WHITE OCTOBER TECHNOLOGIES P.LTD, MUMBAI V. ITO WD 7(3)(4), MUMBAI

ITA 2299/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3223 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 17-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 22-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S SENT H IL KUMARAN
• Assessee Lawyers: A L SHARMA
• Keywords: Unexplained cash credit; Business expenditure; Opportunity of being heard; Additional evidence

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL G BE NCH, MUMBAI BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER / I .TA NO.2299/MUM/2013 ( / ASSESSMENT YEAR: 2006-07 WHITE OCTOBER TECHNOLOGIES PVT. LTD., 401, ANTARIKSH, MAKWANA ROAD, MAROL, ANDHERI (E), MUMBAI-400 059 / VS. THE ITO 7(3)(4), MUMBAI ./ ./ PAN/GIR NO. AAACW 0961D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY: SHRI A.L. SHARMA / RESPONDENT BY: SHRI S. SENTHIL KUMARAN / DATE OF HEARING :17.03.2016 ! / DATE OF PRONOUNCEMENT :27.05.2016 / O R D E R PER C.N. PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER OF THE LD. CIT(A)-13, MUMBAI DATED 8.6.2011 PERTAINING TO ASSE SSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS: A] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE TAXATION OF UNSECURED LOANS OF RS. 1,06,00,000/- NOT APPRECIATING THE FACT THAT SINCE THE APPELLANT FAILE D TO REPAY THE LOANS TO THE CREDITORS ON TIME THEY DID NOT COOPERATE WITH THE APP ELLANT AND AS SUCH THEY DID NOT SUBMIT THE CONFIRMATION LETTERS. ITA NO. 2299/M/2013 2 B] THE APPELLANT SUBMITS THAT THE CONFIRMATION LETTER S ARE NOW AVAILABLE AND THE GENUINENESS OF THE LOANS CAN BE PROVED. C] THE APPELLANT THEREFORE SUBMITS THAT THE ADDITION OF RS. 1,06,00,000/- NEEDS TO BE DELETED. 2] A] ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN CONFIRMING THE TAXATION OF UNSECURED LOANS OF RS. 2,75,000/- NOT APPRECIATING THE FACT THAT SINCE THE APPELLANT FA ILED TO REPAY THE LOANS TO THE CREDITORS ON TIME THEY DID NOT COOPERATE WITH T HE APPELLANT AND AS SUCH THEY DID NOT SUBMIT THE CONFIRMATION LETTERS . B] THE APPELLANT SUBMITS THAT THE CONFIRMATION LETTER S ARE NOW AVAILABLE AND THE GENUINENESS OF THE LOANS CAN BE PROVED. C] THE APPELLANT THEREFORE SUBMITS THAT THE ADDITION OF RS. 2,75,000/- NEEDS TO BE DELETED. 3] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITI ON OF RS. 62,000/- ON ACCOUNT OF CAR EXPENSES BEING SALARY PAID TO THE DRIV ER NOT APPRECIATING THE FACT THAT IT IS A BUSINESS EXPENDITURE AND NO AD DITION IS CALLED FOR. 4] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIO N OF RS. 1,06,455/- ON ACCOUNT OF CLUB EXPENSES NOT APPRECIATING THE FACT T HAT IT IS A BUSINESS EXPENDITURE AND NO ADDITION IS CALLED FOR. 5] THE LEARNED CIT(A) ERRED IN CONFIRMING THE ADDITIO N OF RS. 2,93,806/- ON ACCOUNT OF FOREIGN TRAVEL EXPENSES NOT APPRECIATING THE FACT THAT THE EXPENDITURE HAS BEEN INCURRED FOR THE PURPOSE OF BUSI NESS AND THE SAME NEEDS TO BE ALLOWED. 3. THE MAJOR ADDITIONS IN THIS APPEAL ARE ON ACCOUN T OF ADDITION MADE TOWARDS UNSECURED LOANS AND UNEXPLAINED CASH C REDIT. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS TH AT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT PROD UCE THE CONFIRMATIONS AS THE CREDITORS DID NOT CO-OPERATE WITH THE ASSESSEE AND DID NOT CONFIRM THE CREDITS FOR THE REASON THAT THE ASSESSEE WAS NOT IN A POSITION TO PAY THE LOANS. THEREFORE, HE SUBMITS THAT IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COUL D NOT FILE THE CONFIRMATIONS. THE LD. COUNSEL FOR THE ASSESSEE SUB MITS THAT ASSESSEE MANAGED TO MAKE SUBSTANTIAL PAYMENTS TO LOAN CREDIT ORS AND ITA NO. 2299/M/2013 3 THEREFORE MAJORITY OF THE CREDITORS AGREED AND SUB MITTED THE CONFIRMATIONS. HE SUBMITTED THAT THESE CONFIRMATIO NS ARE NOW FILED ALONGWITH BANK PASSBOOKS, BANK STATEMENTS, ETC., AS ADDITIONAL EVIDENCES BEFORE THE TRIBUNAL FOR ADMISSION. THE L D. COUNSEL FOR THE ASSESSEE SUBMITS THAT ASSESSEE COULD NOT REPRESENT THE MATTER BEFORE THE LD. CIT(A) AND THEREFORE LD. CIT(A) PASSED AN EX PARTE ORDER PARTLY ALLOWING THE APPEAL OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT ALL THE LOANS WERE OBTAINED B Y CHEQUES AND REPAID BY CHEQUES. THE LD. COUNSEL FOR THE ASSESSE E SUBMITS THAT THE ADDITIONAL EVIDENCES FILED NOW BE ADMITTED AND REST ORED TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. HE SUBMITS THAT THESE ADDITIONAL EVIDENCES COULD NOT BE FILED BEFORE THE ASSESSING OFFICER FOR THE REASON THAT THE CONFIRMATIONS COULD NOT BE OBTAINED BY THE ASSESSEE FROM THE CREDITORS. 4. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITS THAT SUFFICIENT OPPORTUNITY WAS GIVEN TO THE ASSESSEE AND INFACT R EMAND REPORT WAS ALSO CALLED FOR AND BASED ON THE REMAND REPORT THE LD. CIT(A) DECIDED THE ISSUES, THEREFORE HE SUBMITS THAT THE A DDITIONS MAY BE SUSTAINED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS NOT IN DISPUTE THAT T HE ASSESSEE COULD NOT OBTAIN CONFIRMATIONS FROM THE CREDITORS, THEREFORE, COULD NOT SUBMIT BEFORE THE ASSESSING OFFICER IN THE COURSE OF ASSES SMENT PROCEEDINGS. WE ALSO FIND THAT THERE IS NO REPRESENTATION FROM T HE ASSESSEES SIDE BEFORE THE LD. CIT(A) AND AN EXPARTE ORDER WAS PAS SED. THESE CONFIRMATIONS WHICH WERE PRODUCED BEFORE US WERE AL SO NOT ITA NO. 2299/M/2013 4 FURNISHED BEFORE THE LD. CIT(A). IN THE INTEREST O F JUSTICE, WE ADMIT THE ADDITIONAL EVIDENCES AS WE ARE CONVINCED WITH T HE SUBMISSIONS OF THE ASSESSEE AND THE REASONS FOR NOT FURNISHING THE SE EVIDENCES BEFORE THE LOWER AUTHORITIES. THESE ADDITIONAL EVI DENCES ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAM INE THE SAME AND DECIDE THE ISSUE REGARDING THE ADDITIONS TOWARDS UN SECURED LOANS AND UNEXPLAINED CASH CREDIT AFRESH IN ACCORDANCE WI TH LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. 6. THE ASSESSEE IN ITS APPEAL ALSO RAISED CERTAIN O THER GROUNDS IN RESPECT OF CONFIRMATION OF ADDITIONS TOWARDS CAR EX PENSES, CLUB EXPENSES AND FOREIGN TRAVEL EXPENSES. SINCE THERE WAS NO PROPER REPRESENTATION BEFORE THE LD. CIT(A) TO SUBSTANTIAT E ITS CLAIMS, WE FEEL THAT THESE ISSUES ALSO HAVE TO BE EXAMINED AFR ESH BY THE ASSESSING OFFICER. THUS, WE RESTORED ALL THESE ISS UES TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION WHO SHALL PASS APPROPRIATE ORDER AFTER GIVING ADEQUATE OPPORTUNITY OF BEING HE ARD. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH MAY, 2016. SD/- SD/- (RAMIT KOCHAR) (C.N. PRASAD ) ' / ACCOUNTANT MEMBER $ %' /JUDICIAL MEMBER MUMBAI; (' DATED :27 TH MAY, 2016 . % . ./ RJ , SR. PS ITA NO. 2299/M/2013 5 !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ) ( ) / THE CIT(A)- 4. ) / CIT 5. *+ ,%%-. , -.! , / DR, ITAT, MUMBAI 6. , /01 / GUARD FILE. / BY ORDER, *% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI