COLLIERS INTERNATIONAL PROPERTY SERVICES P.LTD, MUMBAI V. DCIT 26(2), MUMBAI

ITA 2337/MUM/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 0489 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Assessment Year: 2011-2012
• Appeal Filed On: 23-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ARJU GARODIA
• Assessee Lawyers: S M BANDI
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J , MUMBAI BEFORE S HRI G.S. PANNU (AM) AND SHRI RAM LAL NEGI (JM) ITA NO. 2337 /MUM/20 1 5 ASSESSMENT YEAR: 2011 - 12 M/S COLLIERS INTERNATIONAL PROPERTY SERVICES PVT. LTD, UNIT NO. 1701, TOWER - 3, INDIA BU LLS FINANCE CENTRE, SENAPATI BAPAT MARG, ELPHINSTONE (WEST), MUMBAI 400013 PAN: AAACC2145B VS. DY. COMMISSIONER OF INCOME TAX - 5 (1), (RESTRUCTURED JURISDICTION ASST. C.I.T. - 6(2)(1)), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S .M. BANDI (A R) RESPONDENT BY : SHRI ARJU GARODIA (D R) DATE OF HEARING: 02 /03 /201 7 DATE OF PRONOUNCEMENT: 31 / 0 5 /201 7 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST ORDER DATED 25/02 /2015 PASSED BY THE LD. CIT (APPEALS) - 10 , MUMBAI , FOR THE A S S ESSMENT YEAR 2011 - 12 , WHEREBY THE LD. CIT (A) HAS PARTLY ALLOWED THE APPEAL FILED BY THE ASSESSE E AGAINST ASSESSMENT ORDER PASSED U/S 143 (3) OF THE INCOME TAX A CT, 1961 (FOR SHORT THE ACT) . 2. BRIEF FACTS LEADING TO THE PRESENT APPEAL ARE THAT THE ASSESSEE COMPANY ENGAGED IN THE BUSINESS OF R EAL E STATE S E RVICES TO THE OCCUPANTS, OWNERS AND INVESTORS ETC. , FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2 ITA NO. 2337 /MUM/2015 ASSESSMENT YEAR: 2011 - 12 DECLARING THE TOTAL INCOME OF RS. 2,33,70,776/ - . THE LAO COMPLETED THE ASSESSMENT U/S 143 (3 ) OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 2,79,92,630/ - AFTER MAKING THE FOLLOWING A DDITIONS : A. DISALLOWANCE U/S 14A RS. 1,234 B. INTEREST ON TDS & VAT RS. 22,239 C. STAFF WELFARE EXPS. RS. 14,818 D. REFERRAL FESS U/S 40(A)(IA) RS. 34,747 E. DIFFERENCE IN AIR RS. 41,76,258 F. DISALLOWANCE OF PROVISIONS RS. 3,72,556 TOTAL RS. 46,21,852 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESS EE CHALLENGED THE ADDITION MADE ON ACCOUNT OF DIFFERENCE OF RS. 41,76,258/ - IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND OTHER PARTIES WHOSE ACCOUNT DETAILS WERE ON AIR INFORMATION. THE LD. CIT(A) AFTER HEARING THE ASSESSEE PARTLY ALLOWED THE APPEAL AND DI RECTED THE AO TO DELETE THE ADDITION OF RS. 6,65,830/ - AND CONFIRMED THE REMAINING ADDITION OF RS. 35,10,428/ - . STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 4. T HE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER ON THE FOLLOWING EFFECTIVE GROUND: - 1. THE LD. CIT (A) HAS GROSSLY ERRED IN LAW AS WELL AS ON FACTS IN CONFIRMING THE ADDITIONS OF RS. 35,10,428/ - MADE BEFORE THE A.O. ON ACCOUNT OF AMOUNT UNRECONCILED ARISING OUT OF A.I.R. INFORMATION. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSE E SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS AO ASKED THE ASSESSEE TO RECONCILE THE DIFFERENCE BETWEEN THE AMOUNT MENTIONED IN THE BOOKS OF ACCOUNT AND THE AMOUNT MENTIONED IN AIR INFORMATION RECEIVED. IN RESPONSE THEREOF THE ASSESSEE 3 ITA NO. 2337 /MUM/2015 ASSESSMENT YEAR: 2011 - 12 SUBMITTED THE R EPLY AND FURTHER EXPLAINED THAT SOME OF THE PARTIES TO WHICH THE ASSESSEE HA D RAISED CREDIT NOTES WERE NOT CONSIDERED BY THE PARTIES WHILE FILING THEIR TDS RETURNS BUT THEY PAID LESSER AMOUNT TO THE ASSESSEE AFTER CONSIDERING THE CREDIT NOTES. IN SOME OF T HE CASES PARTIES CREDITED AMOUNT S IN PAN OF THE ASSESSEE BUT ASSESSEE DID NOT RECEIVE SUCH AMOUNT S FROM THE PARTIES. DURING THE APPELLATE PROCEEDINGS, THE LD. CIT(A) DELETED THE ADDITION OF RS. 6,65,830/ - HOLDING THAT WHEN THE ASSESSEE HAS SPECIFICALLY DEN IED THE TRANSACTION S WITH THE PARTIES CONCERNED THE AO CANNOT MAKE ADDITION SIMPLY ON THE BASIS OF AIR INFORMATION WITHOUT CONDUCTING ANY ENQUIRY FROM SUCH PARTIES. SO FAR AS THE REMAINING AMOUNT OF ADDITION IS CONCERNED, THE LD. CIT(A) OUGHT TO HAVE EITHE R DELETED THE SAME OR DIRECTED THE AO TO CONDUCT ENQUIRY IN THE LIGHT OF THE CONTENTION S OF THE ASSESSEE . THE LD. COUNSEL RELYING ON THE DECISION OF THE MUMBAI TRIBUNAL DATED 05.12.2014, RENDERED IN M/S ANS LAW ASSOCIATES VS. ACIT , ITA NO. 5181/MUM/2012 SU BMITTED THAT ADDITIONS MADE SOLELY ON THE BASIS OF AIR INFORMATION ARE NOT SUSTAINABLE IN THE EYES OF THE LAW. THEREFORE, THE LD. CIT (A) HAS WRONGLY SUSTAIN ED THE REMAINING ADDITION . TO SUBSTANTIATE ITS CONTENTIONS, THE LD. COUNSEL SUBMITTED THE FOLLOWING DOCUMENTS IN THE FORM OF A PAPER BOOK: S R. NO. PARTICULARS PAGE NO. 1 RECONCILIATION CHART OF THE AMOUNTS AS PER BOOKS AND AMOUNTS AS PER 26AS IN RESPECT OF THE PARTIES ON WHICH ADDITION HAS BEEN SUSTAINED BY THE LD. CIT(A) ON THE BASIS OF AIR, ALONG WI TH THE LEDGER ACCOUNT OF THE PARTIES. 1 - 56 2. COPY OF 26 AS FOR THE A.Y. 2009 - 10 57 - 58 3. RELEVANT EXTRACTS OF THE 26AS FOR THE A.Y, 2010 - 11 59 4. RELEVANT EX TRACT OF THE 26AS FOR THE A.Y. 2011 - 12 60 5. RELEVANT EX TRACTS OF 26AS FOR THE YEAR 2012 - 13 61 4 ITA NO. 2337 /MUM/2015 ASSESSMENT YEAR: 2011 - 12 6. THE LD. COUNSEL FURTHER SUBMITTED THAT RECONCILIATION CHART WAS NOT FURNISHED BEFORE THE ASSESSING OFFICER BUT IT HAS BEEN PREPARED ON THE BASIS OF RECORD , THEREFORE, THE SAME MAY BE PUT TO APPROPRIATE VERIFICATION . 7. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTATIVE (DR) RELYING ON THE FINDINGS OF LD. CIT(A) SUBMITTED THAT SINCE THE ASSESSEE HAS FAILED TO RECONCILE THE DIFFERENCE BETWEEN THE RETURNED INCOME AND AMOUNT AS PER THE AIR INFORMATION , THE LD. CIT (A) HAS RIGHTLY SUSTAINED THE AD DITION. THE LD. DR FURTHER OPPOSED THE REQUEST OF THE LD. COUNSEL FOR ALLOWING VERIFICATION OF THE RECONCILIATION CHART ON THE GROUND THAT THE IT WAS NOT FURNISHED BEFORE THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND ALSO PERUSED THE MATERIAL PLACED BEFORE US. THE MAIN CONTENTION OF THE ASSESSEE WAS THAT IT HAD NO TRANSACTION WITH SOME OF THE PARTIES AND IN CASE OF OTHER PARTIES THE AMOUNTS MIGHT HAVE BEEN RECEIVED IN THE EARLIER OR SUBSEQUENT YEARS , THEREFORE THE AIR INFORMATION IS N OT CORRECT AND THE ADDITION CANNOT BE MADE/SUSTAINED ON THE BASIS OF AIR INFORMATION . THE LD. CIT (A) HAS DIRECTED THE AO TO DELETE RS. 6,65,830/ - OUT OF THE TOTAL ADDITION TAKING INTO CONSIDERATION THE FIRST P ORTION OF THE CONTENTION OF THE ASSESSEE H OWEV ER, SUSTAINED THE ADDITION IN CASE OF OTHER PARTIES WHERE THE ASSESSEE CLAIMED THE AMOUNT MIGHT HAVE BEEN RECEIVED IN EARLIER OR SUBSEQUENT YEARS. IT APPEARS FROM THE ASSESSMENT ORDER THAT THE AO HAS NOT CONDUCTED ANY ENQUIRY TO FALSIFY THE CONTENTION OF T HE ASSESSEE. IN M/ S ANS LAW ASSOCIATES VS. ACIT (SUPRA) THE C O - ORDINATE BENCH HAS RESTORED THE SIMILAR ISSUE TO THE FILE OF AO TO CONSIDER THE REPLY OF THE ASSESSEE VIS - - VIS THE AIR INFORMATION AND TO DECIDE THE ISSUE IN 5 ITA NO. 2337 /MUM/2015 ASSESSMENT YEAR: 2011 - 12 ACCORDANCE WITH LAW HOLDING THAT A DDITIONS MADE SOLELY ON THE BASIS OF AIR INFORMATION ARE NOT SUSTAINABLE IN THE EYES OF THE LAW. 9. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE CONSIDERED OPINION THAT THE RECONCILIATION CHART PREPARED AND PRODUCED BY THE ASSESSEE B EFORE US DURING THE ARGUMENTS OF THE APPEAL IS RELEVANT AND SHOULD BE PUT TO VERIFICATION BY THE AO. ACCORDINGLY, IN THE INTEREST OF JUSTICE , WE RESTORE THE MATTER BACK TO CARRY OUT THE NECESSARY VERIFICATION EXERCISE AND DECIDE THE ISSUE AFRESH AFTER AFFO RDING REASONABLE OPPORTUNI TY OF BEING HEARD TO THE ASSESSEE. IN THE RESULT, APPEAL FILED BY THE ASSESSEE FOR A SSESSMENT YEAR 2011 - 2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST MAY , 2017 . SD/ - SD/ - ( G.S. PANNU ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; DATED: 31 / 0 5 / 2017 ALINDRA, PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITA T, MUMBAI 6. / GUARD FILE . 6 ITA NO. 2337 /MUM/2015 ASSESSMENT YEAR: 2011 - 12 / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR ) , / ITAT, MUMBAI