Sri. RAJENDRA PRASAD C. SINGH, MUMBAI V. ITO Wd. - 24(1)(2), MUMBAI

ITA 1712/MUM/2007

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75919 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 24-03-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 26-02-2007
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: JITENDRA SINGH
• Keywords: Opportunity of being heard
• Section: 131; 68; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D B ENCH, MUMBAI . . , , !'#$ , % & BEFORE SHRI I.P. BANSAL, JM AND SHRI N.K. BILLAI YA, AM ./ I.T.A. NO.1712/MUM/2007 ( ' ' ' ' / ASSESSMENT YEAR :2001-02 MR. RAJENDRA PRASAD SINGH, NEW DINDOSHI ROYAL HILLS CO. OP. HSG. SOC., FLAT NO. 30-C, MHADA ROW HOUSE, NEXT TO N.N.P GOREGAON(E) MUMBAI-400 065 / VS. THE ITO, WARD 24(1)(2), C-10, PRATKSHYA KAR BHAVAN, BANDRA KURLA COMPLEX, MUMBAI ( % ./ )* ./ PAN/GIR NO. : AADPS 6935M ( (+ / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY: SHRI JITENDRA SINGH ,-(+ / . / RESPONDENT BY: SHRI P.K. SINGH / 0% / DATE OF HEARING :24.03.2014 12' / 0% / DATE OF PRONOUNCEMENT : 27.03.2014 3 / O R D E R PER N.K. BILLAIYA, AM: THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST T HE ORDER OF THE LD. CIT(A)-XXIV, MUMBAI DT.28.10.2005 PERTAINING T O A.Y. 2001-02. 2. THE ASSESSEE IS AGGRIEVED BY TWO ADDITIONS WHICH WAS SUSTAINED BY THE LD. CIT(A). THE FIRST ADDITION RELATES TO SUND RY CREDITOR AMOUNTING TO ITA NO. 1712/M/07 2 RS. 6,36,105/- AND THE SECOND ADDITION RELATES TO U NSECURED LOAN OF RS. 2,24,708/-. 3. THE APPEAL IS BARRED BY 101 DAYS. THE ASSESSEE HAS FILED AN AFFIDAVIT STATING THE REASONS FOR THE DELAY IN FILI NG OF THE APPEAL. WE HAVE CAREFULLY CONSIDERED THE FACTS STATED IN THE AFFIDA VIT. IN OUR CONSIDERED VIEW, THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUS E FOR NOT FILING THE APPEAL ON TIME. THE DELAY IS CONDONED AND THE APPE AL IS ADMITTED. 4. THE ASSESSEE IS A PROPRIETOR OF M/S. AMAR METAL INDUSTRIES. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS SHOWN A TOTAL TURNOVER OF RS. 33.09 LAKHS AND NET PROFIT AT RS. 75,380/-. SINCE THERE WAS NO COMPLIANCE TO THE NOTICES ISSUED BY THE AO, THE ASSESSMENT WAS COMPLETED U/S. 144 OF THE I.T. ACT. IN HIS BALANCE SHEET, THE ASSESSEE H AS SHOWN SUNDRY CREDITOR AT RS. 7,46,190/- AND UNSECURED LOAN AT RS. 2,24,70 8/-. SINCE NO EXPLANATION WAS FURNISHED DURING THE ASSESSMENT PRO CEEDINGS, THE AO TREATED THESE AMOUNTS AS INCOME FROM UNDISCLOSED SO URCES. 5. BEFORE THE LD. CIT(A), THE ASSESSEE FILED CONFIR MATIONS. IT WAS EXPLAINED THAT IN SUBSEQUENT YEARS, THE ACCOUNT HAS BEEN SQUARED UP. THE LD. CIT(A) DIRECTED THE AO TO REDUCE THE AMOUNT SHO WN IN THE NAME OF THE CREDITORS WHOSE CONFIRMATIONS HAVE BEEN FILED AND CONFIRMED THE ADDITIONS IN RESPECT OF THE OTHER CREDITORS. IN RE SPECT OF UNSECURED LOAN, THE ASSESSEE FILED LOAN CONFIRMATION. THE LD. CIT( A) CALLED FOR A REMAND REPORT. IN HIS REMAND REPORT, THE AO STATED THAT O UT OF THE SUMMONS ISSUED U/S. 131 TO THREE PARTIES, TWO SUMMONS WERE RETURNED BACK UNSERVED. STATEMENT OF SHRI AMIT SINGH WAS RECORDE D WHEREIN THE SAID SHRI AMIT SINGH SHOWED HIS INABILITY TO REMEMBER AN Y PERSON NAMED BY SHRI RAJENDRA PRASAD (ASSESSEE) AND DENIED ANY TRA NSACTION OF LOAN MADE ITA NO. 1712/M/07 3 BETWEEN HIM AND SHRI RAJENDRA PRASAD (ASSESSEE). A FTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND THE REMAND REPORT, TH E LD. CIT(A) OBSERVED THAT THE UNSECURED LOANS APPEARS TO BE BOG US AND CONFIRMED THE ADDITION OF RS. 2,24,708/-. