SUKH HOTELS MOTELS PVT. LTD., MUMBAI V. ITO ,RG. -8(3)(2), MUMBAI

ITA 1606/MUM/2015

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9508 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 19-06-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 18-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C OMI NINGSHEN
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Opportunity of being heard; Principle of natural justice
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI SAKTIJIT DEY (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 1606 /MUM/2015 ASSESSMENT YEAR: 2010 - 11 M/S SUKH HOTELS MOTELS PVT. LTD. 5, KINGS INTERNATIONAL HOUSE, JUHU TARA ROAD, JUHU, MUMBAI - 400049 VS. ITO - 8(3)(2) AAYKAR BHAVAN, M.K. ROAD, MUMBAI - 400020. PAN NO. AA BCS1117J APPELLANT RESPONDENT ASSESSEE BY : MR. M. SUBRAMANIAN , AR REVENUE BY : MR. M.C. OMI NINGSHEN , DR DATE OF HEARING : 19 /06/2017 DATE OF PRONOUNCEMENT : 15/09/2017 ORDER PER N.K. PRADHAN, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2010 - 11. THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS) - 1 8, MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3 ) OF THE INCOME TAX ACT 1961, (T HE ACT). ITA NO. 1606/MUM/2015 2 THERE HAS BEEN A DELAY OF 61 DAYS ON THE PART OF THE ASSESSEE TO FILE THE APPEAL. THE ASSESSEEE HA S FILED AN AFFIDAVIT FOR CONDONATION OF THE ABOVE DELAY. HAVING GONE THROUGH THE CONTENTS OF THE SAID AFFIDAVIT, WE FIND THAT THERE WAS GENUINE DIFFICULTY FACED BY THE ASSESSEE IN FILING THE APPEAL IN TIME. THEREFORE, WE CONDONE THE ABOVE DELAY IN FILING T HE APPEAL. 2. THE GROUND OF APPEAL FILED BY THE ASSESSEE READ AS UNDER: - 1. THE LD. CIT(A) HAS ERRED IN IGNORING THE FACTS THAT THE APPELLANT HAS BEEN DENIED NATURAL JUSTICE, STATING BY WAY OF AFFIDAVIT FILED, IN RESPONSE TO REMAND AND ORIGINAL TEXT OF ORDE R. 2. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE AO DISALLOWING COMMISSION PAID TO MR. DILIP PANCHAL A SUM OF RS.9,45,123/ - . 3. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE AO DISALLOWING COMMISSION PAID TO MS. SHARMILA SARMALKAR A SUM OF RS.4,15,129/ - . 4. THE L D. CIT(A) HAS ERRED IN HOLDING THAT THE AO DISALLOWING COMMISSION PAID TO MS. NEHA NITIN SINGHADIA A SUM OF RS.3,64,535/ - . 5. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE AO DISALLOWING COMMISSION PAID TO VARIOUS TAXI AND RICKSHAW DRIVERS AMOUNTING TO RS.25, 93,769/ - BEING 75% OF RS.34,58,359/ - . 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER (AO) NOTICED DURING THE ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAD DEBITED IN THE PROFIT AND LOSS ACCOUNT RS.1,03,72,387/ - AS COMMISSION PAID. HE ALSO FOUND THAT THE ASSESSEE HAD PAID COMMISSION IN CASH AMOUNTING TO RS.34,58,359/ - AND CLAIMED THE SAME AS PAID TO OTHERS (TAXI/RICKSHAW DRIVERS) IN AMOUNTS L ESS THAN RS.1,000/ - TO EACH PERSON . THE AO ISSUED NOTICE U/S 133(6) TO VERI FY COMMISSION OF RS.9,45,123/ - ITA NO. 1606/MUM/2015 3 PAID TO SHRI DILIP PANCHAL AND RS.4,15,129/ - PAID TO MS. SHARMILA P. SARMALKAR. BOTH THE NOTICES WERE RETURNED BY THE POSTAL AUTHORITIES AS UNSERVED. IN SPITE OF BEING ASKED BY THE AO TO FILE THE ADDRESS OF M S . NEHA