SAMIR S. DOSHI, MUMBAI V. DCIT 12(2), MUMBAI

ITA 1496/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4636 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 03-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VINOD KUMAR
• Assessee Lawyers: SYED N A D EEM LASANI
• Keywords: Business income; Opportunity of being heard; Deemed dividend
• Section: 143(3); 2(22)(e)

Judgement Text

P A G E | 1 ITA NO.1496/MUM/2017 A.Y. 2008 - 09 MR. SAMIR S. DOSHI VS. DCIT - 12(2) IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI S.RIFAUR REHMAN, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO.1496/MUM/2017 (ASSESSMENT YEAR: 2008 - 09) MR . SAMIR S. DOSHI SAAHIL, 14 ALTAMOUNT ROAD, MUMBAI 400026 VS. DCIT - 12(2), MUMBAI PAN ACPPD6608Q (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SYED N A D EEM LASANI, ADVOCATE RESPONDENT BY: SHRI V. VINOD KUMAR, D.R DATE OF HEARING: 21.11.2019 DATE OF PRONOUNCEMENT: 2 2 .11.2019 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 28, MUMBAI, DATED 11.11.2016, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC.143( 3) R.W.S 147 OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 10.03.2014 . T HE ASSESSEE HAS ASSAILED THE IMPUGNED ORDER ON THE FOLLOWING GROUND S OF APPEAL: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, WHETHER THE ID. COMMISSIONER OF INCOME TAX (APPEAL) IS RIGHT IN UPHOLDING THE ASSESSMENT ORDER U/S. 143(3) R.W.S. 147 OF THE ID. ASSESSING OFFICER, WITHOUT GIVING / ALLOWING ANY OPPORTUNITY OF B EING HEARD IN THE CASE. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE ASSESSMENT ORDER PASSED BY A.O U/S. 143(3) R.W.S. 147, IGNORING THE FACT THAT THE TRANSACTION UNDER ISSUE IS COVERED BY EXCLUSION CLAUSE OF SECTION 2(22)(E) OF I.T ACT, AND APPELLANT'S OBJECTION FOR REASSESSMENT UNDER THIS SECTION WAS DISPOSED OFF WITHOUT GIVING ANY REASON. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. COMM ISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE VIEW OF THE ID. A.O TO THE EXTENT OF ADVANCE RECEIVED FROM COMPANY WAS DEEMED DIVIDEND UNDER SECTION 2(22)(E) OF THE LT ACT, IGNORING THE FACT THAT THE SAID AMOUNT WAS RECEIVED BY THE APPELLANT F OR THE COMPANY'S BUSINESS EXPANSION. P A G E | 2 ITA NO.1496/MUM/2017 A.Y. 2008 - 09 MR. SAMIR S. DOSHI VS. DCIT - 12(2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 62,50,000/ - (RUPEES SIXTY - TWO IAKHS FIFTY THOUSAND ONLY) MADE BY A. O INVOKING SECTION 2(22)(E) OF THE I.T ACT, IGNORING THE FACT THAT THE ADVANCE AMOUNT WAS ACTUALLY OF RS. 36,50,000/ - (RUPEES THIRTY - SIX IAKHS FIFTY THOUSAND ONLY) ONLY AND NET OF ADVANCE WAS OF RS. 31,75,000/ - (RUPEES THIRTY - ONE LAKHS SEVENTY - FIVE THOUSAN D ONLY). ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS E RRED IN CONFIRMING THE VIEW OF ID. A.O THAT COMMISSION, CONSULTANCY AND ADVISORY FEES DECLARED BY APPELLANT UNDER HEAD 'INCOME FROM B USINESS OR PROFESSION IN THE RETURN, TO BE TAXED UNDER THE HEAD 'INCOME FROM OTHE R SOURCE'. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE DISALLOWANCE OF EXPENDITURES MADE BY ID. A.O AS CLAIMED BY APPELLANT AGAINST COMMISSION, CONSULTANCY AND ADVISORY FEES INCOME DECLARED BY THE APPELLANT IN THE RETURN FILED UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION'. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ERROR COMMITTED BY ID. A.O AS DOUBLY TAX ON THE INCOME UNDER THE HEAD 'INCOME FROM BUSINESS OR PROFESSION' DECLARED IN THE RETUR N OF INCOME FILED BY THE APPELLANT AND THE SAME INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCE' AS CONSIDERED AND COMPUTED BY THE LEARNED ASSESSING OFFICER. THE APPELLANT CRAVES LEAVE TO SUBMIT AT THE TIME OF HEARING SUCH FURTHER FACTS, INFORMATION, CLAR IFICATION, DOCUMENTS ETC. AS MAY BE NECESSARY FOR THE PURPOSE OF DECIDING THE ISSUES IN THE APPEAL. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIFY THE AFORESAID GROUNDS OF APPEAL. 2. BRIEFLY STATED, THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR A.Y. 2008 - 09 ON 30.07.2008, DECLARING HIS TOTAL INCOME AT RS.33,47,800/ - . THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED AS SUCH UNDER SEC.143(1) OF THE ACT. SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS REOPENED UNDER SEC.147 OF THE ACT. 3. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS OBSERVED BY THE A.O THAT THE ASSESSEE WAS A REGISTERED SHAREHOLDER WITH A HOLDING OF MORE THAN10% IN M/S FALCON BROKERAGE PVT. LTD. OBSERVING, THAT AN AMOUNT OF RS.62,50,000/ - WAS ADVANCED BY THE AFORE SAID COMPANY TO THE ASSESSEE, THE A.O ASSESSED THE SAME AS DEEMED DIVIDEND UNDER SEC.2(22)(E) OF THE ACT. APART THEREFROM, THE A.O OBSERVED THAT THE ASSESSEE HAD SHOWN CERTAIN MISCELLANEOUS RECEIPTS AMOUNTING TO RS.5,75,000/ - IN HIS PROFIT AND LOSS ACC OUNT FOR THE YEAR UNDER CONSIDERATION. IT WAS NOTICED BY THE A.O , THAT THE ASSESSEE AFTER CLAIMING CERTAIN EXPENSES AGAINST THE AFORESAID RECEIPTS HAD ACCOUNTED FOR THE BALANCE AMOUNT AS HIS BUSINESS INCOME FOR THE YEAR UNDER CONSIDERATION. AS THERE WAS NO EVIDENCE AS REGARDS THE NATURE OF RECEIPTS WHICH COULD EVIDENCE THAT THE SAME PERTAINED TO ANY BUSINESS ACTIVITY OF THE ASSESSEE, THEREFORE, THE A.O SUBJECTED THE SAME TO TAX AS THE INCOME OF THE ASSESSEE FROM O THER P A G E | 3 ITA NO.1496/MUM/2017 A.Y. 2008 - 09 MR. SAMIR S. DOSHI VS. DCIT - 12(2) SOURCES. AFTER INTER ALIA MAKING TH E AFORESAID ADDITIONS/DISALLOWANCE, THE A.O ASSESSED THE INCOME AT RS.1,01,72,820/ - . 4. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A) . AS THE ASSESSEE F A ILED TO PUT UP AN APPEARANCE IN THE COURSE OF THE APPELLATE PROCEEDINGS, THERE FORE, THE CIT(A) ON THE BASIS OF AN EX - PARTE ORDER DISMISSED THE APPEAL. 5. THE ASSESSEE BEING AGGRIEVED, WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE AT THE V ERY OUTSET OF THE HEARING OF THE APPEAL SUBMITTED , THAT THE FAILURE ON THE PART OF THE ASSESSEE TO PUT UP AN APPEARANCE IN THE COURSE OF THE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY WAS FOR THE REASON THAT NO NOTICE INTIMATING THE HEARING OF THE AP PEAL WAS EVER RECEIVED BY HIM . IT WAS SUBMITTED BY THE LD. A.R, THAT A PERUSAL OF THE ORDER PASSED BY THE CIT(A) DATED 11.11.2016, THEREIN REVEALED