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. I N SO FAR AS ADDITION ON ACCOUNT OF SUNDRY CREDITOR IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE CONFIRMATION LETTERS FROM THE CREDITORS WERE FILED FURTHER ALL THE CREDITORS ACCOUNTS HAVE BEEN SQUAR ED UP IN SUBSEQUENT YEARS. THE LD. COUNSEL DREW OUR ATTENTION TO THE C OPIES OF THE LEDGER ACCOUNT OF THE CREDITORS AND POINTED OUT THAT THE ACCOUNTS HAVE BEEN SETTLED BY A/C PAYEE CHEQUE THEREFORE THE ADDITION S MADE BY THE AO AND CONFIRMED BY THE LD. CIT(A) IN RESPECT OF UNEXPLAIN ED SUNDRY CREDITORS DESERVES TO BE DELETED. 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPORTED THE FINDINGS OF THE LOWER AUTHORITIES. 8. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE LOWE R AUTHORITIES AND THE RELEVANT MATERIAL EVIDENCES BROUGHT ON RECORD. THE ADDITIONS ON ACCOUNT OF SUNDRY CREDITORS WERE MADE IN RESPECT OF THE FOLLOWING CREDITORS: 1) PARLE STEEL - RS. 4,53,950/- 2) RIKESH TRADING CO. - RS. 1,29,282/- 3) VIJAY METAL SYNDICATE - RS. 34,970/- 9. WE HAVE CAREFULLY GONE THROUGH THE COPIES OF THE LEDGER ACCOUNT. WE FIND THAT THE OUTSTANDING LIABILITIES HAVE BEEN SQARED UP IN SUBSEQUENT ITA NO. 1712/M/07 4 YEARS. THIS FACT HAS ALSO BEEN ADMITTED BY THE AO IN HIS REMAND REPORT DT. 18.8.2005. THE OBSERVATION OF THE LD. CIT(A) TH AT SQUARING UP OF THE ACCOUNTS DOES NOT MAKE THE SUNDRY CREDITORS GENUINE IS NOT ACCEPTABLE. ONCE THE SUNDRY CREDITORS ACCOUNTS HAVE BEEN SQUARE D UP AND THE REPAYMENTS HAVE BEEN MADE BY A/C PAYEE CHEQUE, WE D O NOT FIND ANY REASON TO SUSTAIN THE DISALLOWANCES. FINDINGS OF THE LD. CIT(A) ARE REVERSED. THE AO IS DIRECTED TO DELETE THE ADDITIO NS ON ACCOUNT OF SUNDRY CREDITORS TOTALING TO RS. 6,36,105/-. IN SO FAR AS ADDITION OF UNSECURED LOAN IS CONCERNED, THE ASSESSEE HAS FILED CONFIRMAT ION OF LOAN. IN THE INTEREST OF JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE BACK TO THE FILES OF THE AO TO BE DECIDED AFRESH. THE ASSESSEE IS DIREC TED TO ESTABLISH THE IDENTITY , GENUINENESS OF THE TRANSACTION AND THE C REDIT WORTHINESS OF THE LOAN GIVERS. THE AO IS DIRECTED TO VERIFY THE DETA ILS IN THE LIGHT OF THE PROVISIONS OF SEC. 68 OF THE ACT AFTER GIVING REASO NABLE AND SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MARCH. 2014 3 / 2' % 4 56 27.3.2014 2 / 7 SD/- SD/- (I.P. BANSAL ) (N.K. BILLAIYA) /JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 5 DATED 27.3.2014 . . ./ RJ , SR. PS ITA NO. 1712/M/07 5 3 3 3 3 / // / ,0! ,0! ,0! ,0! 8!'0 8!'0 8!'0 8!'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. 9 ( ) / THE CIT(A)- 4. 9 / CIT 5. !:7 ,0 , , / DR, ITAT, MUMBAI 6. 7 ; / GUARD FILE. 3 3 3 3 / BY ORDER, -!0 ,0 //TRUE COPY// < << < / = = = = ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI