A.C.I.T. CEN.CIR3.29, MUMBAI V. SKYLARK BUILD, MUMBAI

ITA 2251/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92538 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 07-05-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Assessee Lawyers: UTTAM CHAND BOTHRA
• Keywords: Unexplained cash credit; Opportunity of being heard; Additional evidence
• Section: 131; 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI VIJAY PAL RAO ( JM ) AND D. KARUNAKAR A RAO, (AM) , . , ./ I.T.A. NO . 2 251 AND 5954 / MUM/20 1 2 ( / ASSESSMENT YE A R : 20 0 8 - 09 AND 2009 - 10 ) ASSTT. COMMISSIONER OF INCOME TAX - CENTRAL CIRCLE - 29, ROOM NO. 4 11 , 4 TH FLOOR, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 4000 20 / VS. M/S SKYLARK BUILD, 54 - B, SAGAR AVENUE JUNCTION, S V ROAD AND LALLU BHAI PARK, ANDHERI (W), MUMBAI - 400058 ( / APPELLANT ) .. ( / RESPONDENT ) ./ ./PAN/GIR NO. : AAZFSO404K / REVENUE BY SHRI MANJUNATHA SWAMY / ASSESSEE BY S HRI UTTAMCHAND BOTHRA / DATE OF HEARING : 11 .5.2015 / DATE OF PRONOUNCEMENT : 22. 5. 2015 / O R D E R PER VIJAY PAL RAO ( JM ) THESE APPEA LS BY THE REVENUE ARE DIRECTED AGAINST THE ORDER DATED 3.1.2012 AND 25.7.2012 OF LD.CIT(A) FOR THE ASSESSMENT YEAR S 2008 - 09 AND 2009 - 10 RESPECTIVELY. 2. FOR THE ASSESSMENT YEAR 2008 - 09, THE REVENUE HAS TAKEN FOLLOWING GROUNDS : 1. A ) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN ADMIRING THE ADDITIONAL EVIDENCE UNDER RULE 46A WHEN THE SAME WERE NOT PRODUCED BEFORE THE AO DESPITE BEING GIVEN OPPORTUNITY; B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING THAT THE LOANS RECEIVED FROM M/S AKSHATA MERCANTILE PVT LTD AND M/S SPACE MARKETING CO. PVT.LTD WERE GENUINE DESPITE THE FACT THAT THERE WAS NO CREDITWORTHINESS OF THESE PARTIES 2251 AND 5954 /MUM/201 2 2 FOR THE ASSESSMENT YEAR 2009 - 10, THE REVENUE HAS TAKEN FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) ERRED IN HOLDING THAT THE LOANS RECEIVED FROM M/S SPACE MARKETING CO. PVT.LTD AND M/S NETRA MERCANTILE PVT.LTD AND ON VEHALF OF M/S AKSHATA MERCANTILE PVT LTD AND WERE GENUINE DESPITE THE FACT THAT THERE WAS NO CREDITWORTHINESS OF THESE PARTIES 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN BUILDER AND DEVELOPERS. DURING THE YEAR UNDER CONSIDERATION, THE ASS ESSEE HAS TAKEN ADVANCES OF RS.23 CRORES FROM M/S AKSHATA MERCANTILE PVT.LTD. (AMPL) . OUT OF THIS RS.23 CRORES, THE ASSESSEE CLAIMED TO HAVE RECEIVED RS.13 CRORES DIRECTLY FROM THE SAID COMPANY AND THE BALANCE OF RS.10 CRORES WAS RECEIVED FROM M/S MA HEEP MARKETING PVT.LTD. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO ISSUED SUMMONS U/S 131 OF THE INCOME TAX ACT, 1961 (THE ACT) TO THE CREDITOR M/S AMPL ASKING THEM TO EXPLAIN THE SOURCE OF ADVANCE OF RS.23 CRORES MADE BY THEM TO THE ASSESSEE. IN RESPONSE, THE ASSESSEE SUBMITTED RELEVANT DETAILS INCLUDING BANK DETAILS OF M/S MAHEEP MARKETING PVT.LTD. THE AO HELD THAT THE SAID AMPL FAILED TO PROVE IDENTITY, CREDITWORTHINESS OF M/S MAHEEP MARKETING PVT.LTD IN RESPECT OF THE AMOUNT DIRECTLY PAI D BY MAHEEP MARKETING PVT.LTD TO ASSESSEE. APART FROM THIS THE ASSESSEE HAS ALSO TAKEN THE ADVANCE OF RS.23.05 CRORES FROM M/S SPACE MERCANTILE PVT.LTD . THE AO ISSUED SUMMONS TO M/S SPACE MERCANTIEL PVT.LTD AND CALLED UPON THEM TO PROVE THE GENUINENESS OF TRANSACTION. SINCE THERE WAS NO RESPONSE TO THE NOTICE ISSUED BY THE AO TO THE CREDITOR, THE AO ISSUED SECOND LETTER AND IN RESPONSE THERETO THE ASSESSEE HAS FILED LETTER DATED 16.11.2011 ALONG WITH THE COPY OF BANK STATEMENT AND CONFIRMATION FROM M /S SUNIL SHARMA AND M/S SMPL . HOWEVER, THE AO HELD THAT M/S SMPL HAS FILED CONFIRMATION BUT FAILED TO PROVIDE COPY OF PROFIT AND LOSS ACCOUNT, BALANCE SHEET AND ACKNOWLEDGMENT OF IT RETURN. THEREFORE, GENUINENESS OF TRANSACTION , IDENTIFY AND CREDIT WORTHINESS OF THE CREDITOR WERE NOT PROVED. ACCORDINGLY, THE AO MADE THE ADDITION OF RS.23 CRORES TO THE TOTAL INCOME OF THE ASSESSEE AS UNEXPLAINED CREDIT U/S 68 OF THE ACT ON THE GROUND THAT THE ASSESSEE FAILED TO DISCHARGE THE ONUS CAST UPON HIM OF FIL ING REQUISITE EVIDENCE. 2251 AND 5954 /MUM/201 2 3 4. IN THE APPEAL PROCEEDINGS, BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED CONFIRMATION FROM THE PARTIES IN THE SHAPE OF AFFIDAVIT AND OTHER DETAILS. THE LD. CIT(A) ISSUED REMAND ORDER AND DIRECTED THE AO TO VERIFY THE DOCUMENTS AND SUBMIT REMAND REPO R T. THE AO DID NOT AGREE WITH THE EXPLANATION AND ADDITIONAL EVIDENCE FURNISHED BY THE ASSESSEE AND HELD THAT THE ASSESSEE HAS FAILED TO PROVE THE CREDITWOR THINESS OF THE AMPL BECAUSE THE PAYMENTS WERE MADE BY THIRD PARTY DIRECTLY T O THE ASSESSEE WHICH IS QUESTIONABLE. HOWEVER, IN THE CONFIRMATION HE DID NOT MENTION PAN OR ANY COPY OF RETURN, BALANCE SHEET AND PROFIT AND LOSS ACCOUNT OF M/S MAHEEP MARKETING LIMITED. AS REGARD OF RS.23 CRORES RECEIVED FROM M/S AMPL, THE AO AGA IN ISSUED SUMMONS TO THE SAID PARTY AND IN RESPONSE, BANK STATEMENT WAS FILED. THE AO DID NOT AGREE WITH THE EVIDENCE BROUGHT ON RECORD BY THE ASSESSEE FOR THE REASONS THAT AMPL HAS FAILED TO FILE ITS PRO F IT AND LOSS ACCOUNT, BALANCE SHEET AND ACKNOWLE DGEMENT OF IT RETURN. THUS, THE AO IN T HE REMAND REPORT CONFIRMED THE ADDITION MADE IN THE ASSESSMENT PROCEEDINGS. THE LD. CIT(A) HAS DELETED THE ADDITION MADE BY T HE AO BY ACCEPTING THE ADDITIONAL EVIDENCE. 5 . WE HAVE HEARD THE LD. DR AS WELL AS LD. A R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. DR HAS RELIED UPON THE ORDER OF THE AO AND REPORT . HE SUBMITTED THAT THE LD. CIT(A) DID NOT PROVIDE OPPORTUNITY OF BEING HEARD TO THE DEPARTMENT BEFORE DELETING THE ADDITION. THE ASSESSEE FAILED TO PRODUCE REQUISITE EVIDENCES AND DETAILS ASKED BY THE AO. CONFIRMATION S WERE PRODUCED WITHOUT PROFIT AND LOSS ACCOUNT, BALANCESHEET , PAN AND ACKNOWLEDGMENT OF IT RETURN. THEREFORE, MERE CONFIRMATION DOES NOT PROVE THE GENUINENESS OF TRANSACTION, IDENTIT Y AND CREDITWORTHINESS OF THE CREDITOR. 6 . ON THE OTHER HAND, THE LD.AR SUBMITTED THAT APART FROM EVIDENCE PRODUCED BEFORE THE AO IN THE REMAND PROCEEDINGS , THE ASSESSEE HAS RETURNED THE AMOUNT IN QUESTION IN THE SUBSEQUENT YEAR S . HE HAS FILED DETAILS OF THE REPAYMENT AND SUBMITTED THAT IN THE SUBSEQUENT YEAR, THE ASSESSEE REPAID THE ENTIRE AMOUNT, THEREFORE, THE ADDITION CANNOT BE MADE U/S 68 OF THE ACT. SIMILAR FACTS AND ARGUMENTS ARE ADVANCED FOR THE ASSESSMENT YEAR 2009 - 10. THE LD. AR HAS SUBMITT ED THAT THE AMOUNT HAS BEEN REPAID IN THE SUBSEQUENT 2251 AND 5954 /MUM/201 2 4 YEARS AND HE HAS FILED THE DETAILS OF REPAYMENT TO THE CREDITOR FOR WHICH THE AO HAS MADE ADDITION U/S 68. 7 . WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS MATERIAL ON RECORD . THERE IS A NEW DE VELOPMENT IN RESPECT OF THE TRANSACTION AS TH E ASSESSEE HAS REPAID THE AMOUNT IN QUESTION TO THE CREDITORS THEREFORE THE ISSUE IS REQUIRED TO BE EXAMINED BY CONSIDERING THE FACT OF REPAYMENT AND THE EVIDENCE FILED BY THE ASSESSEE DURING T HE R E MAN D PROCE EDING S . HENCE, IN THE FACT AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE DIRECT TO THE AO TO VERIFY THE DETAILS OF PAYMENT FILED BY THE ASSESSEE BEFOR E US. IF THE RECORD IS FOUND TO BE CORRECT THEN THE CLAIM OF THE ASSESSEE CANNOT BE DENIED FOR WANT OF GENUINENESS OF CREDITWORTHINESS OF THE CREDITOR. ACCORDINGLY, FOR THIS LIMITED PURPOSE WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO FOR VERIFICATION AND EXAMINATION OF REPAYMENT. 8 . IN THE RESULT, THE APPEAL S FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 22ND MAY , 201 5 . 22ND MAY , 2015 SD SD ( . / D. KARUNAKAR A RAO) ( / VIJAY PAL RAO ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: 22ND MAY , 2015 . . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT CONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI