RESPONDENT) &' &' &' &' ( ( ( ( / ASSESSEE BY : SHRI V.P.KHOTHARI ) ( / REVENUE BY : SHRI VIJAY KUMAR BORA ) )) ) '* '* '* '* / DATE OF HEARING : 18-09-2014 +,! ) '* / DATE OF PRONOUNCEMENT : 26-09-2014 , 1961 ) )) ) 254 )1 ( '-' '-' '-' '-' . . . . ORDER U/S..254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDER DATED 03.08.2011 OF THE CIT(A )-31, MUMBAI THE ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL: 1.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ORDER OF ASSESSING OFFICER IN RESPECT OF THE D ISALLOWANCE OF LABOUR CHARGES OF RS. 1,48,630/- PAID TO MR. SHASHI B. MORE WITHOUT PROPERLY CONSIDE RING THE FACTS THAT THE AFFIDAVIT FILED BY OTHER CO-WORKERS HAVE CONFIRMED THAT MR. SHASHI B. MORE W AS WORKING WITH THE APPELLANT DURING THE MATERIAL PERIOD. 2. THE APPELLANT RESPECTFULLY SUBMIT THAT MR. SHASH I B. MORE WAS WORKING WITH THE APPELLANT AND PAYMENTS HAVE BEEN MADE FOR THE WORK DONE BY HIM AN D HIS TEAM FOR APPELLANT. 3. THE APPELLANT PRAYS TO CONDONE THE DELAY IN FILI NG OF APPEAL BY 110 DAYS BEFORE THE HON'BLE ITAT AND REQUEST TO KINDLY ADMIT THE APPEAL. YOUR APPELLANTS CRAVES, LEAVE TO ADD, ALTER AND / O R AMEND THE ABOVE GROUNDS OF APPEAL. BEFORE US,THE AUTHORISED REPRESENTATIVE STATED THAT THE APPEAL COULD NOT BE FILED WITHIN THE PRESCRIBED TIME LIMIT,THAT THERE WAS REASONABLE CAU SE FOR FAILURE,THAT THE ASSESSEE WAS DISPUTE AMONG THE PARTNERS AND THE FAMILY MEMBERS DURING TH E PERIOD UNDER CONSIDERATION.WE ARE OF THE OPINION THAT DELAY IN FILING THE APPEAL SHOULD BE C ONDONED AS THE ASSESSEE WAS PREVENTED BY REASONABLE CAUSE FOR NOT FILING THE APPEAL IN TIME. 2. ASSESSEE-FIRM,ENGAGED IN THE BUSINESS OF MANUFACTUR ING OF TABLEWARE AND CUTLERY GOODS, FILED ITS RETURN OF INCOME ON 31.10.1994,DECLARING TOTAL INCO ME AT RS. 51,795/-.AN ACTION U/S. 132 OF THE ACT WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 16.11.1994.ORIGINAL ASSESSMENT IN THIS CASE WAS COMPLETED U/S. 144 OF THE ACT ON 27.03.1997. FI RST APPELLATE AUTHORITY (FAA) SET ASIDE THE ASSESSMENT ORDER AND THE ASSESSING OFFICER(AO)COMPL ETED THE REASSESSMENT ON 31.01.2000. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA AND MAT TER WENT UP THE TRIBUNAL. VIDE ITS ORDER DATED 25.06.2008 THE TRIBUNAL SET-ASIDE THE ISSUE O F LABOUR CHARGES OF RS. 9,35,718/- TO THE FILE OF THE AO FOR FRESH ADJUDICATION. DURING THE COURSE OF SCRUTINY PROCEEDINGS, THE PARTNER WAS ASKED TO 2 ITA NO. 1376/MUM/2012 ELEGANCE TABLEWARE PRODUCE THE PARTIES FOR VERIFICATION OF THE ISSUE O F LABOUR CHARGES PAID TO THEM. THE DETAILS I.E. NAMES OF PARTIES AND AMOUNT OF LABOUR CHARGES WERE AS UNDER: 1. MANOHAR BUFFING RS. 65,112/- 2. NARAYAN SAMBHAJI RS. 1,47,390/- 3. ANWAR HUSSAIN RS. 14,888/- 4. SHASHI B. MORE RS. 1,48,630/- 5. RAJU KHAN RS. 139,695/- 6. KRUPA ENTERPRISES RS. 1,41,192/- 7. SALIM KHAN RS. 1,32,627/- 8. TASLEEM BUFFING RS. 1,40,184/- 9. IQBAL BHAI RS. 6,000/- IN RESPONSE, THE ASSESSEE SUBMITTED AFFIDAVITS OF S HRI RAJU KHAN AND SHRI NARAYAN SAMBHAJI AND ALSO PRODUCE SHRI RAJU KHAN.IT WAS FURTHER STATED B Y THE ASSESSEE THAT IT WAS DIFFICULT TO FIND PERSONS WHO HAVE WORKED ABOVE 15 YEARS WITH IT, THA T THE ASSESSEE HAS STOPPED ITS BUSINESS BEFORE 9 YEARS.AFTER CONSIDERING THE SUBMISSION AND EXPLAN ATION OF THE ASSESSEE,THE AO HELD THAT ALL THE AFORESAID PARTIES WERE INVOLVED IN BUSINESS IN AY.1 995-96, THAT THE THEN AO HAD ACCEPTED THE LABOUR CHARGES PAYMENTS MADE TO THEM EXCEPT ONE SHA SHI B. MORE,THAT AN AMOUNT OF RS. 1.48 LAKHS RELATED TO SHASHI B. MORE WAS DISALLOWED FOR WANT OF PROOF/ DOCUMENTARY EVIDENCES. FINALLY,THE AO DETERMINED THE INCOME OF THE ASSESSE E-FIRM AT RS. 5.71 LAKHS. 