FORTUNE SHIPPING LINES PRIVATE LIMITED, MUMBAI V. INCOME TAX OFFICE-1(1)(3), MUMBAI

ITA 2203/MUM/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9135 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K BEPARI
• Keywords: Opportunity of being heard
• Section: 115JB; 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N.K. PRADHAN , ACCOUNTANT MEMBER ITA NO. 2203 / MUM/2018 ( ASSESSMENT YEAR : 20 11 12 ) FORTUNE SHIPPING LINES PVT. LTD. REHEM MENSION NO.2 44, S.B. ROAD, COLABA CAUSEBAY MUMBAI 400 001 PAN AAACF0834E . APPELLANT V/S INCOME TAX OFFICER CIRCLE 1(1)(3), MUMBAI . RESPONDENT ASSESSEE BY : SHRI RAJESH SHAH REVENUE BY : SHRI S.K. BEPARI DATE OF HEARING 0 4 . 12 .2018 DATE OF ORDER 14.12.2018 O R D E R PER SAKTIJIT DEY, J.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 08.01.2018 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS), MUMBAI FOR THE ASSESSMENT YEAR 2011 - 12. 2 . BRIEFLY THE FACTS ARE, THE ASSESSEE, A COMPANY, IS ENGAGED IN THE BUSINESS OF DEPUTING CREW/OFFICERS FOR FOREIGN VESSELS, RECRUITING THEM AS PER THEIR TERMS AND CONDITIONS AND CHALLENGING AGENCY FEES AND 2 FORTUNE SHIPPING LINES PVT. LTD. COMMUNICATION CHARGES AS PER AGREEMENT. AS IT APPEAR S FROM THE FACTS ON RECORD, ASSESSEE DID NOT FILE ITS RETURN OF INCOME INITIALLY. SUBSEQUENTLY, ON THE BASIS OF INFORMATION AVAILABLE ON RECORD THAT THE ASSESSEE HAD DEPOSITED CASH IN BANK ACCOUNTS, THE ASSESSING OFFICER REOPENED THE ASSESSMENT UNDER SECTI ON 147 OF THE INCOME TAX ACT, 1961 (IN SHORT, ACT). IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, ASSESSEE FILED ITS RETURN OF INCOME ON 16.02.2015 DECLARING NIL INCOME UNDER THE NORMAL PROVISIONS AND BOOK PROFIT OF ` 1,28,838 UNDER S ECTION 115JB OF THE ACT. DURING THE ASSESSMENT PROCEEDINGS, ON THE BASIS OF INFORMATION AVAILABLE ON RECORD THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN THE CASH DEPOSITS MADE IN THE BANK ACCOUNTS MAINTAINED IN THE HDFC BANK AND THE ROYAL BAN K OF SCOTLAND AMOUNTING TO ` 21,15,500 AND ` 10,48,000 RESPECTIVELY. AS OBSERVED BY THE ASSESSING OFFICER, SINCE THE ASSESSEE FAILED TO FURNISH ANY EXPLANATION EXPLAINING THE SOURCE OF CASH DEPOSITS MADE INTO THE BANK ACCOUNTS THE ASSESSING OFFICER ADDED THE AMOUNT OF ` 31,63,500 TO THE INCOME OF THE ASSESSEE. OF COURSE, THE ASSESSING OFFICER MADE ONE MORE ADDITION OF ` 68,137 TOWARDS DELAYED PAYMENT OF EMPLOYEES CONTRIBUTION TO PROVIDENT FUND. BEING AGGRIEVED WITH THE AFORESAID ADDITIONS ASSESSEE PREFER RED APPEAL BEFORE THE COMMISSIONER (APPEALS). AS COULD BE SEEN FROM THE ORDER OF LEARNED COMMISSIONER (APPEALS), THE ASSESSEE DID NOT APPEAR TO REPRESENT HIS CASE DESPITE 3 FORTUNE SHIPPING LINES PVT. LTD. NOTICE OF HEARING. THEREFORE, HE PROCEEDED TO DISPOSE OF ASSESSEE'S APPEAL EX PARTE B Y CONFIRMING THE ADDITIONS MADE. 3 . THOUGH, THE ASSESSEE HAS RAISED MULTIPLE GROUNDS CHALLENGING THE VALIDITY OF RE - OPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT AS WELL AS THE MERITS OF ADDITION MADE, HOWEVER, AT THE TIME OF HEARING THE LEARNED AUTHOR ISED REPRESENTATIVE SUBMITTED, SINCE, REASONABLE OPPORTUNITY OF BEING HEARD WAS NOT AFFORDED TO THE ASSESSEE BY THE LEARNED COMMISSIONER (APPEALS), ISSUES MAY BE RESTORED TO THE COMMISSIONER (APPEALS) AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 4 . THE LEARNED DEPARTMENTAL REPRESENTATIVE, THOUGH, JUSTIFIED THE ACTION OF THE LEARNED COMMISSIONER (APPEALS) IN DECIDING THE APPEAL EX PARTE, HOWEVER, HE SUBMITTED, ONE MORE OPPORTUNITY CAN BE GIVEN TO THE ASSESSEE BY RESTORING THE ISSUES TO THE COMMISSION ER (APPEALS). 5 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. FROM THE ORDERS PASSED BY THE DEPARTMENTAL AUTHORITIES IT APPEARS THAT BEFORE THE ASSESSING OFFICER AND COMMISSIONER (APPEALS) THE ASSESSEE HAD NOT EXPLAINED THE NATURE AND SOURCE OF CAS H DEPOSITS IN THE BANK ACCOUNTS. FOR THIS REASON ALONE, ADDITIONS UNDER SECTION 68 OF THE ACT WAS MADE. HOWEVER, CONSIDERING THE SUBMISSION OF LEARNED AUTHORISED REPRESENTATIVE THAT GIVEN AN OPPORTUNITY ASSESSEE WILL BE 4 FORTUNE SHIPPING LINES PVT. LTD. ABLE TO PROVE THE NATURE AND SOURCE OF CASH DEPOSITS IN THE BANK ACCOUNTS COUPLED WITH THE FACT THAT ASSESSEES APPEAL WAS DECIDED EX PARTE, WE ARE INCLINED TO RESTORE THE ISSUES TO THE FILE OF THE LEARNED COMMISSIONER (APPEALS) FOR DE NOVO ADJUDICATION OF ALL THE ISSUES RAISED IN THE APPEAL AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. AT THE SAME TIME, WE DIRECT THE ASSESSEE TO RESPOND TO THE NOTICE OF HEARING TO BE ISSUED BY THE LEARNED COMMISSIONER (APPEALS) AND REPRESENT ITS CASE PROPERLY ON THE DATE OF HEARING TO BE FIXED BY LEA RNED COMMISSIONER (APPEALS). IN THE EVENT OF ANY FURTHER DEFAULT BY THE ASSESSEE TO APPEAR AND REPRESENT ITS CASE PROPERLY, LEARNED COMMISSIONER (APPEALS) IS AT LIBERTY TO DECIDE THE APPEAL ON ITS OWN MERITS ON THE BASIS OF MATERIALS AVAILABLE ON RECORD AN D IN ACCORDANCE WITH LAW. BEFORE CONCLUDING, WE MUST OBSERVE, WE HAVE NOT MADE ANY OBSERVATIONS WITH REGARDS TO THE MERITS OF THE ISSUES RAISED IN THE PRESENT APPEAL. GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. 6 . IN THE RESULT ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.12.2018 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 14.12.2018 5 FORTUNE SHIPPING LINES PVT. LTD. COPY OF THE ORDER FORWARDED TO : ( 1 ) THE ASSESSEE; ( 2 ) THE REVENUE; ( 3 ) THE CIT(A); ( 4 ) THE CIT, MUMBAI CITY CONCERNED; ( 5 ) THE DR, ITAT, MUMBAI; ( 6 ) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY (SR. PRIVATE SECRETARY) ITAT, MUMBAI