ASHOK B. GUTA (HUF), MUMBAI V. ASST CIT 19(2), MUMBAI

ITA 2307/MUM/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9592 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 31-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K CHATURVEDI
• Assessee Lawyers: H K DESAI
• Keywords: Opportunity of being heard
• Section: 133A; 133(6); 147; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I G. MANJUNATHA , ACCOUNTANT MEMBER IT A NO. 2307 /MUM./2017 ( ASSESSMENT YEAR : 20 10 11 ) SHRI ASHOK B. GUPTA (HUF) 10, MINAL APARTMENT SHRADHANAND ROAD VILE PARLE (E), MUMBAI 400 057 PAN AAAHA4357A . APP ELL ANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 19)(2), MUMBAI . RESPONDENT ASSESSEEBY : SHRI H.K. DESAI REVENUE BY : SHRI V .K. CHATURVEDI DATE OF HEARING 26 .06.2019 DATE OF ORDER 03.07.2019 O R D E R PER SAKTIJIT DEY, J.M. CAPTIONED APPEAL HAS BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 16 TH FEBRUARY 2015, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 34 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 20 10 11 . 2 SHRI ASHOK B. GUPTA (HUF) 2 . GROUNDS NO.1 AND 2, CHALLENGING THE VALIDITY OF NOTICE ISSUED UNDER SECTION 148 OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) ARE NOT PRESSED, HENCE, DISMISSED. 3 . IN GROUNDS NO.3, 4 AND 5, THE ASSESSEE HAS CHALLENGED VARIOUS ADDITIONS MADE BY THE ASSESSING OFFICER AND SUSTAINED BY LEARNED COMMISSIONER (APPEALS). 4 . BRIEF FACTS ARE, THE ASSESSEE IS A HINDU UNDIVIDED FAMILY (HUF). THE ASSESSEE IS ENGAGED IN THE BUSINESS OF RUNNING G YMNASIUM S AND TRADING IN RAW Y ARN. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED ITS RETURN OF INCOME ON 14 TH OCTOBER 2010, DECLARING TOTAL INCOME OF ` 13,08,550. A SURVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT IN THE BUSINESS PREMISE S OF THE ASSESSEE ON 31 ST JANUARY 2012. DURING THE SURVEY, CERTAIN DISCREPANCIES WERE FOUND. IN THE COURSE OF ASSESSMENT PROCEEDINGS , ON THE BASIS OF THE DISCREPANCIES FOUND DURING THE SURVEY THE ASSESSING OFFICER FORMED THE BELIEF THAT INCOME CHARGEABLE TO TAX TO THE TUNE OF ` 3,70,96,44 7 H AS ESCAPED ASSESSMENT , INITIATED PROCEEDINGS UNDER SECTION 147 OF THE ACT. DURING THE RE ASSESSMENT PROCEEDINGS, ON THE BASIS OF DETAILS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER ISSUED NOTICES UNDER SECTION 133(6) OF THE ACT TO VARIOUS PARTIES F ROM WHOM THE ASSESSEE CLAIMED TO HAVE AVAILED UNSECURED LOANS AND ALSO ADVANCED LOANS. 3 SHRI ASHOK B. GUPTA (HUF) FURTHER, HE ALSO WANTED TO VERIFY THE PURCHASE AND SALES MADE BY THE ASSESSEE. AS OBSERVED BY THE ASSESSING OFFICER, IN RESPONSE TO THE NOTICES ISSUED UNDER SECTION 133( 6) OF THE ACT, IN MANY CASES REPLY WAS NOT RECEIVED . I N SOME CASES THOUGH REPLY WAS RECEIVED BUT THEY WERE NOT COMPLETE. THUS, ON THE BASIS OF SUCH INFORMATION, THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE LOAN TRANSACTIONS AND P URCHASE AND SALE TRANSACTIONS SHOULD NOT BE TREATED AS BOGUS. THOUGH , THE ASSESSEE SUBMITTED ITS REPLY CLAIMING THAT THE TRANSACTIONS WERE GENUINE, HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE. ON THE BASIS OF FACTS RELATING TO PAST YEARS, HE OBSERVED THAT FROM THE ASSESSMENT YEAR 2009 10 ONWARDS EVERY YEAR SUNDRY CREDITORS WERE INCREASING. FURTHER, HE OBSERVED , THOUGH THE ASSESSEE HAS SHOWN CLOSING STOCK OF MORE THAN ` 1 CRORE, HOWEVER, AT THE TIME OF PHYSICAL VERIFICATION NO STOCK WAS FOUND. THE ASSESSEE ALSO FAILED TO FURNISH THE DETAILS CALLED FOR. THUS, ALLEGING THAT THE ASSESSEE FAILED TO PROVE THE LOANS AND ADVANCES AS WELL AS PURCHASE AND SALE, THE ASSESSING OFFI CER MADE ADDITION OF AN AMOUNT OF ` 9,65,21,041 UNDER SECTION 68 OF THE ACT. THE ADDITION MADE BY THE ASSESSING OFFICER WAS PARTLY SUSTAINED BY THE LEARNED COMMISSIONER (APPEALS) WHILE DECIDING ASSESSEES APPEAL. 5 . THE LEARNED AUTHORISED REPRESENTATIVE SUBM ITTED , VARIOUS SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AND 4 SHRI ASHOK B. GUPTA (HUF) LEARNED COMMISSIONER (APPEALS) WERE NOT CONSIDERED PROPERLY. HE SUBMITTED THAT THE ASSESSEE WAS ALSO NOT PROVIDED ADEQUATE OPPORTUNITY TO RECONCILE THE DIFFERENCE , IF ANY , AND TO REMOVE THE DOUBTS ENTERTAINED BY THE DEPARTMENTAL AUTHORITIES. FURTHER, HE SUBMITTED , WHILE DECIDING IDENTICAL ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2009 10, VIDE ITA NO.699/MUM./2014, DATED 16 TH AUGUST 2016, THE TRIBUNAL HAS RESTORED TH E ISSUE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION. THUS, HE SUBMITTED , THE ISSUE MAY BE RESTORED BACK TO THE ASSESSING OFFICER WITH SIMILAR DIRECTION. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS NO OBJECTION IF THE ISSUE IS RESTORED BACK TO THE ASSESSING OFFICER FOR PROVIDING AN OPPORTUNITY TO THE ASSESSEE TO ESTABLISH THE GENUINENESS OF THE TRANSACTIONS. 7 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIAL ON RECORD. IN SUM AND SUBSTANCE, THE LIMITED CONTENTION OF THE LEARNED AUTHORISED RE PRESENTATIVE IS TO THE EFFECT THAT PROPER OPPORTUNITY WAS NOT GRANTED TO THE ASSESSEE TO ESTABLISH THE GENUINENESS OF VARIOUS TRANSACTIONS. IT IS OBSERVED , IN THE COURSE OF ASSESSMENT PROCEEDINGS TO VERIFY THE GENUINENESS OF VARIOUS LOANS AND ADVANCES AVAI LED / GIVEN AS WELL AS PURCHASE AND SALE TRANSACTION S , THE ASSESSING OFFICER HAS ISSUED NOTICES UNDER SECTION 133(6) OF THE ACT. AS PER THE DETAILS 5 SHRI ASHOK B. GUPTA (HUF) TABULATED IN THE ASSESSMENT ORDER, MOST OF THE NOTICES ISSUED UNDER SECTION 133(6) OF THE ACT WERE SERVED ON THE PERSON CONCERNED AND, IN MANY CASES, REPLIES TO THE NOTICES UNDER SECTION 133(6) OF THE ACT WERE ALSO RECEIVED. THUS, FROM THE AFORESAID FACTS, IT APPEARS THAT THE PERSONS WITH WHOM THE ASSESSEE HAD ENTERED INTO TRANSACTIONS ARE IDENTIFIABLE. THEREFOR E, THE ONLY THING WHICH REMAINS TO BE ESTABLISHED IS THE GENUINENESS OF THE TRANSACTIONS ALONG WITH THE CREDITWORTHINESS. IT IS THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE BEFORE US THAT THE ASSESSEE HAD, TO THE EXTENT POSSIBLE, TRIED TO RECONC ILE THE DIFFERENCES / DISCREPANCIES FOUND DURING THE SURVEY. HE HAS ALSO SUBMITTED THAT IF PROPER OPPORTUNITY IS GIVEN , THE ASSESSEE WOULD FURNISH NECESSARY EVIDENCES TO PROVE THE GENUINENESS OF TRANSACTIONS. CONSIDERING THE ABOVE, WE ARE INCLINED TO RESTO RE THE ISSUE TO THE ASSESSING OFFICER FOR FRESH ADJUDICATION AFTER DUE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. THE ASSESSEE ON ITS PART SHOULD FURNISH ALL NECESSARY EVIDENCES TO ESTABLISH THE GENUINENESS OF THE LOAN TRANSACTIONS AS WELL AS PURCHASE AND SALE TRANSACTION S . THE ASSESSING OFFICER MUST CONSIDER THE EVIDENCES FURNISHED BY THE ASSESSEE AND IF HE HAS ANY DOUBT REGARDING THEM, HE MUST BRING IT TO THE NOTICE OF THE ASSESSEE FOR PROPER RECONCILIATION. WITH THE AFORESAID OBSERVATIONS, WE RESTORE TH E ISSUE TO THE ASSESSING OFFICER. 6 SHRI ASHOK B. GUPTA (HUF) 8 . BEFORE PARTING, WE MUST MAKE IT CLEAR THAT OUR DIRECTIONS IN THE PRESENT APPEAL IS ONLY WITH REGARD TO THE ADDITIONS SUSTAINED BY THE LEARNED COMMISSIONER (APPEALS) AND DISPUTED BY THE ASSESSEE BEFORE US. THE ADDITIONS WHICH HAVE BEEN DELETED BY THE LEARNED COMMISSIONER (APPEALS) AGAINST WHICH THE DEPARTMENT IS NOT IN APPEAL , AS PER THE STATEMENT OF THE LEARNED DEPARTMENTAL REPRESENTATI VE , CANNOT BE RE OPENED / REVISITED BY THE ASSESSING OFFICER. GROUNDS RAISED ARE ALLOWED FOR STATISTICAL PURPOSES. 9 . IN THE RESULT, APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 03.07.2019 SD/ - G. MANJUNATHA ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 03.07.2019 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 (ASSTT. REGISTRAR) ITAT, MUMBAI