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FAA. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER, THE FAA HELD THAT THE MATTER WAS SET ASIDE BY THE ITAT IN VIEW OF THE FAC T THAT PROPER OPPORTUNITY OF BEING HEARD WAS NOT GRANTED TO THE ASSESSEE,THAT THE AO HAD DULY TAKEN INTO CONSIDERATION THE RELEVANT DIRECTIONS OF THE ITAT.HE DIRECTED THE AO TO VERIFY THE CLAIM OF THE ASSESSEE MADE ABOUT TWO PARTIES NAMELY RAJU KHAN AND NARAYANAN SAMBHAJI.AS PER THE FAA THE AO HIMSELF HAD ADMITTED,WHILE COMPLETING THE ASSESSMENT FOR THE AY.1995-96,THAT P AYMENT TO THOSE TWO PERSONS WAS GENUINE. HE FURTHER DIRECTED THE AO TO VERIFY THE CLAIM BY W AY OF SCRUTINISING THE SEIZED DOCUMENTS. ABOUT THE DISALLOWANCE MADE ON ACCOUNT OF SURESH KANDIVAL I AND IQBAL MALWANI, THE AO WAS DIRECTED TO VERIFY THE CLAIM OF THE AR FROM THE SEIZED DOCUM ENTS AND THE BOOKS OF ACCOUNT OF THE ASSESSEE,WHILE GIVING EFFECT TO HIS ORDER.WITH REGA RD TO THE PAYMENT MADE TO SHASHI B. MORE,HE HELD THAT NO CONCRETE EVIDENCES OR MATERIAL TO ESTA BLISH THE GENUINENESS OF THE EXPENDITURE INCURRED OR CLAIMED WERE BROUGHT ON RECORD BY THE A SSESSEE,THAT THE AO WAS FULLY JUSTIFIED IN DISALLOWING THE ENTIRE CLAIM OF THE ASSESSEE. 4. BEFORE US,THE AR ARGUED THAT THE ASSESSEE HAD FILED AFFIDAVIT OF COWORKERS OF SHASHI MORE,THAT THE ASSESSEE HAD FILED ALL THE EVIDENCES FOR ALL TH E WORKERS EXCEPT IN CASE OF SHASHI MORE,THAT TRANSACTION WAS RECORDED IN THE BOOKS OF ACCOUNTS.D R SUPPORTED THE ORDER OF THE FAA. WE HAVE HEARD THE RIVAL SUBMISSIONS.WE FIND THAT IT IS THE SECOND ROUND OF LITIGATION AND THE AO OR THE FAA HAVE DELETED ALMOST ALL THE ADDITIONS MA DE DURING THE FIRST ROUND,THAT OUT OF THE TEN PAYMENTS,MADE BY THE ASSESSEE,NINE WERE ALLOWED. IT PROVES THAT BOTH THE AUTHORITIES HAVE EVALUATED THE AVAILABLE EVIDENCES AND ONLY THEN HAV E TAKEN A VIEW.IT WAS THE DUTY OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE EXPENDITURE I.E.PAY MENT TO SHASHI B MORE WITH RELIABLE EVIDENCES.WE FIND THAT IN OTHER NINE CASES THE AO/F AA HAVE ACCEPTED THE EXPLANATION OF THE ASSESSEE,AS SAME WAS CORROBORATED WITH SOME OR THE OTHER EVIDENCE.BUT,IN THE CASE OF SHASHI B 3 ITA NO. 1376/MUM/2012 ELEGANCE TABLEWARE MORE NO EVIDENCES WAS PRODUCED AT ANY STAGE.THEREFO RE,IN OUR OPINION, THE FAA WAS JUSTIFIED IN REJECTING THE CLAIM OF THE ASSESSEE.CONFIRMING HIS ORDER,WE DECIDE THE EFFECTIVE GROUND OF APPEAL (GOA-1&2) AGAINST THE ASSESSEE. 5. GROUND NO.3 HAS ALREADY BEEN ADJUDICATED BY US IN E ARLIER PARAGRAPHS. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED /'0 &' 1 2 ) - .'0 3 ) ' 45 . ORDER PRONOUNCED IN THE OPEN COURT ON 26TH,SEPTEMBER2014 . . ) +,! 6 7 26 ' , 201 4 , ) - 8 SD/- SD/- ( . . / I.P. BANSAL) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, 7 /DATE:26.09 . 2014. . . . . ) )) ) $'9 $'9 $'9 $'9 :9!' :9!' :9!' :9!' / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '# 2. RESPONDENT / $%'# 3. THE CONCERNED CIT(A)/ ; < , 4. THE CONCERNED CIT / ; < 5. DR E BENCH, ITAT, MUMBAI / 9=- $' , , . . . 6. GUARD FILE/ - / %9' %9' %9' %9' $' $'$' $' //TRUE COPY// . / BY ORDER, > / 4 DY./ASST. REGISTRAR , /ITAT, MUMBAI