ITO-9(2)(4), MUMBAI V. M/S. OM SPEEDY TRADING INDIA PVT LTD, MUMBAI

ITA 1612/MUM/2008

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8979 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-12-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 05-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D SONGATE
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 1612/MUM/2008 (ASSESSMENT YEAR: 2003-04) INCOME TAX OFFICER - 9(2)(4) M/S. OM SPEEDY TRADING INDIA P. LTD. ROOM NO. 225, AAYAKAR BHAVAN A-407, SHIVAN 1 CO-OP. SOCIETY MUMBAI 400020 VS. RAHEJA COMPLEX, MALAD (E) MUMBAI 400097 PAN - AAACS 6527 R APPELLANT RESPONDENT APPELLANT BY: SHRI D. SONGATE RESPONDENT BY: NONE O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE CIT(A) IX, MUMBAI DATED 07.12.2007. 2. REVENUE HAS RAISED THE FOLLOWING THREE GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD CIT(A) ERRED IN DIRECTING THE A.O. TO RECALCULAT E THE GROSS PROFIT @ 10% IN RESPECT OF MOBILE BUSINESS AND @ 5% IN RES PECT OF CLOTH BUSINESS WITHOUT APPRECIATING THE FACTS OF THE CASE . 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS.5,6 8,390/- BEING UNEXPLAINED CASH CREDITS U/S. 68 OF THE I.T. ACT, O N ACCOUNT OF AMOUNT PAYABLE TO M/S. NEHA GEMS PVT. LTD. WITHOUT APPRECIATING THE FACTS OF THE CASE. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE GROUNDS BE SET ASIDE AND THAT OF THE ITO/AC/DC BE RESTORED. 3. BRIEFLY STATED, THE ASSESSEE DECLARED INCOME OF ` 1,28,730/- IN THE BUSINESS OF TRADING IN CLOTH AND ELECTRONIC ITEMS. THE A.O., WHILE COMPLETING THE ASSESSMENT, HAS MADE ADDITION BY DISALLOWING VA RIOUS EXPENDITURES AND ALSO MAKING G.P. ADDITION OF ABOUT ` 19,74,628/-. THE MATTER WAS CARRIED TO THE CIT(A) WHO, AFTER CONSIDERING THE SUBMISSIONS, REDUCED THE G.P. TO 10% FOR MOBILE BUSINESS AND 5% FOR CLOTH BUSINESS. THE REVENUE IS AGGRIEVED ON GROUND NO. 1. IN ADDITION THE A.O. ALSO DISALLOWED AN AMOUNT PAYABLE TO ITA NO. 1612/MUM/2008 M/S. OM SPEEDY TRADING INDIA P. LTD. 2 M/S. NEHA GEMS PVT. LTD. OF ` 5,68,390/- AND TREATED AS UNEXPLAINED CASH CREDIT. IT WAS THE SUBMISSION OF THE ASSESSEE THAT IT IS NOT A CREDIT BUT A LIABILITY TO PAY THE AMOUNT FOR PURCHASES MADE FROM NEHA GEMS PVT. LTD. AND SINCE THE PURCHASES ARE NOT DOUBTED INVOKING OF SECTION 68 DOES OT ARISE. THE CIT(A), AFTER EXAMINING THE BANK STATEME NTS, DELETED THE ADDITION BOTH ON FACTUALLY AND ALSO ON DETAILED GROUNDS. REV ENUE IS AGGRIEVED AND RAISED GROUND NO. 2 ON THE SAID ISSUE. 4. AT THE OUT SET IT IS NOTICED THAT THE NOTICE SERVED ON THE ASSESSEE COMPANY HAVE RETURNED UNSERVED AND THE REVENUE WAS DIRECTED TO SERVE THE NOTICE ON THE PARTY. THE LEARNED D.R., AT THE TIME OF HEARING, EXPRESSED HIS INABILITY TO PLACE ON RECORD THE SERVICE OF NOTICE ON THE PARTY. SINCE THE REVENUE FAILED TO SERVE THE NOTICE, THERE IS NO POI NT IN KEEPING THE APPEAL PENDING. ACCORDINGLY REVENUES APPEAL IS DISMISSED WITH AN OPTION TO SEEK WAIVER OF THE APPEAL AS AND WHEN THE REVENUE COULD SERVE THE NOTICE AND COPY OF THE APPEAL MEMO ON THE ASSESSEE AT THE CORR ECT ADDRESS AND FURNISH THE PROOF OF SUCH SERVICE TO THE ITAT. IN THAT CASE IF THE CIRCUMSTANCES SO WARRANTED THE APPEAL CAN BE RESTORED. 5. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH JANUARY 2011. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 11 TH JANUARY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) IX, MUMBAI 4. THE CIT IX, MUMBAI CITY 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.