OM CREATIONS, MUMBAI V. ITO 25(1)(2), MUMBAI

ITA 1720/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9297 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-05-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 10-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM TIWARI
• Assessee Lawyers: MILIND V SAHASTRABUDHE
• Keywords: Reopening of assessment; Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Difference of opinion; Change of opinion
• Section: 143(3); 68

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 1720 /MUM/ 2017 (ASSESSMENT YEAR 20 07 - 08 ) OM CREATIONS A/402, RADHA VILAS APARTMENT WAMANRAO BHOIR MARG DAHISAR WEST MUMBAI - 400 068. PAN : AABFO1410B VS. ITO 25(1)(2) BANDRA KURLA COMPLEX BANDRA EAST MUMBAI - 400 051. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI MILIND V. SAHASTRABUDHE DEPARTMENT BY SHRI RAM TIWARI DATE OF HEARING 20 .9. 201 7 DATE OF PRONOUNCEMENT 20 . 9 . 201 7 O R D E R THE A PPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 16 - 12 - 2016 PASSED BY LD CIT(A) - 44, MUMBAI AND IT RELATES TO THE ASSESSMENT YEAR 2007 - 08. 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF GARMENT STITCHING. THE ORIGINAL ASSESSMENT WAS COMP LETED U/S 143(3) OF THE ACT ON 12.11.2007. THE AO NOTICED THAT THE ASSESSEE HAS DECLARED TRADING RECEIPTS TO THE TUNE OF RS.3.02 CRORES, WHEREAS THE AGGREGATE RECEIPTS WERE SHOWN AT RS.3.06 CRORES IN THE TDS CERTIFICATES. HENCE THE AO TOOK THE VIEW THAT TH ERE IS ESCAPEMENT OF INCOME AND ACCORDINGLY REOPENED THE ASSESSMENT. IN THE REOPENED THE ASSESSMENT, THE AO ASSESSED THE DIFFERENCE NOTICED BY HIM AND ALSO ASSESSED A SUM OF RS.28.44 LAKHS U/S 68 OF THE ACT AS UNEXPLAINED CASH CREDIT. OM CREATIONS 2 3. THE APPEAL FI LED BEFORE LD CIT(A) WAS DISMISSED AND HENCE THE ASSESSEE HAS FILED THIS APPEAL. 4. THE FIRST ISSUE RELATES TO THE VALIDITY OF REOPENING OF ASSESSMENT. THE LD A.R SUBMITTED THAT THE AO HAS REOPENED THE ASSESSMENT ON CHANGE OF OPINION AND ACCORDINGLY C ONTENDED THAT THE REOPENING OF ASSESSMENT IS NOT VALID. HOWEVER, I NOTICE THAT THE ASSESSING OFFICER HAS RECORDED PROPER REASONS TO SUPPORT THE REASONS FOR REOPENING, I.E., THE RECEIPTS DECLARED BY THE ASSESSEE WERE LOWER THAN THAT SHOWN IN THE TDS CERTIF ICATES, WHICH CANNOT BE TERMED AS MERE CHANGE OF OPINION. ACCORDINGLY I AM OF THE VIEW THAT THE LD CIT(A) HAS RIGHTLY UPHELD THE VALIDITY OF REOPENING OF ASSESSMENT. 5. THE NEXT ISSUE RELATES TO THE ADDITION OF RS.3,42,662/ - , BEING THE DIFFERENCE IN THE RECEIPTS. THE AO ADDED THE SAME ON THE REASONING THAT THE ASSESSEE DID NOT EXPLAIN THE DIFFERENCE. EVEN THOUGH THE ASSESSEE FURNISHED RECONCILIATION STATEMENT BEFORE LD CIT(A), YET THE LD CIT(A) DID NOT CONSIDER THE SAME ON THE REASONING THAT THE AS SESSEE DID NOT SHOW SUFFICIENT REASONS FOR NOT FURNISHING THE SAME BEFORE THE AO. 6. I HEARD THE PARTIES ON THIS ISSUE. IN MY VIEW, IN THE INTEREST OF NATURAL JUSTICE, THE RECONCILIATION STATEMENT PREPARED BY THE ASSESSEE SHOULD BE ADMITTED. IN FACT, CONSIDERATION OF THE SAID MATERIAL WOULD PROMOTE THE CAUSE OF JUSTICE. ACCORDINGLY I ADMIT THE RECONCILIATION STATEMENT PREPARED BY THE ASSESSEE. HOWEVER, THE SAME WOULD REQUIRE CONSIDERATION OF THE AO. ACCORDINGLY, I SET ASIDE THE ORDER PASSED BY LD CIT (A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO FOR EXAMINING THE RECONCILIATION STATEMENT. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. OM CREATIONS 3 7. THE NEXT ISS UE RELATES TO THE ADDITION OF RS.28.44 LAKHS MADE BY THE AO AS UNEXPLAINED CASH CREDIT. THE AO ADDED THE AMOUNT OF RS.28.44 LAKHS SHOWN AS LIABILITY UNDER THE HEAD BD - SAPL AS UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT. BEFORE THE LD CIT(A), THE ASSESSEE SUBMITTED THAT THE SAME IS A LOAN FACILITY (BILL DISCOUNTING LOAN) AVAILED BY THE ASSESSEE FROM JANAKALYAN SAHAKARI BANK LTD. BUT THE SAME DID NOT FIND FAVOUR WITH THE LD CIT(A) AND HENCE HE CONFIRMED THE ADDITION. 8. BEFORE ME, THE LD A.R FURNISHED C OPIES OF LOAN SANCTION LETTER, COPIES OF BANK ACCOUNT, LEDGER ACCOUNT OF THE ASSESSEE, THE RECONCILIATION STATEMENT BETWEEN THE BANK BALANCE AND BOOK BALANCE. A PERUSAL OF THESE STATEMENTS PRIMA FACIE SHOWS THAT THERE MAY BE MERIT IN THE SUBMISSIONS OF TH E ASSESSEE. ACCORDINGLY I AM OF THE VIEW THAT THIS ISSUE ALSO REQUIRES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY I SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE TH IS ISSUE AFRESH BY CONSIDERING THE DOCUMENTS, INFORMATION AND EXPLANATIONS THAT MAY BE FURNISHED BY THE ASSESSEE. AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE, THE AO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH LAW. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BE EN PRONOUNCED IN THE COURT ON 20 . 9 . 201 7. SD/ - (B.R.BASKARAN) ACCOUNTANT MEMBER MUMBAI ; DATED : 20 / 9 / 20 1 7 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT OM CREATIONS 4 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGIS TRAR) PS ITAT, MUMBAI