PRIMAL SENSES HOSPITALITY AND ENTERTAINMENT PRIVATE LIMITED , MUMBAI V. INCOME TAX OFFICER 13(1)(4), MUMBAI

ITA 213/MUM/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 0294 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 11 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-12-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 08-01-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AMIT PRATAP SINGH
• Keywords: Opportunity of being heard; Principle of natural justice; Reassessment proceedings; Set aside
• Section: 43B; 143(3); 13; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI , JM ITA NO. 213 /MUM/201 8 ( ASSESSMENT YEAR: 2007 - 08 ) PRIMAL SENSES HOSPITALITY AND ENTERTAINMENT PVT. LTD., C/O - MR. HIREN KARIA, DIRECTOR, FLAT NO. 301, KOKILA KUNJ, C - WING, PATEL NAGAR, KANDIWALI (WEST), MUMBAI - 400006. VS. I.T.O. - 13(1)(4), 261A, AAYAKAR BHAWAN, M.K. MARG, MUMBAI - 400020 PAN/GIR NO. AACCP 5026 G (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI RAHUL HAKANI REVENUE BY SHRI AMIT PRATAP S INGH (DR) DATE OF HEARING 11/10 / 2019 DATE OF PRONOUNCEMENT 20 / 12 /2019 / O R D E R PER: R.C. SHARMA, A.M. THIS IS THE APPEAL FILED BY THE ASSESSEE AGAINST THE EXPARTY ORDER OF THE LD. CIT(A) - 21 , MUMBAI DATED 12/08/2016 FOR THE A.Y. 2007 - 08 IN THE MATTER OF ORDER PASSED U/S 143(3) R.W.S. 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, THE ACT). IN THIS APPEAL, THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. GROUND NO. 1 : - ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LE ARNED COMMISSIONER (APPEALS) ERRED IN HOLDING THAT THE REASSESSMENT PROCEEDINGS OF THE APPELLANT WERE VALID EVEN THOUGH THE SAME WERE INITIATED BY THE LEARNED ASSESSING OFFICER WITHOUT SATISFYING THE MANDATORY JURISDICTIONAL CONDITIONS SET OUT IN SECTION 1 47 OF THE INCOME TAX ACT, 1961. ITA NO. 213 /MUM/201 8 PRIMAL SENSES HOSPITALITY & ENTERTAINMENT P LTD. VS ITO 2 2. GROUND NO. 2 : - ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN SUSTAINING THE ADDITION OF RS. 4,02,01,500/ - MADE BY THE LEARNED ASSESSING OFFICER U/S 68 OF THE INCOME TAX AC T, 1961 IN RESPECT OF ALLEGED UNEXPLAINED LOANS. THE LEARNED COMMISSIONER (APPEALS) HERE ALSO FAILED TO APPRECIATE THAT THE ABOVE AMOUNT OF RS, 4,02,01,500 INCLUDED (A) RS. 42,500 BEING SHARE APPLICATION MONEY, WHICH IS DOUBLY TAXED BECAUSE A SEPARATE AD DITION WAS MADE BY THE LEARNED ASSESSING OFFICER TOWARDS ALLEGED UNPROVED SHARE APPLICATION MONEY AND (B) RS. 2,000 BEING SHARE ALLOTMENT MONEY IN RESPECT OF SHARE CAPITAL WHICH WAS BEEN ACCEPTED BY THE LEARNED ASSESSING OFFICER AS GENUINE IN THE ASSESSMEN T. 3. GROUND NO . 3 : - ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN SUSTAINING THE ADDITION OF RS. 3,47,000/ - MADE BY THE LEARNED ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT, 1961 IN RESPECT OF ALLEGED UN PROVED SHARE APPLICATION MONEY. HERE, THE LEARNED COMMISSIONER (APPEALS) ALSO FAILED TO APPRECIATE THAT AS PER THE PROVISIONS OF SECTION 68 APPLICABLE FOR THE YEAR UNDER APPEAL AND JUDICIAL PRONOUNCEMENTS, AN ADDITION TOWARDS SHARE APPLICATION MONEY CANNOT BE MADE IN THE HANDS OF THE APPELLANT COMPANY. 