THAT THE ADDRESS OF THE ASSESSEE WAS WRONGLY MENTIONED VIZ. (I) SAMIR S. DOSHI, 4 & 5 SAI COMMERCIAL BUILDI NG, 82 - A JOLLY MAKER APT, NO. - 1, CUFFE PARADE, MUMBAI 400 005. IT WAS SUBMITTED BY THE LD. A.R , THAT THE ADDRESS OF THE ASSESSEE AS WAS MENTIONED IN THE FORM NO. 3 5 SAMIR S. DOSHI, NO.82 - A, JOLLY MAKER, APT. NO.1 , CUFFE PARADE, MUMBAI 400 00 5 . IT WAS AVERRED BY THE LD. A.R THAT APPARENTLY , AS THE NOTICES INTIMATING THE HEARING OF THE APPEAL WOULD ALSO HAVE BEEN FORWARDED BY THE OFFICE OF THE CIT(A) AT THE AFORESAID INCORRECT ADDRESS, THEREFORE, THE ASSESSEE WHO WAS NEVER PUT TO NOTICE ABOUT THE DATE OF HEARING OF THE APPEAL, HAD THUS REMAINED DIVESTED OF AN OPPORTUNITY FOR APPEARING IN THE COURSE OF THE PROCEEDINGS BEFORE THE SAID APPELLATE AUTHORITY. IN THE BACKDROP OF HIS AFORESAID CONTENTION, IT WAS SUBMITTED BY THE LD. A.R THAT IN ALL FAIRNESS THE MATTER MAY BE RESTORED TO THE FILE OF THE CIT(A) FOR FRESH ADJUDICATION AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE DID NOT CONTROVERT THE AFORES AID CLAIM OF THE ASSESSES COUNSEL. 7. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES FOR BOTH THE PARTIES , PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL AVAILABLE ON RECORD. AS IS DISCERNIBLE FROM THE ORDER OF THE CIT(A), WE ARE IN AGREEMENT WITH THE CLAIM OF THE LD. A.R THAT THE ADDRESS MENTIONED BY THE ASSESSEE IN FORM NO.35 IS DIFFERENT FROM THAT MENTIONED BY THE CIT(A) IN HIS ORDER DATED P A G E | 4 ITA NO.1496/MUM/2017 A.Y. 2008 - 09 MR. SAMIR S. DOSHI VS. DCIT - 12(2) 11.11.2016. IN OUR CONSIDERED VIEW, THERE IS SUBSTANTIAL FORCE IN THE CLAIM OF THE LD. A.R. THAT AS N OTICE S INTIMATING THE HEARING OF THE APPEAL BY THE OFFICE OF THE CIT(A) WOULD ALSO HAVE BEEN FORWARDED AT THE AFORESAID INCORRECT ADDRESS, THEREFORE, FOR THE SAID REASON THE SAME WERE NOT RECEIVED BY THE ASSESSEE. IN THE BACKDROP OF THE AFORESAID FACTS, W E HOLD A STRONG CONVICTION THAT THE ASSESSEE FOR NO FAULT ON HIS PART HAD REMAINED DIVESTED OF AN OPPORTUNITY OF PUTTING UP AN APPEARANCE IN THE COURSE OF THE APPELLATE PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY. ON THE BASIS OF THE AFORESAID FACT, I N OUR CONSIDERED VIEW, THE MATTER REQUIRES TO BE RESTORED TO THE FILE OF THE CIT(A), WITH A DIRECTION TO RE - DECIDE THE APPEAL AFTER AFFORDING AN OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, THE MATTER IS RESTORED TO THE FILE OF THE CIT(A) FOR F RESH ADJUDICATION. BEFORE PARTING, WE MAY HEREIN OBSERVE, THAT AS WE HAVE RESTORED THE MATTER FOR FRESH ADJUDICATION TO THE FILE OF THE CIT(A) , THEREFORE, WE REFRAIN FROM ADVERTING TO AND THEREIN ADJUDICATING THE MERITS OF THE CASE AS HAD BEEN ASSAILED BY THE ASSESSEE IN HIS GROUNDS OF APPEAL FILED BEFORE US. 8. THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRO NOUNCED IN THE OPEN COURT ON 2 2 . 11.2019 S D / - S D / - ( S.RIFAUR REHMAN ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 22 .11 .2019 PS. ROHIT / 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 P A G E | 5 ITA NO.1496/MUM/2017 A.Y. 2008 - 09 MR. SAMIR S. DOSHI VS. DCIT - 12(2)