VIJAY JAYANTILAL CHOKSI, MUMBAI V. ITO WD 19(2)(2), MUMBAI

ITA 192/MUM/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 3006 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 12-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 07-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DIPAK KUMAR SINHA
• Keywords: Opportunity of being heard
• Section: 143(3); 142(1); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI JASON P. BOAZ ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER ITA NO. 192/MUM/2014 (ASSESSMENT YEAR : 2009-10) VIJAY JAYANTLAL CHOKSI, 3 SATYAM BUILDING, 1 ST FLOOR, JUHUTARA ROAD, SANTACRUZ (WEST), MUMBAI 400 049 PAN:AAJPC 7858B ... APPELLANT VS. THE ITO, WARD 19(2)(2) , MUMBAI ..... RESPOND ENT APPELLANT BY : NONE RESPONDENT BY : SHRI DIPAK KUMAR SINHA DATE OF HEARING : 25/08/2016 DATE OF PRONOUNCEMENT : 16/09/2016 ORDER PER JASON P. BOAZ, A.M: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS)-18, MUMBAI DATED 29/10/2013 FOR ASSESS MENT YEAR 2009- 10. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER:- 2.1 THE ASSESSEE FILED HIS RETURN OF INCOME FOR ASS ESSMENT YEAR 2009- 10 ON 30/7/2009 DECLARING TOTAL INCOME OF RS.6,62,3 60/-. THE CASE WAS TAKEN UP, FOR SCRUTINY AND NOTICES UNDER SECTION 14 3(2) OF THE INCOME 2 ITA NO. 192/MUM/2014 (ASSESSMENT YEAR : 2009-10) TAX ACT, 1961 ( THE ACT) AND NOTICE UNDER SECTION 142(1) ALONGWITH QUESTIONNAIRE CALLING FOR CERTAIN DETAILS WERE ISSU ED ON 11/7/2011. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE F ILED ONLY SOME OF THE DETAILS CALLED FOR BUT FAILED TO SUBMIT THE BALANCE DETAILS REQUIRED IN SPITE OF REMINDERS ISSUED TO THE ASSESSEE. IN THA T VIEW OF THE MATTER, THE ASSESSING OFFICER NOTICED, FROM A PERUSAL OF TH E BALANCE SHEET OF THE ASSESSEE AS ON 31/3/2009, THAT UNSECURED LOANS AMOU NTING TO RS.12,44,467/- WAS TAKEN FROM THREE PARTIES. OBSER VING THAT THE ASSESSEE HAD FAILED TO FILE LOAN CONFIRMATIONS IN T HIS REGARD, THE VERACITY OF THE LOANS COULD NOT BE ASCERTAINED, HELD THE SAM E TO BE UNASCERTAINED LIABILITY AND BROUGHT THE SAME TO TA X IN THE ASSESSEES HANDS. THE ASSESSMENT ORDER WAS THEN COMPLETED UND ER SECTION 143(3) OF THE ACT VIDE ORDER DATED 29/12/2011 DETERMINING THE INCOME OF THE ASSESSEE AT RS.19,06,830/-; IN VIEW OF THE ADDITION S OF RS.12,44,467/- IN RESPECT OF UNEXPLAINED UNSECURED LOANS APPEARING IN THE ASSESSEES BALANCE SHEET AS ON 31/3/2009. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT FOR ASSESS MENT YEAR 2009- 10, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A) -18, MUMBAI. THE GROUNDS RAISED BY THE ASSESSEE BEFORE THE CIT(A ) ARE AS UNDER:- 1. THE LEARNED ASSESSING OFFICER HAS FAILED TO APP RECIATE THAT ALL AMOUNT HAS BEEN OUTSTANDING IN THE BOOKS OF ASSESSEE SINCE LON G TIME AND SAME WERE REFLECTED IN PREVIOUS BALANCE SHEET ALSO WHICH IS S UBMITTED TO THE ASSESSING OFFICER. 2. THE CONFIRMATION OF ACCOUNTS ARE ATTACHED HEREWI TH. 3 ITA NO. 192/MUM/2014 (ASSESSMENT YEAR : 2009-10) 2.3 THE CIT(A) DISMISSED THE ASSESSEES APPEAL HOLD ING AS UNDER AT PARAS 1.3 OF THE IMPUGNED ORDER DATED 29/10/2013:- 1.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPE LLANT ORDER OF THE A.O AND FACTS OF THE CASE CAREFULLY IT IS NOTICED THAT THE ASSESSEE HAS SHOWN UNSECURED LOANS OF RS.12,44,467/- FROM THREE DIFFERENT PARTIE S. THE A.O HAS ASKED THE ASSESSEE TO SUBMIT COMPLETE DETAILS WITH CONFIRMATI ONS AND COPIES OF LOAN ACCOUNTS OF THESE PARTIES. BUT THE ASSESSEE HAS F AILED TO SUBMIT THE CONFIRMATIONS AND OTHER REQUIRED DETAILS ALTHOUGH N UMBER OF OPPORTUNITIES WERE PROVIDED. THUS, THE A.O HAS TREATED THE AMOUN T OF RS.12,44,467/- AS UNEXPLAINED LIABILITY AND ADDED BACK TO THE TAXABLE INCOME. ON THE OTHER HAND, THE AR OF THE APPELLANT HAS SUBM ITTED THAT AS PER BALANCE SHEET IT HAS SHOWN UNSECURED LOANS OF RS.12,44,467/ - AND PHOTO COPY OF THREE CONFIRMATION LETTERS WERE ALSO FILED ALONG WI TH ITS REPLY WITHOUT ANY BANK STATEMENT BALANCE AND OTHER PARTICULARS. FROM THE PERUSAL OF THE SUBMISSIONS AND FACTS, IT I S AN UNDISPUTED FACT THAT THE AO HAS GIVEN A NUMBER OF OPPORTUNITIES TO THE ASSESSEE TO SUBMIT COMPLETE DETAILS AND CONFIRMATIONS OF UNSECURED LOA NS OF RS.12,44,467/- BUT THE ASSESSEE HAS FAILED TO SUBMIT CONFIRMATION BEFO RE THE A.O. EVEN DURING THE APPELLATE PROCEEDINGS, THE APPELLANT HAS FILED ONLY PHOTOS COPIES OF THREE CONFIRMATIONS WHICH ARE WITHOUT PAN NUMBER, BANK ST ATEMENT AND BALANCE SHEET OF THE CONCERNED PARTIES. AS PER THE PROVISI ONS OF SECTION 68 THE ONUS IS ALWAYS ON THE ASSESSEE TO SUBMIT COMPLETE DETAIL S TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE CREDITOR. BUT IN THE PRESENT CASE, THE ASSESSEE HAS FAILED TO SUBMIT ANY DOCUMENTARY E VIDENCE TO PROVE THESE CONDITIONS. TO STRENGTHEN THE VIEW OF THE RELIANCE IS PLACED ON THE FOLLOWING DECISION. (A) ROSHAN DI HATTI VS. CIT, 107 ITR 938 (SC) (B) CIT VS. DEVI PRASAD VISHWANATH PRASAD, 72 ITR 194(S C) (C) CIT VS. GANAPATI MUDALIAR, 53 ITR 623 (SC) (D) CIT VS. M.GOVINDARAJULU MUDALIAR VS. CIT, 34 ITR 80 7 (SC) (E) CIT VS. DURGA PRASAD MORE 72 ITR 807 (SC) (F) SUMAT DAYAL VS. CIT, 214 ITR 801 (SC) IN VIEW OF THE FACTS AND CIRCUMSTANCES AND VARIOUS COURT DECISIONS ON THIS ISSUE, IT IS HELD THAT THE APPELLANT HAS FAILED TO SUBMIT ANY DOCUMENTARY EVIDENCE TO PROVE THE GENUINENESS OF UNSECURED LOAN S, THEREFORE, THE ADDITION MADE BY THE A.O IS UPHELD AND GROUND OF AP PEAL IS DISMISSED. 4 ITA NO. 192/MUM/2014 (ASSESSMENT YEAR : 2009-10) 3. AGGRIEVED BY THE ORDER OF THE CIT(A) -18, MUMBAI DATED 29/10/2013 FOR ASSESSMENT YEAR 2009-10, THE ASSESSE E HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL RAISING THE FOLLOWI NG GROUNDS:- 1. THE HONOURABLE CIT(A) HAS FAILED TO APPRECIATE THAT ALL AMOUNT HAS BEEN OUTSTANDING IN THE BOOKS OF ASSESSEE SINCE LONG TIM E AND SAME WERE REFLECTED IN PREVIOUS BALANCE SHEET ALSO WERE DISAL LOWED AND MADE ADDITION. 2. THE CONFIRMATION OF ACCOUNTS ARE ATTACHED HEREW ITH. THE APPELLANT PRAYS LEAVE TO ALTER, AMEND OR ADD AN Y GROUNDS OR RELIEF BEFORE OR AT THE TIME OF HEARING THE APPEAL. 4. THE CASE WAS FIXED FOR HEARINGS ON ATLEAST SIX OCCASIONS, BUT THE CASE WAS EITHER NOT HEARD ON THE REQUEST OF THE ASS ESSEE FOR ADJOURNMENT OR NONE WAS PRESENT FOR ON BEHALF OF T HE ASSESSEE. ON 25/8/2016 WHEN THE CASE WAS CALLED FOR HEARING, NON E WAS PRESENT FOR THE ASSESSEE BUT THE LD. DEPARTMENTAL REPRESENTATIV E WAS PRESENT AND READY TO ARGUE THE CASE. IN THE CIRCUMSTANCES, AS LAID OUT ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE IS NOT INTERESTED IN SERIOUSLY PURSUING THIS APPEAL AND, THEREFORE, PROC EED TO DISPOSE THIS APPEAL WITH THE ASSISTANCE OF THE LD. DEPARTMENTAL REPRESENTATIVE AND THE MATERIAL ON RECORD. 5. THE LD. DEPARTMENTAL REPRESENTATIVE WAS HEARD A ND HE PLACED STRONG RELIANCE ON THE ORDERS OF THE AUTHORITIES BE LOW IN HOLDING AND CONFIRMING THE ADDITION OF RS.12,44,467/- IN RESPEC T OF UNSECURED LOANS OF THREE PARTIES AS UNEXPLAINED UNSECURED LOANS UND ER SECTION 68 OF THE ACT. 6.1 WE HAVE HEARD THE LD. DEPARTMENTAL REPRESENTATI VE AND PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON R ECORD. ACCORDING TO THE ASSESSING OFFICER , THE VERACITY OF THE UNSECUR ED LOANS AMOUNTING TO 5 ITA NO. 192/MUM/2014 (ASSESSMENT YEAR : 2009-10) RS.12,44,467/- TAKEN FROM THREE PARTIES, AS REFLECT ED IN THE ASSESSEES BALANCE SHEET AS ON 31/3/2009, CANNOT BE ASCERTAINE D AND, THEREFORE, BEING UNEXPLAINED WERE TO BE BROUGHT TO TAX UNDER S ECTION 68 OF THE ACT AS INCOME OF THE ASSESSEE. 6.2 ON APPEAL, THE CIT(A) HAS CONFIRMED THE SAID AD DITION MADE BY THE ASSESSING OFFICER . WE HAVE EXTRACTED THE GROU NDS OF APPEAL RAISED BY THE ASSESSEE BEFORE THE CIT(A) IN PARA 2.2 OF TH IS ORDER(SUPRA) AND THE CIT(A)S FINDING THEREON AT PARA 2.3 OF THIS ORDER(SUPRA). THE REASON FOR THIS EXTRACTION IS THAT, A PERUSAL OF TH E GROUNDS VIS--VIS THE CIT(A)S FINDING WILL ESTABLISH THAT THE CIT(A) HAS ACTUALLY NOT ADDRESSED OR ADJUDICATED THE GROUNDS RAISED BY THE ASSESSEE. IN THE GROUNDS RAISED BEFORE CIT(A) (SUPRA), THE ASSESSEE CONTENDS THAT THE ASSESSING OFFICER HAD MADE THE ADDITION ON ACCOUNT OF UNSECUR ED LOANS OUTSTANDING IN THE ASSESSEES BALANCE SHEET AS ON 3 1/3/2009, WITHOUT APPRECIATING THE FACT THAT ALL THE SAID AMOUNT OF U NSECURED LOANS OUTSTANDING AS ON 31/3/2009 ARE OUTSTANDING IN THE ASSESSEES BOOKS OF ACCOUNT FOR A LONG TIME AND ARE REFLECTED IN PREVIO US YEARS BALANCE SHEETS, WHICH HAVE BEEN SUBMITTED TO THE ASSESSING OFFICER. IN OUR CONSIDERED VIEW A PERUSAL OF THE CIT(A)S FINDING I N THE IMPUGNED ORDER(SUPRA) WOULD CLEARLY ESTABLISH THAT THE CIT(A ) HAS NOT EXAMINED, VERIFIED OR ADDRESSED THE GROUND RAISED BY THE ASSE SSEE AND REGRETTABLY WITHOUT ANY APPLICATION OF MIND HAS PARROTED THE FINDING OF OF THE CIT(A). THIS FINDING IN OUR VIEW, IS A TRAVESTY JUSTICE AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS LAID OUT ABOVE, TH E IMPUGNED ORDER OF THE CIT(A) BECOMES UNSUSTAINABLE, AS HE HAS FAILED TO EXAMINE AND VERIFY THE CONTENTIONS PUT FORTH BY THE ASSESSEE IN THE GROUND RAISED BEFORE HIM. IN THE EVENT THE SAID UNSECURED LOANS FROM THREE PARTIES 6 ITA NO. 192/MUM/2014 (ASSESSMENT YEAR : 2009-10) ARE FOUND TO BE OLD LOANS AND PERTAIN TO A PERIOD P RIOR TO THE YEAR UNDER CONSIDERATION, AS CONTENDED BY THE ASSESSEE, THEN T HE ADDITION UNDER SECTION 68 OF THE ACT AS UPHELD BY THE CIT(A) CANNO T BE MADE OR SUSTAINED. IN THIS VIEW OF THE MATTER, WE ARE CONS TRAINED IN THE INTEREST OF EQUITY AND JUSTICE TO SET ASIDE THE FINDING IN T HE IMPUGNED ORDER OF THE CIT(A) AND RESTORE THE MATTER TO HIS FILE TO CO NSIDER AND ADJUDICATE THE GROUNDS RAISED BEFORE HIM (SUPRA) AFTER CAUSING NECESSARY ENQUIRES IN THE MATTER AND AFTER AFFORDING THE ASSESSEE ADEQ UATE OPPORTUNITY OF BEING HEARD AND TO FILE DETAILS/SUBMISSIONS IN THIS REGARD. WE HOLD AND DIRECT ACCORDINGLY. CONSEQUENTLY, GROUNDS RAISED B Y THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE ASSESSEES APPEAL FOR ASSESSM ENT YEAR 2009-10 IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16/09/2016 SD/- SD/- (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI, DATED 16/09/2016 VM , SR. PS 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