VIVEK GANESH BHARTU, MUMBAI V. ITO - 7(3)(1), MUMBAI

ITA 2287/MUM/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0882 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2017
• Appeal Filed By: Assessee
• Bench Allotted: I
• Next Hearing Date: 21-12-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 28-04-2016
• Court: TRIBUNAL
• Assessee Lawyers: DEVDATTA MAINKAR
• Keywords: Unexplained cash credit; Opportunity of being heard; Principle of natural justice; Additional evidence; Reasonable cause; Deemed dividend

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.2287/M/2016 ( 2010 - 2011 ) DR. VIVEK GANESH BHARTU, 764E UMRIGAR BLDG, TILAK ROAD, PARSEE COLONY, DADAR (E), MUMBAI - 400014. / VS. ITO - 7(3)(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AACPB7638P ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI DEVDATTA MAINKAR, AR / RESPONDENT BY : SHRI SAURABHKUMAR RAI, DR / DATE OF HEARING : 23.02.2017 / DATE OF PRONOUNCEMENT : 26 .04.2017 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 8.6.2016 IS AGAINST THE ORDER OF THE CIT (A) - 14, MUMBAI DATED 12.2.2016 FOR THE ASSESSMENT YEAR 2010 - 2011. IN THIS APPEAL, ASSESSEE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: - 1 (A) THE LD CIT (A) ERRED IN LAW AND IN FACTS IN CONFIRMING THE ORDER PASSED BY THE ASSESSING OFFICER BRINGING TO TAX AN AMOUNT OF RS. 6,00,000/ - AS UNEXPLAINED CASH CREDIT ALTHOUGH THE AMOUNTS WERE TAKEN AS LOAN FROM FRIENDS. (B) YOUR APPELLANT SUBMITS THAT THE SAID RECEIPTS REP RESENTED PERSONAL LOANS TAKEN BY THE ASSESSEE AND THE ASSESSEE FILED CONFIRMATIONS ALONG WITH NAMES AND ADDRESSES AND PAN OF THE PERSONS GIVING LOANS. 2. BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS A DELAY OF 7 DAYS IN F ILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE PRESCRIBED TIME LIMIT. IN THIS REGARD, LD AR BROUGHT OUR ATTENTION TO THE AFFIDAVIT FILED BY THE ASSESSEE, DATED 28.10.2016, AND DEMONSTRATED THAT THE DELAY IS NOT A DELIBERATE ONE. IN THIS REGARD, LD AR RE AD OUT THE CONTENTS OF THE SAID AFFIDAVIT WHICH READ AS UNDER: - 1. THAT ORDER OF THE CIT (A) - 14, DATED 12.2.2016 FOR AY 2010 - 2011 WAS RECEIVED BY ME ON 20.2.2016. 2 2. THAT DUE DATE OF FILING APPEAL BEFORE THE HONBLE INCOME TAX APPELLATE TRIBUNAL WAS 20.4. 2016 AS PER SECTION 253 OF THE ACT. 3. I WAS NOT KEEPING WELL DURING THE RELEVANT TIME. I MYSELF COMPILED THE APPEAL PAPERS AND FILED THE APPEAL ACCORDING TO THE KNOWLEDGE I POSSESSED ON 28.4.2016, ALTHOUGH WITH SOME DEFECTS. 4. THAT IN THIS WAY THERE IS A DELAY OF 7 DAYS FOR WHICH AN APPLICATION UNDER SECTION 5 OF THE LIMITATION ACT HAS BEEN FILED ALONG WITH MEMORANDUM OF APPEAL. 5. THAT I HAD NO INTENTION TO JEOPARDIZE THE INTEREST OF THE REVENUE BY DELAYING THE FILING OF APPEAL. 6. IN THE LIGHT OF THE A FORESAID, I SAY THAT THE DELAY IN FILING PRESENT APPEAL IS WHOLLY AND ABSOLUTELY ON ACCOUNT OF BONA FIDE, GENUINE AND CREDIBLE REASONS. 3. AFTER HEARING THE LD AR AND ON PERUSAL OF THE ABOVE MENTIONED CONTENTS OF THE AFFIDAVIT (SUPRA), WE FIND, THERE IS A SUFFICIENT AND REASONABLE CAUSE FOR NOT FILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE STIPULATED TIME. CONSIDERING THE SUFFICIENT AND REASONABLE CAUSE AS WELL AS THE SMALLNESS OF THE DEL AY, WE ARE OF THE VIEW, THIS IS A FIT CASE TO CONDONE THE DELAY. ACCORDINGLY WE ORDER. NOW, WE SHALL TAKE UP THE APPEAL ON MERITS. 4. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ADDITIONAL GROUNDS RELATING TO THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT AS WELL AS THE ADDITIONAL EVIDENCE THAT CONSTITUTES CONFIRMATION LETTER FROM MR. JUANID BIRYA AND RELATED RETURNS OF THE SAME, LD AR SUBMITTED THAT THE MATTER REQUIRES TO BE REMANDED TO THE FILE OF THE AO CONSIDERING THE MERITS AND LEGAL NATURE OF THE ADDITIONAL GROUND. 5. OTHER WISE, THIS IS A CASE WHERE THERE WAS AN ADDITION ON ACCOUNT OF DEEMED DIVIDEND AS PER SECTION 2(22)(E) OF THE ACT. BEFORE US, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PAYMENTS RECEIVED FROM THE COM PANY CONSTITUTES (I) SALARY ACCOUNT AND (II) THE REPAYMENT OF THE EARLIER ADVANCES GIVEN BY THE ASSESSEE TO THE COMPANY. IN SUPPORT OF HIS ARGUMENT, LD AR BROUGHT OUR ATTENTION TO VARIOUS DOCUMENTS IN THE PAPER BOOK ON PAGE 15. DRAWING OUR ATTENTION TO T HE DEBITED AMOUNTS OF RS. 37,000/ - (ON 4. 6.2009) AND RS. 60,499/ - (ON 4.6.2009), LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE SAME CONSTITUTES ADVANCES BY WAY OF COMPONENT OF INCOME TAX BY THE ASSESSEE ON BEHALF OF THE COMPANY. THE SAME ARE REIMBURSED I N THE SUBSEQUENT DAYS WHICH ARE ERRONEOUSLY DISALLOWED BY THE ASSESSING OFFICER IE PAYMENT ATTRACTING THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. AO IS DIRECTED TO EXAMINE THE SAME WHICH CONSTITUTES INCOME TAX PAYMENTS MADE 3 BY THE ASSESSEE ON BEHALF OF THE COMPANY. IF THAT IS THE CASE, AO NEED NOT MAKE ANY ADDITION ON THAT ACCOUNT. COMING TO THE AMOUNTS OF RS. 97,000/ - (8.8.2009) AND RS. 49,500/ - (7.9.2009), IT IS THE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE THAT THE SAME CONSTITUTES SALARY PAYM ENTS. FURTHER, LD AR BROUGHT OUR ATTENTION TO THE INCOME TAX RETURNS AND SUBMITTED THAT THE SAID AMOUNTS ARE OFFERED TO TAX UNDER THE HEAD SALARY IN THE YEAR UNDER CONSIDERATION. IN OUR VIEW, THE SAME SHOULD BE ACCEPTED AND THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT SHOULD NOT BE INVOKED. WITH THESE OBSERVATIONS, WE REMAND THIS ISSUE TO THE FILE OF THE AO FOR FRESH ADJUDICATION AND DECIDE THE MATTER AFRESH. 6. IN THE REGULAR GROUNDS OF APPEAL, ASSESSEE RAISED THE ISSUE RELATING TO THE UNSECURED LOAN AMOUNTING TO RS. 6 LAK HS INVOLVING 2 CREDITORS. AO ADDED AND CIT(A) CONFIRMED THE SAME. AFTER HEARING THE PARTIES AND CONSIDERING THE PRAYER OF THE ASSESSEE, WE FIND IT RELEVANT TO REMAND THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION. WE ORDER ACCORDINGLY. AO IS DIRECTED TO GRANT REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF NATURAL JUSTICE. AO SHALL TAKE INTO ACCOUNT ALL THE DOCUMENTS PLACED BEFORE HIM. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESS EE ARE ALLOWED FOR STATISTICAL PURPOSES. THUS, ALL THE GROUNDS / ADDITIONAL GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COU RT ON 2 6 T H APRIL, 2017. S D / - S D / - ( PAWAN SINGH) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 26.04.2017 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 4 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI