ASHWINI PARULKAR, MUMBAI V. ITO WD 16(2)(1), MUMBAI

ITA 2227/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75509 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-02-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M L PERUMAL
• Keywords: Onus to prove
• Section: 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUM BAI . . , , BEFORE SHRI I. P. BANSAL, JM AND SHRI SANJAY ARORA , AM ./ I.T.A. NO. 2227/MUM/2012 ( / ASSESSMENT YEAR: 2008-09) ASHWINI PARULKAR C/O., V. J. VARDE, A-3, MOUNT CLAIR APT., 534, GABRIEL ROAD, MAHIM, MUMBAI-400 016 / VS. I.T.O.-16(2)(1), MATRU MANDIR, ROOM NO.221, TARDEO, MUMBAI-400 007 ./ ./PAN/GIR NO. AGAAPP 0914 E ( /APPELLANT ) : ( !' / RESPONDENT ) # $ / APPELLANT BY : NONE !' # $ / RESPONDENT BY : SHRI M. L. PERUMAL % &'( # )* / DATE OF HEARING : 17.02.2014 +,- # )* / DATE OF PRONOUNCEMENT : 17.02.2014 . / O R D E R PER SANJAY ARORA, A. M.: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-27, MUMBAI (CIT(A) FOR SH ORT) DATED 03.10.2011, PARTLY ALLOWING THE ASSESSEES APPEAL CONTESTING ITS ASSES SMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMEN T YEAR (A.Y.) 2008-09 VIDE ORDER DATED 20.12.2010. 2. NONE APPEARED FOR AND ON BEHALF OF THE ASSESSEE WHEN HER APPEAL WAS CALLED OUT FOR HEARING NOR ANY ADJOURNMENT APPLICATION STANDS RECEIVED. A PERUSAL OF THE RECORD 2 ITA NO. 2227/MUM/2012 (A.Y. 2008-09) ASHWINI PARULKAR VS. ITO REVEALS THAT THE ASSESSEE HAD SOUGHT ADJOURNMENT ON THE LAST DATE OF HEARING, I.E., 22.08.2013 (VIDE LETTER DATED 20.08.2013), AND ACCE DING TO HER REQUEST THE HEARING WAS ADJOURNED FOR TODAY INSTANT (I.E., 17.02.2014), DUL Y NOTED BY THE REPRESENTATIVE. IN VIEW OF PROPER NOTICE OF HEARING, IT WAS CONSIDERED PROPER TO PROCEED TO HEAR THE APPEAL. 3. AT THE VERY OUTSET, IT WAS OBSERVED THAT THE INS TANT APPEAL IS DELAYED BY A PERIOD OF 64 DAYS; THE APPEAL HAVING BEEN FILED WITH THE TRIB UNAL ON 04.04.2012, EVEN AS THE IMPUGNED ORDER STOOD COMMUNICATED TO THE ASSESSEE O N 02.12.2011. IN THIS REGARD, THE ASSESSEE VIDE HER LETTER DATED 11.04.2012 (FILED ON 17.04.2012) STATES HER BEING ABSENCE FROM THE COUNTRY, I.E., FROM 10.11.2011 TO 17.03.20 12, AS THE REASON FOR THE SAID DELAY, ALSO ENCLOSING COPY OF HER PASSPORT TOWARD THE SAME . WE FIND THE SAID CAUSE AS REASONABLE, CONSIDERING HER ABSENCE FROM INDIA FOR A PERIOD OF AROUND FOUR MONTHS DURING THE RELEVANT TIME AND, FURTHER, EQUALLY IMPORTANT, OF HAVING ACTED WITH ALACRITY ON HER ARRIVAL TO INDIA. ALSO RELEVANT IN THE MATTER IS TH AT THE ASSESSEE IS A PROPRIETOR, AND AS WE DISCERN FROM THE RECORD, ALSO RESIDING ALONE. UNDER THE CIRCUMSTANCES, WE CONSIDER IT A FIT CASE FOR CONDONATION OF THE DELAY OF ABOUT TWO MONT HS, AND ADMIT THE APPEAL. 4. COMING TO THE MERITS OF THE CASE, WE FIND THAT T HE SOLE ISSUE BEING AGITATED IN APPEAL BY THE ASSESSEE IS THE CONFIRMATION OF THE D ISALLOWANCE IN THE SUM OF RS.2,42,080, CLAIMED BY WAY OF COMMISSION TO ONE, MS.AARTI MANTR I, IN THE MAIN, I.E., AT RS.2,14,040. THE PRIMARY FACTS ARE THAT THE ASSESSEE DERIVED COM MISSION INCOME AT RS.4,94,316/-, AGAINST WHICH EXPENDITURE BY WAY OF COMMISSION AT R S.4,28,080/- TO VARIOUS PARTIES WAS CLAIMED. THE PAYMENT TO MS. AARTI MANTRI, THOUGH PE R ACCOUNT PAYEE CHEQUE/S, STOOD DISALLOWED AS SHE WAS UNABLE TO PRODUCE CONFIRMATIO N FROM THE RECIPIENT. THE REASON FOR THE SAME IS STATED THAT THE PAYEE HAD NOT FILED HER INCOME-TAX RETURNS, SO THAT SHE REFUSED TO CO-OPERATE. THE BALANCE PAYMENT OF RS.28,040/- C OMPRISES OF SMALL PAYMENTS TO DIFFERENT PEOPLE, WHO ARE STATED TO HAVE INTRODUCED BUSINESS CLIENTS, MADE PER THE GENERAL PRACTICE FOLLOWED IN THE TRAVEL BUSINESS; THE ASSES SEE RUNNING A TRAVEL AGENCY. THE PAYMENTS, HOWEVER, BEING NOT SUPPORTED BY EXTERNAL EVIDENCE/S OR WITH REGARD TO PROOF OF SERVICE, STOOD DISALLOWED. AGGRIEVED, THE ASSESSEE IS IN APPEAL. 3 ITA NO. 2227/MUM/2012 (A.Y. 2008-09) ASHWINI PARULKAR VS. ITO 5. WE HAVE HEARD THE PARTIES, AND PERUSED THE MATER IAL ON RECORD. THE ONUS TO PROVE ITS RETURN, AND THE CLAIMS PREFER RED THEREBY, IT IS WELL-SETTLED, IS ONLY ON THE ASSESSEE. THE REVENUE, THEREFORE, CANNO T BE FAULTED WITH FOR HAVING DISALLOWED THE IMPUGNED CLAIM, I.E., IN VIEW OF THE ASSESSEE BEING UNABLE TO DISCHARGE THE BURDEN OF PROOF CAST ON IT BY LAW, AND MORE PARTICU LARLY UNDER SECTION 37(1) OF THE ACT. AT THE SAME TIME, HOWEVER, THE PAYMENT FOR THE BULK OF THE AMOUNT UNDER REFERENCE BEING BY ACCOUNT PAYEE CHEQUE/S (RS.2,14,040/-), THE SAME, T HOUGH NOT CONCLUSIVE OF THE MATTER, IS DEFINITELY A FACTOR THAT WOULD WEIGH IN FAVOUR OF T HE ASSESSEE, WHO CLAIMS TO HAVE INCURRED IT BY WAY OF EXPENDITURE FOR THE PURPOSE O F HER BUSINESS. ACCORDINGLY, IN OUR VIEW, NO DEFINITE VIEW ONE OR THE OTHER CAN BE TAKE N; THE REVENUE HAVING IN FACT ALSO DECIDED THE MATTER ONLY ON THE BASIS OF THE NON-DIS CHARGE OF THE ONUS BY THE ASSESSEE. A DECISION, THEREFORE, WOULD HAVE TO BE TAKEN ON THE BASIS OF THE CONSPECTUS OF THE CASE, TAKING THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE INTO ACCOUNT, I.E., NOT SOLELY ON THE BASIS OF A SINGLE FACTOR, BEING EITHER THE P AYMENT BY ACCOUNT PAYEE CHEQUE/S OR, CORRESPONDINGLY, THE ABSENCE OR OTHERWISE OF THE CO NFIRMATION (REFER PARA 5 OF THE IMPUGNED ORDER). FOR INSTANCE, WHETHER THE PAYEE IS A REGULAR PERSON OF THE TRADE? WHAT IS HER PROFESSIONAL EXPERIENCE/STANDING? HAD SHE WORKED FO R THE ASSESSEE IN THE PAST OR RETAINED BY HER IN THE FUTURE? IF NOT, WHY, PARTICULARLY CON SIDERING THAT THE ASSESSEE HAS PAID HER, APPARENTLY ON HER FIRST ENGAGEMENT WITH HER, A SUBS TANTIAL AMOUNT, WORKING TO 50% OF THE TOTAL COMMISSION PAID BY HER, SO THAT IT WOULD ONLY BE ON THE BASIS OF HER ESTABLISHED CREDENTIALS. WHAT ARE THE DETAILS OF THE SERVICES R ENDERED, INCLUDING THE CLIENTS, IF ANY, INTRODUCED, I.E., ASSUMING THAT THE COMMISSION HAS BEEN PAID FOR THE SAME? WHAT IS THE BUSINESS GENERATED FROM THOSE CLIENTS? THE ASSESSEE , WE OBSERVE, HAD BEEN WORKING IN THE SAID INDUSTRY PRIOR TO COMMENCING HER OWN BUSINESS. WAS THE PAYEE, THEREFORE, KNOWN TO THE ASSESSEE FROM HER PAST PROFESSIONAL EXPERIENCE ? IN FACT, IT IS ONLY THE ASSESSEES RESOURCES, IN TERMS OF HER PROFESSIONAL COMPETENCE AND CUSTOMER NETWORK THAT WOULD HAVE GIVEN HER THE CONFIDENCE TO BRANCH OUT AND EMB ARK ON HER SEPARATE ENTERPRISE. THE RATIO OF THE EXPENDITURE CLAIMED, I.E., AT OVER 85% OF THE REVENUE, EVEN AS OBSERVED BY THE 4 ITA NO. 2227/MUM/2012 (A.Y. 2008-09) ASHWINI PARULKAR VS. ITO LD. CIT(A), IS APPARENTLY EXTREMELY HIGH, AND HAS N OWHERE BEING EXPLAINED, WHICH REFLECTS ADVERSELY ON THE GENUINENESS OF THE CLAIM, AND WHICH GETS FURTHER ACCENTUATED IN THE ABSENCE OF CLEAR EVIDENCES. MUCH, THEREFORE, RE MAINS TO BE ASCERTAINED, AND THE MATTER IS FACTUALLY LARGELY INDETERMINATE. THE ONUS, THOUG H, TO LEAD EVIDENCE/S AND ESTABLISH FACTS IS ON THE ASSESSEE, ONLY WHEREUPON, WHERE IN DISAGR EEMENT, WOULD THE ONUS SHIFT TO THE REVENUE. THE ASSESSEES CASE HAS NOT BEEN PROPERLY REPRESENT ED BEFORE THE ASSESSING AUTHORITY; AGAIN, FOR THE REASON OF HER BEING OUT O F COUNTRY DURING THE RELEVANT TIME, SO THAT EVEN THE NOTICES OF HEARING DURING THE ASSESSM ENT PROCEEDINGS WERE SERVED ON HER THROUGH AFFIXTURE. THIS, APART FROM EXPLAINING THE NON-ATTENDANCE BEFORE THE A.O., LEADING TO AN EX PARTE ASSESSMENT, ALSO EXHIBITS THE SAME, I.E., INADEQUA TE REPRESENTATION BEFORE HIM. WE, HOWEVER, DISCOUNTENANCE THE ASSESSEES CONDUCT IN FURNISHING AN UNSIGNED CONFIRMATION (REFER REMAND REPORT/PB PGS.21-22). UNDER THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE , AS WELL AS IN THE INTEREST OF JUSTICE AND FAIRNESS OF PROCEDURE, WE THEREFORE CON SIDER IT FIT AND PROPER THAT THE MATTER IS RESTORED BACK TO THE FILE OF THE A.O. FOR ALLOWING THE ASSESSEE AN OPPORTUNITY TO PRESENT ITS CASE BEFORE HIM. THE A.O. SHALL DECIDE THE MATTER O N MERITS IN ACCORDANCE WITH LAW PER A SPEAKING ORDER, ALLOWING THE ASSESSEE A REASONABLE OPPORTUNITY TO STATE ITS CASE. WE DECIDE ACCORDINGLY. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. /-)0 &12/) # 3# 456 7 8 ' 9 ) # ) :; ORDER PRONOUNCED IN THE OPEN COURT ON FEBRUARY 17, 2014 SD/- SD/- (I. P. BANSAL) (SANJAY ARORA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER % ( MUMBAI; <& DATED : 17.02.2014 '.&../ ROSHANI , SR. PS 5 ITA NO. 2227/MUM/2012 (A.Y. 2008-09) ASHWINI PARULKAR VS. ITO ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT 3. % =) ( ) / THE CIT(A) 4. % =) / CIT - CONCERNED 5. @'AB !)&C1 , * C1- , % ( / DR, ITAT, MUMBAI 6. BD2 E( / GUARD FILE ! ( / BY ORDER, )/(* + (DY./ASSTT. REGISTRAR) , % ( / ITAT, MUMBAI