ACIT 12(3), MUMBAI V. M.B. DEVELOPMENT CORPORATION, MUMBAI

ITA 2192/MUM/2011

• Counselvise Citation: 219219914 RSA 2011
• Duration Of Justice: 1 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2012
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 26-07-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 17-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIWAS RAO
• Assessee Lawyers: VIMAL PUNMIYA
• Keywords: Unexplained expenditure; Depreciation; Corroborative evidences
• Section: 32; 68; 69C; 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 2119/MUM/2011 ASSESSMENT YEAR 2006-07 THE INCOME TAX OFFICER 12(3)(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS. M/S. BHATTAD BROTHERS, 104, BAJAJ BHAVAN, NARIMAN POINT, MUMBAI 400 021. PAN: AABFB 8501 E ITA NO. 2192/MUM/2011 ASSESSMENT YEAR 2006-07 THE ASST. COMMISSIONER OF INCOME TAX 12(3),R.NO. 135, 1 ST FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020. VS. M/S. M.B. DEVELOPMENT CORPORATION, 104, BAJAJ BHAVAN, NARIMAN POINT, MUMBAI 400 021. PAN: AACFM 9936 D ITA NO. 2193/MUM/2011 ASSESSMENT YEAR 2006-07 THE ASST. COMMISSIONER OF INCOME TAX 12(3), R.NO. 135, 1 ST FLOOR,AAYAKAR BHAVAN, MUMBAI 400 020. VS. M/S. HARI CONSTRUCTION, 104, BAJAJ BHAVAN, NARIMAN POINT, MUMBAI 400 021. PAN: AABFH 1212 L ITA NO. 2194/MUM/2011 ASSESSMENT YEAR 2006-07 THE DY. COMMISSIONER OF INCOME TAX 12(3), R.NO. 137, 1 ST FLOOR, AAYAKAR BHAVAN, MUMBAI 400 020. VS. SHRI LAXMINARAYAN R. BHATTAD, SHRI BHAGWANDAS R. BHATTAD, SHRI HARISHKUMAR R. BHATTAD SHRI HARIKISHAN R. BHATTAD LEGAL HEIR OF SHRI R.M. BHATTAD, PROP. M/S. R.M. BHUTTER & CO.,104, BAJAJ BHAVAN, NARIMAN POINT, MUMBAI 400 021. PAN: AABPG 2581 P ITA NO. 2119/MUM/2011 ITA NO. 2192/MUM/2011 ITA NO. 2193/MUM/2011 ITA NO. 2194/MUM/2011 ITA NO. 2275/MUM/2011 ITA NO. 1107/MUM/2011 2 ITA NO. 2275/MUM/2011 ASSESSMENT YEAR 2006-07 THE INCOME TAX OFFICER 12(3) (1) , AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS. M/S. M.B. CONSTRUCTIONS, 104, BAJAJ BHAVAN, NARIMAN POINT, MUMBAI 400 021. PAN: AACFM 9937 C ITA NO. 1107/MUM/2011 ASSESSMENT YEAR 2006-07 LATE MR. R.M. BHATTAD, PROP. OF M/S. R.M. BHUTTER & CO., 104, BAJAJ BHAVAN, NARIMAN POINT, MUMBAI 400 021. PAN: AAHPB 4385 L VS. THE ASST. COMMISSIONER OF INCOME TAX 12(3), MUMBAI. (APPELLANT ) (RESPONDENT) REVENUE BY : SHRI GOLI SRINIWAS RAO ASSESSEE BY : SHRI VIMAL PUNMIYA DATE OF HEARING : 23-07-2012 DATE OF PRONOUNCEMENT : 25-07-2012 ORDER PER BENCH: FOLLOWING GROUNDS OF APPEALS WERE RAISED IN T HE APPEALS FILED BY THE ASSESSING OFFICER (AO) AGAINST THE ORDERS DT. 21-12-2010 OF C IT(A)-23, MUMBAI. ITA/2119/M/11-BHATTAD BROTHERS 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. L,75,400/ MADE BY THE AO ON ACCOUNT OF LEGAL AND PROFESSIONAL CHARGES. 1.A.WHILE DOING SO, THE LD. CIT.(A) FAILED TO APPRE CIATE THE FACT THAT WITH RESPECT TO ASSESSEES CLAIM FOR RENDERING SUPERVISION SERVICES TO ITS SIS TER CONCERN NO DETAILS AND DOCUMENTARY EVIDENCE SUPPORTING THE EXPENDITURE HAS BEEN FURNIS HED BY THE ASSESSEE: 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCES OF RS. 36,74,422/ ON ACC OUNT OF PAYMENT OF SALARY AS EXPENSES. ITA NO. 2119/MUM/2011 ITA NO. 2192/MUM/2011 ITA NO. 2193/MUM/2011 ITA NO. 2194/MUM/2011 ITA NO. 2275/MUM/2011 ITA NO. 1107/MUM/2011 3 2.A. WHILE DOING SO, THE LD. CIT.(A) FAILED TO APPR ECIATE THE FACT THAT THE ASSESSEE HAS NEITHER CARRIED OUT ANY BUSINESS ACTIVITY NOR ESTABLISHED T HE NEXUS OF THE SAID EXPENSES. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT (A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ITA/2192/M/11-M.B.DEVELOPMENT CORPORATION- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF EXPENSES OF RS. 1,12,2 7,810/-. 1.A. WHILE DOING SO, THE LD.CIT(A) ERRED IN APPRECI ATING THE FACT THAT THE ASSESSEES CLAIM OF VARIOUS EXPENSES AGAINST THE COMPENSATION RECEIVED FROM M/S. R.M. BHUTTER & CO. IS ONLY TO REDUCE RECEIPTS BY BOOK ENTRIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN APPRECIATING THE FACT THAT NO BUSINESS CONNECTION E XIST BETWEEN THE ASSESSEE AND ITS SISTER CONCERN NOR ANY SERVICES RENDERED BY THE ASSESSEE T O ITS SISTER CONCERN. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE IGNORING THE FACT T HAT NO SUCH EXPENSES WERE REIMBURSED EITHER IN THE PRECEDING YEAR OR IN THE SUCCEEDING YEAR. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN APPRECIATING THE FACT THAT THE EXPENSES INCURRED BY THE ASSESSEE ONLY ON THE BASIS OF SELF MADE VOUCHERS AND SUPPORTED INTERNAL VOUCHERS. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE WITHOUT APPRECIATIN G THE FACT THAT MERELY COMPARING THE PROFIT RATIO AND DISREGARDING THE ABOVE FACTORS, NOTICED D URING THE COURSE OF SURVEY AND ONLY NULLIFIED BY THE ASSESSEE BY WAY OF BOOK ENTRIES. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION MADE IN THE ASSESSEES CASE B Y FOLLOWING ITS OWN APPELLATE ORDER DT.2L.L2.20L0 IN THE CASE OF R.M. BHATTAD IGNORING THE FACT THAT THE DECISION OF CIT(A) IN THIS CASE IS CHALLENGED AND THE SAME IS SUBJECT MATTER O F APPEAL BEFORE THIS HONBLE TRIBUNAL. 7. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 8. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. ITA/2193/M/11-HARI CONSTRUCTION- 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS.2,63,45,966/- MADE BY T HE AO AS UNEXPLAINED EXPENDITURE U/S.69. 1.A. WHILE DOING SO, THE LD.CIT(A) FAILED TO APPREC IATE THE FACT THAT EXPENSES CLAIMED ARE UNVERIFIABLE AND WITHOUT SUPPORTING DOCUMENTARY EVI DENCE TO SUBSTANTIATE THE CLAIM. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN GRANTING RELIEF TO THE ASSESSEE IGNORING THE FACT T HAT NO SUCH EXPENSES WERE REIMBURSED EITHER ITA NO. 2119/MUM/2011 ITA NO. 2192/MUM/2011 ITA NO. 2193/MUM/2011 ITA NO. 2194/MUM/2011 ITA NO. 2275/MUM/2011 ITA NO. 1107/MUM/2011 4 IN THE PRECEDING YEAR OR IN THE SUCCEEDING YEAR NOR ANY SERVICES RENDERED TO THE SISTER CONCERN. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN GRANTING RELIEF TO THE ASSESSEE IGNORING THE FACT T HAT NO BUSINESS CONNECTION EXIST BETWEEN THE ASSESSEE AND ITS SISTER CONCERN M/S. R.M. BHUTTER & CO. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN GRANTING RELIEF TO THE ASSESSEE IGNORING THE FACT T HAT THE REIMBURSEMENT OF THE EXPENSES IS ONLY TO JUSTIFY TO REDUCE THE PROFIT MERELY BY BOOK ENTR IES WHICH ARE NOT DETERMINATIVE OF TAXABLE INCOME. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD.CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE WITHOUT APPRECIATIN G THE FACT THAT MERELY COMPARING THE PROFIT RATIO AND DISREGARDING THE ABOVE FACTORS, NOTICED D URING THE COURSE OF SURVEY AND ONLY NULLIFIED BY THE ASSESSEE BY WAY OF BOOK ENTRIES. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION MADE IN THE ASSESSEES CASE B Y FOLLOWING ITS OWN APPELLATE ORDER DT.21.12.2010 IN THE CASE OF R.M. BHATTAD IGNORING THE FACT THAT THE DECISION OF CIT(A) IN THIS CASE IS CHALLENGED AND THE SAME IS SUBJECT MATTER O F APPEAL BEFORE THIS HONBLE TRIBUNAL. 7. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 8. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY ITA/2194/M/11-R.M.BHATTAD- 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE DISALLOWANCE OF SALARY OF RS. 1,42,40, 864/- AND WAGES OF RS. 2,52,00,000/-. 1.A. WHILE DOING SO, THE LD. CIT(A) FAILED TO APPR ECIATE THE FACT THAT THE EXPENSES CLAIMED ARE SELF MADE, UNNUMBERED AND UNSUPPORTED INTERNAL VOUC HERS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN GRANTING RELIEF TO THE ASSESSEE IGNORING THE FACT T HAT NO SUCH EXPENSE WAS REIMBURSED EITHER IN THE PRECEDING YEAR OR IN THE SUCCEEDING YEARS. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CITR(A) ERRED IN GRANTING RELIEF TO THE ASSESSEE IGNORING THE FACT T HAT NO BUSINESS CONNECTION EXIST BETWEEN ASSESSEE AND ITS SISTER CONCERNS NOR RENDERED ANY S ERVICE TO THE SISTER CONCERN. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) ERRED IN GRANTING RELIEF TO THE ASSESSEE IGNORING THE FACT T HAT THE REIMBURSEMENT OF EXPENSES IS ONLY TO JUSTIFY THE REDUCE PROFIT MERELY BY BOOK ENTRIES WH ICH ARE NOT DETERMINATIVE OF TAXABLE INCOME. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID CIT(A) ERRED IN ALLOWING RELIEF TO THE ASSESSEE WITHOUT APPRECIATIN G THE FACT THAT MERELY COMPARING THE PROFIT RATIO AND DISREGARDING THE ABOVE FACTORS, NOTICED D URING THE COURSE OF SURVEY AND ONLY ITA NO. 2119/MUM/2011 ITA NO. 2192/MUM/2011 ITA NO. 2193/MUM/2011 ITA NO. 2194/MUM/2011 ITA NO. 2275/MUM/2011 ITA NO. 1107/MUM/2011 5 NULLIFIED BY THE ASSESSEE BY WAY OF BOOK ENTRIES. 6. ON FACTS AND IN THE CIRCUMSTANCES OF THE CASE AN D IN LAW, THE LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 2 1,80,005/- PAID TO SISTER CONCERN M/S. SEVEN SEAS MARKETING PVT LTD AND M/S ALY SEEDS SYSTEM INDIA PVT. LTD. FALLING U/ S 40A(2)(B) EVEN THOUGH NO BUSINESS CONNECTION EXISTED BETWEEN THE ASSESSEE AND THE SIS TER CONCERN AND IGNORING THE FACT THAT THE SAID M/S. SEVEN SEAS MKTG. PVT LTD IS DEFUNCT COMPA NY AND NO GENUINENESS OR NEXUS OR REASONABLENESS IS ESTABLISHED BY THE ASSESSEE. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID. CITA) ERRED IN DELETING THE DISALLOWANCE OF RS. 14,37,765/- ON ACCOUNT OF F REIGHT CHARGES IGNORING THE FACT THAT ASSESSEE HAS FAILED TO SUBSTANTIATE THE EXPENSES WI TH SUPPORTING BILLS AND VOUCHERS. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE ID CIT(A) ERRED IN DELETING THE DISALLOWANCE OF UNEXPLAINED EXPENDITUR E U/S 69C OF RS. 15,76,255/- IGNORING THE FACT THAT NO SUPPORTING EVIDENCE WERE PRODUCED BY T HE ASSESSEE BEFORE THE A.O. AND THEREBY ADMITTING NEW EVIDENCE UNDER RULE 46A. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE4 LD. CIT(A) ERRED IN DELETING THE DISALLOWANCE OF RS. 32,86,955/- ON ACC OUNT OF DEPRECIATION ON CLOSING STOCK EVEN THOUGH NO SUCH PROVISION EXIST IN RESPECT OF DEPREC IATION U/S 32 READ WITH RELEVANT RULES AND THAT TOO MADE ON ADHOC BASIS WITHOUT ANY JUSTIFICAT ION. 10. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A ) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 11. APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW WHICH MAY BE NECESSARY. ITA/2275/M/11-M.B.CONSTRUCTION- 1.ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN ALLOWING EXPENDITURE OF RS. 26,43,861/- ON ACCOUNT OF LEGAL AND PROFESSIONAL CHARGES, BUSINESS PROMOTION, MISCELLANEOUS EXPENSES AND REPA IRS AND MAINTENANCE EXPENSES WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE ITS CLAIM OF EXPENSES DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION MADE IN THE ASSESSEES CASE B Y FOLLOWING ITS OWN APPELLATE ORDER DTD. 2 1/12/2010 IN THE CASE OF M/S. R.M. BHATTAD IGNO RING THE FACT THAT THE DECISION OF CIT(A) IN THIS CASE IS CHALLENGED AND THE SAME IS SUBJECT MAT TER OF APPEAL BEFORE THIS HONBLE TRIBUNAL. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT (A) ON THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY ITA NO. 2119/MUM/2011 ITA NO. 2192/MUM/2011 ITA NO. 2193/MUM/2011 ITA NO. 2194/MUM/2011 ITA NO. 2275/MUM/2011 ITA NO. 1107/MUM/2011 6 IN THE APPEAL 1107/M/11 FILED BY THE ASSESSEE, BELOW MENTIONED GROUNDS WERE RAISED AGAINST THE SAME ORDER OF CIT(A). 1. THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CON FIRMING THE TREATING RS. 5,00,000/- AS CASH RECEIPTS RECEIVED ON ACCOUNT OF AND AGAINST MARRIAGE ARRANGEMENTS AND THEREBY TREATING THE SAME AS CASH CREDIT U/S. 68 OF THE INCOME TAX ACT, 1961. 2. THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CON FIRMING AND CAPITALIZING THE EXPENSES INCURRED ON PURCHASE OF PIPES AND ADDED RS . 5,33,570/- AFTER DEDUCTING DEPRECIATION THEREON OF RS. 43,262/- (5,76,832 43 ,262) TO THE TOTAL INCOME ON THE GROUND THAT THE SAME IS CAPITAL IN NATURE. 3. (I)THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CONFIRMING THE COMMISSION EXPENSES AMOUNTING TO RS. 13,02,317/- AND ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE IN VIEW OF SECTION 40 (A)(IA) OF THE INCOM E TAX ACT, 1961. (II) AND THEREBY THE LD. COMMISSIONER OF INCOME TAX (A) ALSO ALLEGED THAT THE ASSESSEE HAD DEDUCTED TDS OF RS. 73,060/- ON THE CO RRESPONDING EXPENSES OF RS. 13,02,317/- PAID ON 01-11-2006 AND MADE LATE PA YMENT OF TDS. 4. THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN SET TING ASIDE ISSUE BACK TO ASSESSING OFFICER WITH A DIRECTION TO VERIFY THE PO SITION RELATING TO TDS AND MAKE DISALLOWANCE IN RESPECT OF SUCH PARTY IN WHOSE CASE TDS PAYMENTS WAS DELAYED AS PROVIDED IN SECTION 40(A)(IA) IN RESPECT OF PROFESS IONAL FEES PAID OF RS. 20,42,589/-. 5. THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CON FIRMING THE CHARGING INTEREST U/S. 234A, 234B, 234C & 234D OF INCOME TAX ACT, 196 1. 6. THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CON FIRMING THE PENALTY PROCEEDINGS U/S. 271(1)( C ) R.W.S. 274 OF INCOME TAX ACT, 1961 . 7. THE LD. COMMISSIONER OF INCOME TAX (A) ERRED IN CON FIRMING THE PENALTY PROVISIONS U/S. 269SS AND 269T OF THE INCOME TAX ACT, 1961 PAR TICULARLY WHEN ADDL. COMMISSIONER OF INCOME TAX HAVE ALREADY DROPPED THE PENALTY PROCEEDINGS. 2. FACTS OF THE CASE: M/S. R.M. BHUTTER & CO., A PROPRIETARY CONCERN OF L ATE SHRI R.M. BHATTAD ENGAGED IN THE BUSINESS OF MAKING AND MAINTAINING T HE STRUCTURE FOR EXHIBITION AND MANDAPS, HAD FILED RETURN OF INCOME ON 31-10-2006 D ECLARING TOTAL INCOME OF RS. 73.41 LAKHS. ASSESSMENT WAS FINALISED ON 31-12 -2008 BY THE AO DETERMINING THE INCOME OF THE ASSESSEE AT RS. 5.96 CRORES. 3. A SURVEY ACTION UNDER SECTION 133A OF THE INCOME TA X ACT, 1961 (ACT) WAS CARRIED OUT IN THE OFFICE PREMISES OF THE ASSESSEE GROUP 17-03-2006. DURING THE SURVEY ACTION, IT WAS FOUND THAT THE ASSESSEE HAD M ADE HUGE CASH EXPENSES IN RESPECT OF PURCHASES, LABOUR WAGES AND SALARY PAID TO EMPLO YEES OF ITS SISTER CONCERNS. THE ASSESSEE HAD MAINTAINED DAY TO DAY CASH BOOK AS WEL L AS BOOKS OF ACCOUNT FOR ALL THE TRANSACTIONS ENTERED INTO EVERY DAY AS THE DAY TO D AY TRANSACTIONS WERE OF HUGE VOLUME. ITA NO. 2119/MUM/2011 ITA NO. 2192/MUM/2011 ITA NO. 2193/MUM/2011 ITA NO. 2194/MUM/2011 ITA NO. 2275/MUM/2011 ITA NO. 1107/MUM/2011 7 3.1 DETAILS OF VARIOUS ENTITIES OF BHATTAD GROUP, THEI R STATUS AND ASSESSMENTS ARE AS UNDER: S.NO. NAME OF THE SISTER CONCERN STATUS ASSESSMENT 01 HARI CONSTRUCTION FIRM PROTECTIVE ASSESSMENT 02 BHATTAD BROTHERS FIRM ASSESSMENT U/S. 144-A OF THE ACT 03 M.B. DEVELOPMENT CORPORATION FIRM PROTECTIVE ASS ESSMENT 04 M.B. CONSTRUCTION FIRM ASSESSMENT U/S. 144-A OF THE ACT 3.2 . PAYMENTS MADE BY THE PROPRIETORY CONCERN OF LATE SHRI R.M. BHATTAD, M/S. R.M. BHATTER & CO.,TO ABOVE REFERRED GROUP ENTITIES WERE DISALLOWED. AO ALSO MADE PROTECTIVE ASSESSMENTS IN OTHER GROUP CONCERNS. APP EALS FILED BY THE ASSESSEE-GROUP WERE PARTLY ALLOWED BY THE FIRST APPELLATE AUTHORIT Y (FAA). 4. WHEN THE MATTER WAS BEING ARGUED, IT WAS NOTICED TH AT LATE SHRI R. M. BHATTAD HAD PASSED AWAY ON 23-10-2008 EXACTLY TWO MONTHS BE FORE THE ASSESSMENT ORDER FOR THE AY UNDER CONSIDERATION WAS PASSED BY THE AO. RE PRESENTATIVES FROM BOTH SIDES AGREED TO THE FACT THAT ASSESSMENT PASSED BY THE AO WAS OF A DECEASED PERSON. IN OUR OPINION ASSESSMENT ITSELF IS NOT VALID, SO, WE SET- ASIDE THE SAME. AO IS DIRECTED TO PASS FRESH ASSESSMENT ORDER AFTER AFFORDING REASONA BLE OPPORTUNITIES OF HEARING TO THE LEGAL HEIRS OF THE ASSESSEE. 4.1 WITH REGARD TO THE APPEALS FILED BY THE AO IN THE MATTERS OF GROUP CASES (I.E., ITA NOS.2193/M/2011; 2119/M/2011; 2192/M/2011; 2275 /M/2011) WE FIND THAT SAME ARE DIRECTLY RELATED TO THE MAIN ASSESSMENT OR DER I.E., ORDER OF LATE SHRI R.M. BHATTAD. WE REMIT THESE MATTERS ALSO TO THE AO FOR FRESH ADJUDICATION. 4.2 WE FIND THAT APPEAL FILED BY THE ASSESSEE WAS FILE D BY THE LEGAL HEIRS OF LATE SHRI R.M. BHATTAD. THIS APPEAL IS ALSO DIRECTLY RE LATED TO THE ASSESSMENT ORDER PASSED BY THE AO ON 31-12-2008 IN THE CASE OF LATE SHRI R. M. BHATTAD. AS WE HAVE EARLIER HELD THAT THE ASSESSMENT ORDER PASSED AFTER THE DEA TH OF THE ASSESSEE WAS NOT A VALID ASSESSMENT, SO WE REMIT THIS MATTER ALSO TO THE AO FOR FRESH ADJUDICATION. APPEALS OF THE AO AS WELL AS OF THE ASSESSEE ARE PA RTIALLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JULY, 2012 SD/- SD/- (B.R. MITTAL) (RAJENDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATE 25 TH JULY, 2012 TNMM ITA NO. 2119/MUM/2011 ITA NO. 2192/MUM/2011 ITA NO. 2193/MUM/2011 ITA NO. 2194/MUM/2011 ITA NO. 2275/MUM/2011 ITA NO. 1107/MUM/2011 8 COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR H BENCH, ITAT, MUMBAI 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI