PRAKASH S. MADIA, MUMBAI V. ITO 25(3)(3), MUMBAI

ITA 2017/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1881 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 02-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 14-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Source of fund
• Section: 142(1); 131; 6; 11; 144

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUM BAI BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.2017/M/13 ( / ASSESSMENT YEAR: 2006-07) SHRI PRAKASH S. MADIA 4C/12, BAZGEEGAY CO-OP HSG SOC. SAIBABA NAGAR, BORIVALI (W) MUMBAI 400 092 / VS. ITO 25(3)(3) BANDRA (EAST) MUMBAI ./ ./ PAN/GIR NO. : AAOPM7998R ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 02.12.2015 !' /DATE OF PRONOUNCEMENT: 16.12.2015 #$ / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST T HE ORDER DATED 20.03.2012 PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-35, MUMBAI [HEREINAFTER REFERRED TO AS THE LEARNED CIT(A)] R ELEVANT TO THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING POINTS: 1. THAT THE ORDER OF THE LEARNED CIT(A) IS WRONG AGAINST THE LAW AND FACTS WITH REGARD TO CONFIRMING THE NET ASSESSEE BY: SHRI KASHYAP PADIA DEPARTMENT BY: SHRI SHIDDARAMAPPA KAPPATTA NARVAR ITA NO. 2017/M/13 A.Y. 2006-07 2 PROFIT @ 12% ON THE SALES OF RS.49,51,44,527/- AMOU NTING TO RS.5,94,17,343/- U/S 144 R.W.S 145(3). 2. THAT THE LEARNED CIT(A) HAS ERRED WITH REGARD TO CONFIRMING THE ADDITION OF A SUM OF RS.7,50,000/- A S UNDISCLOSED SOURCES OF INCOME. 3. THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF A SUM OF RS.18,91,274/- AS UNEXPLAI NED LOANS. THE OTHER ISSUES ARE GENERAL IN NATURE NOWHERE RAIS ED ANY SPECIFIC POINT TO BE DECIDED. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FIL ED THE RETURN OF INCOME DECLARING THE TOTAL INCOME TO THE TUNE OF RS.5,70,9 71/- ON 30.10.2006. THE RETURN WAS ACCOMPANIED BY AUDIT REPORT IN FORM NO. 3CB & 3 CD AS REQUIRED U/S.44AB OF THE OF THE INCOME TAX ACT, 1961( IN SHORT THE A CT) ALONG WITH AUDITED COPY OF P&L A/C., BALANCE SHEET, STATEMENT OF ACCOUNTS ETC. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY. THE CASE WAS FINALLY ASSESS ED AT RS.6,20,81,650/-. THE ASSESSMENT WAS FINALIZED IN VIEW OF THE SECTION 144 R.W.S 145(3) OF THE ACT. THE ASSESSEE FAILED TO APPEAR BEFORE THE ASSESSING OFFI CER DESPITE RECEIPT OF THE NOTICE U/S. 143(2) OF THE ACT AT ELEVEN OCCASIONS ON NUMBE R OF DATES. LIST OF DATES ARE TABULATED. SR. NO SECTION UNDER WHICH NOTICE IS ISSUED DATE OF NOTICE DATE OF COMPLIANCE REMARKS 1 NOTICE U/S 142(1) OF THE I.T.ACT 1961 ALONG WITH A DETAILED QUESTIONNAIRE 07.02.2008 19.02.2008 NEITHER ANY BODY HAS ATTENDED NOR ANY ADJOURNMENT WAS SOUGHT. 2 THIS OFFICE LETTER / NOTICE U/S 142(1) OF THE I.T.ACT 1961 10.03.2008 14.03.2008 -DO- ITA NO. 2017/M/13 A.Y. 2006-07 3 3 PENALTY NOTICE U/S 271(1)(B) OF THE I.T.ACT 1961 10.03.2008 14.03.2008 -DO- 4 SUMMONS U/S 131 OF THE I.T.ACT 1961 10.03.2008 14.03.2008 -DO- 5 (SIC) PENALTY OF RS.10000/- WAS LEVIED BY AN ORDER U/S 271(1)(B) OF THE OF THE I.T.ACT 1961 27.03.2008 -- -- 6 SUMMONS U/S 131 OF THE I.T.ACT 1961 16.04.2008 29.04.2008 -DO- 7 PENALTY NOTICE U/S 271(1)(B) OF THE I.T.ACT 1961 16.04.2008 29.04.2008 -DO- 8 THIS OFFICE LETTER / NOTICE U/S 142(1) OF THE I.T.ACT 1961 26.09.2008 08.10.2008 -DO- 9 THIS OFFICE LETTER / NOTICE U/S OF THE I.T.ACT 1961 17.10.2008 24.10.2008 -DO- 10 THIS OFFICE LETTER / NOTICE U/S OF THE I.T.ACT 1961 04.11.2008 12.11.2008 -DO- 11 SUMMONS U/S 131 OF THE I.T.ACT 1961 17.11.2008 24.11.2008 -DO- 4. IN THE ASSESSMENT, ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 145(3) OF THE ACT AND MADE EX-PARTE ASSESSMENT. AS SESSING OFFICER MADE ADDITION ESTIMATING THE NET PROFIT @ 12% ON THE SALES OF RS. 49,52,00,000/- (ROUNDED OFF). ASSESSING OFFICER MADE MANY OTHER ADDITIONS AND DET ERMINED THE ASSESSED INCOME AT RS.6,20,81,650/- AGAINST THE RETURN INCOME OF RS .5,70,917/-. THE ORDER IS PASSED U/S 144 R.W.S 145(3) OF THE ACT. 5. AGGRIEVED WITH THE SAID ORDER OF THE ASSESSING O FFICER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LEARNED CIT(A) AGAINST ALL ADDITI ONS MADE IN THE ASSESSMENT. ASSESSEE ALSO APPEARED BEFORE THE LEARNED CIT(A) AL ONG WITH THE AR AS PER DISCUSSION IN PARA 3 OF THE IMPUGNED ORDER. LEARNE D CIT(A) REMANDED THE MATTER TO THE ASSESSING OFFICER PARA 3 & 4 DESCRIBES THE D ETAILS IN THIS REGARD. SUBSEQUENTLY, NONE APPEARED FOR THE ASSESSEE BEFORE THE LEARNED CIT(A). EVENTUALLY, LEARNED CIT(A) EXTRACTED THE ASSESSING OFFICERS ORDER AND ALSO THE REMAND REPORT IN HIS ORDER AND UPHELD THE ASSESSING OFFICERS ADDITION VIDE PARA 7. THE SAME READS AS UNDER: ITA NO. 2017/M/13 A.Y. 2006-07 4 ON GOING THROUGH THE BALANCE SHEET OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION, IT IS NOTICED THAT ASSESSEE HAS SHOWN LOANS ADVANCED TO THE TUNE OF RS.24,12,432/- AS AGAINST A SUM OF RS.5,21,158/- SHOWN FOR THE EARLIER A.Y.2005-06. FROM THIS, IT IS QUITE APPARENT THAT DURING THE PERIOD UNDER CONSIDERATION ASSESSEE HAS ADVANCED NEW LOANS TO THE TUNE OF RS.18,91,274/- (RS.24,12,432 - RS.5,21,158). IN THE ABSENCE OF ANY DETAILS / DOCUMENTARY EVIDENCES WITH REGARD TO THE SOURCE OF THESE ADVANCES, THE SAME ARE ALSO TREATED AS ADVANCED OUT OF UNDISCLOSED SOURCES OF THE ASSESSEE AND ACCORDINGLY, THE ABOVE SAID SUM OF RS.18,91,274/- IS ADDED BACK TO HIS TOTAL INCOME. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE I.T.ACT AR E INITIATED SEPARATELY. FROM THE PERUSAL OF THE ORDER OF THE LEARNED CIT(A) , WE FIND THE SAME IS NOT PASSED AS PER PROVISION OF 250(6) OF THE ACT. HE MERELY E XTRACTED THE ORDER AND REMAND REPORT OF THE ASSESSING OFFICER. WE CANNOT CONSIDE R THE IMPUGNED ORDER AS A SPEAKING ORDER. 6. THEREFORE, WE ARE OF THE OPINION, IT IS IN THE I NTEREST OF JUSTICE THE LEARNED CIT(A) NEED TO PASS A SPEAKING ORDER AND IN ACCORDA NCE WITH THE LAW. LEARNED CIT(A) SHALL GRANT REASONABLE OPPORTUNITY TO THE A SSESSEE AS PER THE SET PRINCIPLES. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HER EBY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DECEMBER , 2015. SD/- SD/- (D.KARUNAKARA RAO) (AMARJIT SINGH) # / ACCOUNTANT MEMBER %& # /JUDICIAL MEMBER ' ( MUMBAI; )# DATED : 16 TH DECEMBER, 2015 MP MP MP MP ITA NO. 2017/M/13 A.Y. 2006-07 5 ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. * ( ) / THE CIT(A)- 4. * / CIT 5. -./ &&01 , 01' , ' ( / DR, ITAT, MUMBAI 6. /34 5 / GUARD FILE. / BY ORDER, - & //TRUE COPY// '/( ) (DY./ASSTT. REGISTRAR) , ' ( / ITAT, MUMBAI