4. GROUND NO. 4 : - ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APPEALS) ERRED IN SUSTAINING THE ADDITION OF RS. 14,13,145/ - MADE BY THE LEARNED ASSESSING OFFICER U/S 68 OF THE INCOME TAX ACT, 1961 IN RESPECT OF ALLEGED UNEXPLAINED SUNDRY CREDITORS. HERE, THE LEARNED COMMISSIONER (APPEALS) ALSO ERRED IN DISREGARDING THE APPELLANT'S CONTENTION IN APPEAL THAT THE SUNDRY CREDITORS INCLUDED GOVERNMENT DUES OF RS. 3,50,533/ - AND IN H OLDING THAT THE ADDITION WAS, IN ANY ITA NO. 213 /MUM/201 8 PRIMAL SENSES HOSPITALITY & ENTERTAINMENT P LTD. VS ITO 3 CASE, OTHERWISE MAINTAINABLE U/S 43B OF THE INCOME TAX ACT, 1961. 5. GROUND NO. 5 : - ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER (APP EALS) ERRED IN DIRECTING THE LEARNED ASSESSING OFFICE R TO VERIFY WHETHER CASH DEPOSITS TO THE EXTENT OF RS. 1 0,71,012 IN THE APPELLANT'S BANK ACCOUNTS WERE EXPLAINABLE FROM SALES RECEIPTS OF THE APPELLANT AND THEREBY LOSING SIGHT THAT THE APPELLANT MAY ALSO HAVE OTHER EXPLAINABLE SOURCES FOR THE CASH DEPOSIT S. 6. GROUND NO. 6 : - BOTH THE LEARNED COMMISSIONER (APPEALS) AND THE LEARNED ASSESSING OFFICER ERRED IN PASSING THEIR RESPECTIVE ORDERS WITHOUT GRANTING THE APPELLANT ADEQUATE OPPORTUNITY OF BEING HEARD. THE ORDERS PASSED BY THEM ARE IN CONTRAVENTION OF T HE PRINCIPLES OF NATURAL JUSTICE AND HENCE, BAD IN LAW. 7. GROUND NO 7 : - THE APPELLANT RESERVES RIGHT TO ADD, ALTER, AMEND OR DELETE ANY GROUNDS OF APPEALS WITH PERMISSION OF THE HON'BLE TRIBUNAL. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. I N THIS APPEAL ASSESSEE IS BASICALLY AGGRIEVED FOR THE EXPARTY ORDER PASSED BY THE CIT(A) WITHOUT GIVING OPPORTUNITY OF BEING HEARD. IT WAS CONTENDED BY THE LD. AR THAT BECAUSE OF THE HEAVY LOSSES, THE BUSINESS OF THE ASSESSEE WAS CLOSED DOWN AND THE REGIST ERED OFFICE WAS ALSO CHANGED FROM PATEL NAGAR, KANDIVILI(W), MUMBAI TO PUNE. AN AFFIDAVIT IN SUPPORT OF THE SAME WAS ALSO FILED ACCORDING TO WHICH BECAUSE OF HEAVY LOSSES , BUSINESS WAS CLOSED AND RE - LOCATED TO PUNE IN 2014. NO NOTICE ISSUED BY THE CIT(A) W AS SERVED ON THE ASSESSEE, THEREFORE, ASSESSEE COULD NOT APPEAR BEFORE THE CIT(A). AFTER GOING THROUGH THE AFFIDAVIT PLACED AT PAGES 6 - 13 OF THE PAPER BOOK DULY EXCLUDED ON THE NON JUDICIAL STAMP ITA NO. 213 /MUM/201 8 PRIMAL SENSES HOSPITALITY & ENTERTAINMENT P LTD. VS ITO 4 PAPER, WE ARE SATISFIED THAT THERE WAS SUFFICIENT CAUSE FOR NON - APPEARANCE BEFORE THE CIT(A) ON THE DATES FIXED FOR HEARING BEFORE CIT(A) . AS NONE OF THE NOTICES COULD BE SERVED ON THE ASSESSEE, ASSESSEE COULD NOT APPEAR BEFORE THE CIT(A). IN THE SUBSTANTIAL INTEREST OF JUSTICE, WE SET ASIDE THE EXPARTY ORDER OF THE CI T(A) AND RESTORE THE MATTER BACK OF HIS FILE FOR DECIDING AFRESH AND AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE. ASSESSEE IS ALSO DIRECTED TO APPEAR BEFORE CIT(A) WITHIN A PERIOD OF 60 DAYS FROM THE DATE OF RECEIPT OF THIS ORDER. WE DIRECT ACCORDINGLY. 3. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2 0 TH DECEMBER , 2019. SD/ - ( VIKAS AWASTHY ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED 20 / 12 /2019 *RANJAN COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//