NITIN S INGHAD IA, THE ASSESSEE DID NOT FURNISH THE SAME BEFORE THE AO. THE COMMISSION PAID TO MS. SINGHA D IA WAS RS.3,64,535/ - . THE AO GAVE SEVERAL OPPORTUNITIES TO THE ASSESSEE TO FILE DETAILS OF COMMISSION CLAIMED TO HAVE BEEN PAID IN CASH AMOUNTING TO RS.34,58, 359/ - . THE ASSESSEE FAILED TO FILE THE SAID DETAILS BEFORE THE AO. AS THE ASSESSEE FAILED TO FILE THE DETAILS, THE AO MADE A DISALLOWANCE OF 75% OF THE COMMISSION PAID IN CASH TO TAXI/RICKSHAW DRIVERS . ALSO THE AO MADE A FULL DISALLOWANCE OF THE COMMISSIO N PAID TO SHRI DILIP PANCHAL, MS. SHARMILA P. SARMALKAR AND NEHA NITIN SINGHADIA . THE TOTAL DISALLOWANCE MADE BY THE AO THUS COMES TO RS.43,18,566/ - . 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED A N APPEAL BEFORE THE LD. CIT(A). THE ASSESSEE FILED COMPLETE DETAILS ALONG WITH TDS CERTIFICATES BEFORE THE LD. CIT(A). THE ADDRESS OF THE PARTIES TO WHOM COMMISSION PAID WAS ALSO FILED BEFORE HIM. SINCE THESE WERE NEW EVIDENCE, THE LD. CIT(A) SENT A COPY O F IT TO THE AO TO MAKE INQUIRY AND SEND A REMAND REPORT. THE AO VIDE OFFICE LETTER DATED 05.09.2014 SUBMITTED A REMAND REPORT TO THE LD. CIT(A). THE LD. CIT(A) HAS OBSERVED THAT NO DOCUMENTARY EVIDENCE WAS FILED BY THE ASSESSEE DURING THE ASSESSMENT PROCEE DINGS, REMAND PROCEEDINGS AND APPELLATE PROCEEDINGS TO PROVE THE CLAIM OF ABOVE EXPENSES. THEREFORE, HE DISMISSED THE APPEAL FILED BY THE ASSESSEE. ITA NO. 1606/MUM/2015 4 5. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE SUBMITS COPY OF LEDGER ACCOUNTS FOR COMMISSION PAID TO SHRI D ILIP PANCHAL , MS. SHARMILA P. SARMALKAR & MS. NEHA NITIN SINGHADIA ALONG W ITH BANK STATEMENT AND STATED THAT THESE WERE FILED BEFORE THE LD. CIT(A) AS WELL AS AO. ALSO IT IS STATED BY HIM THAT COPY OF LEDGER ACCOUNT FOR THE COMMISSION PAID TO TAXI/RICKSHAW DRIVERS ALONG WITH EVIDENCE WAS FILED BEFORE THE ABOVE INCOME - T AX A UTHORITIES. 6. ON THE OTHER HAND, THE LD. DR SUBMITS THAT THE ASSESSEE FAILED TO FILE DOCUMENTARY EVIDENCE IN SUPPORT OF ITS CLAIM BEFOR E THE AO AND LD. CIT(A). THEREFORE, HE SUPPORTS THE ORDER PASSED BY THE LD. CIT(A) . 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. IN THE CASE OF DHAKESWARI COTTON MILLS LTD. VS. CIT (1954) 26 ITR 775 (SC) , IT IS HELD THAT THE INCOME TAX OFFICER IS NOT ENTITLED TO MAKE A PURE GUESS AND MAKE AN ASSESSMENT WITHOUT REFERENCE TO ANY EVIDENCE OR ANY MATERIAL AT ALL. THERE MUST BE SOMETHING MORE THAN BARE SUSPICION TO SUPPORT THE ASSESSMENT. WE ARE OF THE CONSID ERED VIEW THAT THE CONTENTIOUS ISSUES IN THE INSTANT CASE COULD BE RESOLVED BY EXAMINATION OF THE RELEVANT ACCOUNTS AND PRIMARY DOCUMENTS. THEREFORE, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO TO MAKE A FRESH ASSE SSMENT AFTER GIVING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE DIRECT THE ASSESSEE TO FILE THE COMPLETE DOCUMENTS/ DETAILS BEFORE THE AO. ITA NO. 1606/MUM/2015 5 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15/09/2017. SD/ - SD/ - ( SAKTIJIT DEY ) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 15/09/2017 RAHUL SHARMA, SR. P.S. 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 . BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI