M/S. ICONIC CHANDRAKANT PRODUCTIONS PVT. LTD, MUMBAI V. ACIT-16(1) , MUMBAI

ITA 2108/MUM/2021

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 6369 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2016-2017
• Appeal Filed On: 17-11-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI PRASHANT MAHARSHI (ACCOUNTANT MEMBER) & SMT. KAVITHA RAJAGOPAL (JUDICIAL MEMBER) ITA 2108/Mum/2021 (Assessment year 2016-17) M/s Iconic Chandrakant Productions Private Limited, C/o ND’s Art World S.No.14/3, 15/3, 17/2, ND Studio, Chowk Phata, Karjat, Khalapur, Raigad-410 206 PAN : AABCC5497P vs ACIT-16(1), Mumbai 4 th Floor, Aayakar Bhavan M.K. Road, Mumbai Assessee represented by Dharan Gandhi Department represented by Shri Nihar Ranjan Samal, Sr.AR Date of hearing 23/06/2022 Date of pronouncement 16/09/2022 ORDER Per Kavitha Rajagopal (JM): This appeal has been filed by the assessee as against the order of the Ld.Commissioner of Income-tax (Appeals)-4, Mumbai dated 06/02/2020 pertaining to assessment year 2016-17. 2. During the appellate proceedings, the Ld.AR for the assessee contended that there is a delay of 40 days in filing the appeal, has to be condoned after considering the decision of the Hon’ble Supreme Court in Writ Petition (C) No.3 of 2020 judgement dated January 10, 2022 whereby the same would be covered under the Covid Protocol due to pandemic declared by the Hon’ble 2 ITA No. 2108/MUM/2021 Supreme Court while determining the period of limitation.The Ld.AR contended that the 40 days’ delay has to be condoned for the reason that the office address in which the notices / order under section 250 were sent was closed since April, 2019 and that the registered office of the assessee was shifted in July 2019 to the new address at C/o ND’s Art World, S.No.14/3, 15/3, 17/2, ND Studio, Chowk Phata, Karjat, Khalapur, Raigad-410 206. 3. The Ld.DR opposed the condonation of delay. 4. Having heard the rival parties and perused the materials on record. We deem it fit to condone the delay in filing the appeal as there was ‘sufficient cause’ for the delay in filing the appeal within the due date. 5. The solitary issue involved in this appeal is that the Ld.CIT(A) has erred in confirming the addition made by the Assessing Officer towards unpaid creditors of Rs.2,09,60,832/- under section 41(1) of the I.T. Act, 1961 by way of an exparte order. 6. The brief facts are that the assessee is in the business of production of television serials and movies and also engaged in event management. The assessee company filed its return of income at Nil by claiming current year’s loss at (-) Rs.1,80,91,077/-. The assessee’s case was selected for scrutiny and assessment order under section 143(3) of the I.T. Act dated 23/12/2018 was passed determining total income at Rs.28,69,755/- and by making an addition of Rs.2,09,60,832/- as trading liability which ceased to exist as per the provisions of section 41(1) of the I.T. Act by treating the same as cessation of liability. The Assessing Officer has added the said amount on the ground that the same was outstanding for a long period in respect of 28 creditors, the details of which are as under:- S.No. Name of the Creditor Amount 3 ITA No. 2108/MUM/2021 1. Audioarts 404496 2. Everest Entertainment Pvt Ltd 87467 3 Film Lab (I) Pvt Ltd 495815 4. Ganesh Octroi Services 3022 5. Gurukrupa Caterers 186393 6. L R Mallah 600555 7. MKIM Catering Services 491993 8. Morani Fireworks & Six 1080000 9. Mukesh Cine Art Enterprises Pvt Ltd 1310853 10. Munjal Themes-N-Occasions Pvt Ltd 6557931 11. Nikhiraj Wood Products Pvt Ltd 157145 12. NSE Events 156015 13. Poornima Oak 103030 14. Prashant Khedekar 35000 15. Sadanand Shetty 31500 16. Services India 828852 17. Shyam Pandurang Bhagat 845200 18. Sunita Fabrication Work 600003 19. Techno Fabrication Works 1371250 20. Ulhas Sahasrabuddhe 2125293 21. Vijay V Rajwade 28652 22. CVK & Associates 239291 23. Jai Santoshi Tradex Pvt Ltd 272817 24. Jess Ideas Pvt Ltd 1876451 25. Maharashtra Traders 275810 26. Rapid Systems 30845 27. Santosh Paint & Hardware 748615 28. Shri & Co 16538 The Assessing Officer has held that the assessee has failed to furnish details such as addresses, PAN, etc. of the above mentioned creditors and have only submitted the name of the creditors, whose balances were outstanding for preceding two years. The Assessing Officer has made the addition on the ground that the assessee has failed to furnish documentary evidences in support of the said transactions and had added the impugned amounts to the total income of the assessee. Aggrieved by this, the assessee was in appeal 4 ITA No. 2108/MUM/2021 before the Ld.CIT(A), who confirmed the impugned addition made by the Assessing Officer. The Ld.CIT(A) has passed the order on 06/02/2022 exparte on the background that inspite of sufficient opportunities, the assessee has refrained from appearing before him. Aggrieved, the assessee is in appeal before us. 7. The Ld.AR for the assessee contended that the assessee was unable to present its case before the Ld.CIT(A) and further stated that the assessee has got a good case in its favour and prayed that the same may be restored to the file of the Ld.CIT(A). The Ld.AR further stated that the assessee has subsequently made payments to the creditors mentioned in the assessment order and has consented to furnish details of PAN and addresses of the creditors before the Ld.CIT(A) for verification. 8. The Ld.DR had nothing to controvert the same. 9. Having heard both the rival submissions and perused the materials on record, it is evident that the assessee has not denied the transaction with the creditors mentioned above. The assessee’s grievance that the assessee needs one more opportunity to furnish the details of the creditors is considered justifiable. Considering the same, we are of the opinion that the assessee may be given one last opportunity to present its case before the Ld.CIT(A) by furnishing all the relevant documentary evidence to substantiate his claim. We hereby set aside the appeal to the file of the Ld.CIT(A). 10. In the result, the appeal filed by the assessee is allowed for statistical purpose. 5 ITA No. 2108/MUM/2021 Order pronounced in the open Court on 16 th day September, 2022. Sd/- sd/- (PRASHANT MAHARSHI) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 16/09/2022 Pavanan 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