M/S. GEE SQUARE EXPORTS INDIA PRIVATE LIMITED, MUMBAI V. ACIT 15(1)(2), MUMBAI

ITA 1440/MUM/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2096 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: G
• Assessment Year: 2015-2016
• Appeal Filed On: 11-03-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SATISH RAJORE
• Keywords: Unexplained cash credit; Additional evidence; TDS
• Section: 68; 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G , BENCH MUMBAI BEFORE SHRI PAWAN SINGH, JM & SHRI M.BALAGANESH, AM ITA NO. 1440 / MUM/20 1 9 ( ASSESSMENT YEAR 2015 - 16 : ) M/S. GEE SQUARE EXPORTS INDIA PVT. LTD., 522, THE GREAT EASTERN GALLER IA SECTOR - 4, NERUL WEST NAVI MUMBAI 400 706 VS. ASST. COMMISSIONER OF INCOME TAX - 15(1)(2) ROOM NO.483A, 4 TH FLOOR AAYAKAR BHAVAN M.K.ROAD, MUMBAI 400 020 PAN/GIR NO. AABCG9883D ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY SHRI RAJIV KHANDELWAL REV ENUE BY SHRI SATISH RAJORE DATE OF HEARING 11 / 06 /201 9 DATE OF PRONOUNCEMENT 19 / 06 /201 9 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 1440/MUM/2019 FOR A.Y. 2015 - 16 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONE R OF INCOME TAX (APPEALS) - 24, MUMBAI IN APPEAL NO. CIT(A) - 24/ACIT - 15(1)(2)/IT - 237/2017 - 18 DATED 10/01/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 14/12/2017 BY THE LD. ASSISTANT COMMISSIONER OF INCOME TAX - 15(1)(2), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO. 1440/MUM/2019 M/S. GEE SQUARE EXPORTS (I) PVT.LTD. 2 2. THE GROUND NO. 1 RAISED BY THE ASSESSEE WAS GENERAL IN NATURE AND STATED TO BE NOT PRESSED BY THE LD AR AT THE TIME OF HEARING BEFORE US, WHICH IS TAK EN AS STATEMENT FROM THE BAR. ACCORDINGLY, THE SAME IS DISMISSED AS NOT PRESSED. 3. THE GROUND NO. 2 RAISED BY THE ASSESSEE IS WITH REGARD TO NON - ADMISSION OF ADDITIONAL EVIDENCES BY THE LD CITA WHICH WERE FILED BEFORE HIM BY THE ASSESSEE IN TERMS OF RULE 46A OF THE INCOME TAX RULES, 1962. THE INTER CONNECTED ISSUE INVOLVED THEREON ON MERITS IS AS TO WHETHER THE LD CIT ( A ) WAS JUSTIFIED IN CONFIRMING THE ADDITION MADE IN THE SUM OF RS 2,00,00,000/ - BY THE LD AO AS UNEXPLAINED CASH CREDIT U/S 115BBE OF THE ACT, IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SELLING OF ICE AND UNDERTAKE FREEZING AND COLD STORAGE ACTIVITY. IT IS ALSO ENGAGED IN EXPORT OF FROZE N FOODS VIZ SEA FOOD EXPORTS. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE ASST YEAR 2015 - 16 ON 30.9.2015 DECLARING TOTAL LOSS OF RS 78,87,376/ - . THE LD AO OBSERVED DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAD BORROWED UNSECURED LOAN OF RS 2,00,00,000/ - FROM M/S EAGLE CONTAINER FOODS PVT LTD AMONG OTHER PARTIES. THE ASSESSEE WAS ASKED TO SUBMIT THE ADDRESS AND CONFIRMATION FROM THE ABOVE PARTY. THE ASSESSEE VIDE ITS LETTER DATED 4.9.2017 FILED THE LEDGER COPY AND CONFIRMATION F ROM THE SAID PARTY. THE LD AO OBSERVED THAT NO DOCUMENTARY EVIDENCES TO ESTABLISH THE CREDIT WORTHINESS OF THE LENDER AND GENUINENESS OF THE TRANSACTION WAS FURNISHED BY THE ASSESSEE COMPANY. THE ASSESSEE WAS ASKED TO FURNISH THE LEDGER CONFIRMATION IN ORIGINAL, ITR - V, BANK STATEMENTS REFLECTING THE TRANSACTION. NOTICE U/S 133(6) OF THE ACT WAS ALSO ISSUED ON THE SAID PARTY TO REPLY WITHIN 3 DAYS FROM THE DATE OF RECEIPT OF SUCH NOTICE. NO RESPONSE WAS RECEIVED FROM THE SAID PARTY BY ITA NO. 1440/MUM/2019 M/S. GEE SQUARE EXPORTS (I) PVT.LTD. 3 THE LD AO. ACCOR DINGLY, THE LD AO CONCLUDED THAT THE PRIMARY ONUS TO ESTABLISH THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS IN RESPECT OF ALLEGED UNSECURED LOAN APPEARING AS CREDIT IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE COMPANY WAS NOT PROVED BY THE AS SESSEE WITH ANY EVIDENCES. SINCE THEY REMAIN UNEXPLAINED, THE SAME WAS SOUGHT TO BE TAXED AS UNEXPLAINED CASH CREDIT U/S 68 R.W.S 115BBE OF THE ACT BY THE LD AO IN THE ASSESSMENT. 5. BEFORE THE LD CIT ( A ) , THE ASSESSEE PLEADED THAT THE NOTICE U/S 133(6) OF THE ACT WAS ISSUED BY THE LD AO ONLY ON 15.11.17 AND SINCE THE PARTY WAS STATIONED IN GHAZIABAD, IT WOULD TAKE 10/15 DAYS TO DELIVER THE NOTICE ITSELF AND THEREAFTER IMMEDIATELY RESPONDING TO THE SAME IS PRACTICALLY NOT POSSIBLE. THE LD AO DID NOT WAI T FOR THE REPLY TO BE FILED BY THE SAID PARTY AND COMPLETED THE ASSESSMENT ON 14.12.17, WHEREAS THE PARTY HAD REPLIED TO THE NOTICE U/S 133(6) OF THE ACT DIRECTLY TO THE LD AO ON 21.12.17 , WHICH IS EVIDENCED BY RECEIPT ISSUED BY THE COURIER COMPANY. THE ASSESSEE ALSO STATED THAT DUE TO CONTINUOUS PERSUASION WITH THE SAID PARTY, THE ASSESSEE COULD OBTAINED THE COPY OF THEIR RELEVANT ITR COPY, THEIR BANK STATEMENTS AND THE COURIER RECEIPT COPY ON 21.12.17 THROUGH EMAIL. THESE DOCUMENTS WERE FILED BEFORE T HE LD CITA AS ADDITIONAL EVIDENCES IN TERMS OF RULE 46A OF THE IT RULES. THE LD CITA IN HIS ORDER IN PARA 4.2.6 OBSERVED AS UNDER: - 4.2.6. DURING THE COURSE OF THE APPELLATE PROCEEDINGS, THE APPELLANT SUBMITTED THE FOLLOWING DOCUMENTS UNDER RULE 46A OF I T RULES, 1961 1) CONFIRMATION OF ACCOUNT OF M/S EAGLE CONTINENTAL FOOD PVT LTD FOR F.Y. 2014 - 15. 2) COPY OF ACKNOWLEDGEMENT OF INCOME TAX RETURN OF M/S EAGLE CONTINENTAL FOOD PVT LTD FOR A.Y. 2015 - 16. 3) COPY OF BANK STATEMENT OF M/S EAGLE CONTINENTAL F OOD PVT LTD HIGHLIGHTING RESPECTIVE TRANSACTIONS. 4) COPY OF COURIER RECEIPT DATED 21.12.2017 OF DOCUMENTS COURIERED BY M/S EAGLE CONTINENTAL FOOD PVT LTD OF THE AO MR KUNAL HAVER (ACIT). ITA NO. 1440/MUM/2019 M/S. GEE SQUARE EXPORTS (I) PVT.LTD. 4 5.1. THE LD CIT ( A ) OBSERVED ON THE ADMISSIBILITY OF ADDITIONAL EVID ENCES UNDER RULE 46A OF THE RULES THAT THE ASSESSEE HAD MERELY STATED ON THE LETTER THAT ADDITIONAL EVIDENCES ARE SUBMITTED UNDER RULE 46A WITHOUT FURNISHING ANY DETAILED SUBMISSION OR PRAYER AS TO WHY THEY SHOULD BE CONSIDERED UNDER THIS RULE. HE FURTHER OBSERVED THAT THE CASE OF THE ASSESSEE DOES NOT FALL UNDER ANY OF THE CIRCUMSTANCES MENTIONED IN RULE 46A OF THE RULES AND HENCE THE ADDITIONAL EVIDENCES CANNOT BE ADMITTED UNDER RULE 46A OF THE RULES. THE LD CIT ( A ) ACCORDINGLY UPHELD THE ACTION OF THE L D AO ON THE SAME REASONING GIVEN BY THE LD AO IN THE ASSESSMENT ORDER. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE PRIMARY FACTS STATED HEREINABOVE REMAIN UNDISPUTED AND HENCE THE SAME ARE NOT REITERATED FOR THE SAKE OF BREVITY. WE FIND THAT THE LOAN TRANSACTIONS WITH M/S EAGLE CONTINENTAL FOOD PVT LTD IS TO BE EXAMINED IN THE INSTANT CASE. IN SUPPORT OF THIS, THE ASSESSEE HAD FURNISHED THE VARIOUS DOCUMENTS AS STATED ABOVE BEFORE THE LD CIT ( A ) , WHICH HA D NOT BEEN ADMITTED AS ADDITIONAL EVIDENCES IN TERMS OF RULE 46A OF THE RULES. WE FIND THAT THE LD AR HAD ALSO PLACED THE ANNUAL ACCOUNTS OF M/S EAGLE CONTINENTAL FOOD PVT LTD TO PROVE ITS CREDITWORTHINESS TOGETHER WITH ITS INCOME TAX RETURN ACKNOWLEDGEMEN T FOR THE ASST YEAR 2015 - 16, BANK STATEMENTS EVIDENCING THE LOAN TRANSACTION DULY HIGHLIGHTED, CONFIRMATION OF BALANCE FROM LOAN CREDITOR ETC. WE FIND THAT THESE DOCUMENTS GO TO THE ROOT OF THE MATTER AND ARE CRUCIAL FOR ADJUDICATION OF THE ISSUE ON MERIT S OF THE CASE. HENCE WE DEEM IT FIT AND APPROPRIATE TO ADMIT THE SAME AND DIRECT THE LD AO TO CONSIDER THE SAME TO DECIDE THE ISSUE ON MERITS. THE LD AO IS ACCORDINGLY DIRECTED FOR MAKING DENOVO ADJUDICATION OF THE ISSUE ON MERITS IN THE LIGHT OF AFORESA ID DOCUMENTS. THE ASSESSEE IS GIVEN LIBERTY TO FURNISH ADDITIONAL DOCUMENTS, IF ANY, IN SUPPORT OF ITS CONTENTIONS. THE LD AO IS ALSO AT ITA NO. 1440/MUM/2019 M/S. GEE SQUARE EXPORTS (I) PVT.LTD. 5 LIBERTY TO MAKE ANY ENQUIRIES IN THIS REGARD TO EXAMINE THE VERACITY OF LOAN TRANSACTION WITH M/S EAGLE CONTINENTAL FOO D PVT LTD, IF HE SO DESIRES. ACCORDINGLY, THE GROUND NO. 2 AND 3 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. THE GROUND NO. 4 RAISED BY THE ASSESSEE IS WITH REGARD TO NON - GRANT OF TDS CREDIT OF RS 2,88,000/ - BY THE LD AO. WE FIND THA T BEFORE THE LD CIT (A), THIS GROUND WAS NOT PRESSED BY THE ASSESSEE. NO ARGUMENT WAS ADVANCED BEFORE US WITH REGARD TO THIS GROUND. HENCE , THE GROUND NO. 4 IS TREATED AS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 / 06 /201 9 SD/ - ( PAWAN SINGH ) SD/ - ( M.BALAGANESH ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED 19 / 06 /201 9 KARUN A SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//