IRON MOUNTAIN INDIA P.LTD ( FORMERLY KNOWN MODY ACCESS INFO P. LTD), MUMBAI V. ITO 1(2)3, MUMBAI

ITA 2436/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8861 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 10-12-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: JIGER SAIYA; HEMLATA BHUNGARE
• Keywords: Unexplained cash credit; Unexplained expenditure; Opportunity of being heard
• Section: 142(1); 133(6); 69

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL I BENCH, MUMBAI . . , , , , BEFORE SHRI G.S.PANNU, AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO.2436/M/13 ( / ASSESSMENT YEAR: 2003-04) IRON MOUNTAIN INDIA PRIVATE LIMITED (FORMERLY KNOWN AS MODY ACCESS INFO. PVT. LTD.) APT. NOS. B-13B, B-14 AND B-15, 1 ST FLOOR, BLDG. NO.B, PARAGON CONDOMINIUM, PANDURANG BUDHKAR MARG, WORLI, MUMBAI - 400013 / VS. INCOME TAX OFFICER 1(2)(3) MUMBAI ./ ./ PAN/GIR NO. : AABCM3593N ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING: 15.02.2016 /DATE OF PRONOUNCEMENT: 25.01.2017 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 06.11.2012 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)7, ASSESSEE BY: SHRI JIGER SAIYA & MS. HEMLATA BHUNGARE DEPARTMENT BY: SHRI NEIL PHILIP ITA NO.2436/MUM/2013 A.Y. 2003-04 2 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] WHEREIN CERTAIN ADDITIONS RAISED BY THE ASSESSING OFFICER WAS CONFIRMED BY THE LEARNED CIT(A) AND THE SAID APPEAL IS RELEVANT TO THE ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE FILED THE RETURN OF INCOME ON 01.12.2003 DECLARING TOTAL INCOME OF RS.8,34,997/- WITH THE TAX LIABILITY OF RS.3,06,861/- UNDER THE REGULAR PROVISIONS OF THE INCOME TAX ACT AND THE TAX LIABILITY OF RS.73,819/- ON THE BOOK PROFIT U/S.115JB OF THE INCOME TAX ACT, 1961( IN SHORT THE ACT) OF RS.9,37,378/-. THE CASE HAVING CAME UP FOR SCRUTINY, THEREFORE NOTICE U/S. 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE ON 25.11.2004. THEREAFTER NOTICES U/S. 143(2( & 142(1) WERE ISSUED ON 14.07.2005 WHICH WERE SERVED UPON THE ASSESSEE ON 18.07.2005. NOTICE CONTAINING THE QUESTIONNAIRE WAS ALSO ISSUED ON 16.09.2005 WHICH WAS DULY SERVED UPON THE ASSESSEE ON 05.10.2005. ASSESSING OFFICER REJECTED THE EXPENDITURE INCURRED UPON THE ELECTRICITY, RENT AND PURCHASE OF BOX AND REGARDING UNEXPLAINED EXPENDITURE THEREFORE, THE ASSESSEE FILED THE APPEAL BEFORE LEARNED CIT(A) WHO ALSO CONFIRMED THE ASSESSMENT ASSESSED BY THE ASSESSING OFFICER. 3. FEELING AGGRIEVED THE ASSESSEE FILED PRESENT APPEAL BEFORE US. THE ASSESSEE HAS RAISED THE FOLLOWING ISSUES:- 1.1 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 7, MUMBAI HEREINAFTER REFERRED TO AS CIT(A) ERRED ON FACTS ITA NO.2436/MUM/2013 A.Y. 2003-04 3 AND IN LAW IN CONFIRMING THE DISALLOWANCE OF EXPENSES FOR ELECTRICITY RS.77,230/- AND RENT RS.2,880/- PAID TO M/S. R.J.SHAH & CO. 1.2 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 7, MUMBAI HEREINAFTER REFERRED TO AS CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF EXPENSES FOR SUPPLY OF MANPOWER OF RS.3,88,804/- PAYABLE TO M/S. OM COMPUTERS & CYBER CAF AS THE SAME WAS NOT CONFIRMED BY THE PARTY. 1.3 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 7, MUMBAI HEREINAFTER REFERRED TO AS CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF EXPENSES FOR PURCHASE OF BOXES FROM M/S. PENTAGON INTERNATIONAL OF RS.1,16,552/- AS THE SAME WAS NOT CONFIRMED BY THE PARTY. 1.4 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 7, MUMBAI HEREINAFTER REFERRED TO AS CIT(A) ERRED ON THE FACTS AND IN LAW IN CONFIRMING THE DISALLOWANCE OF EXPENSE FOR PURCHASE OF BOXES FROM M/S. ASHA PAPER BOX OF RS.2,10,546/- AS THE SAME WAS NOT CONFIRMED BY THE PARTY. 1.5 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 7, MUMBAI HEREINAFTER REFERRED TO AS CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF CASH IN HAND AT BANGALORE OFFICE AS UNEXPLAINED CASH CREDIT OF RS.6,033/-. 1.6 THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 7, MUMBAI HEREINAFTER REFERRED TO AS CIT(A) ERRED ON FACTS AND IN LAW BY NOT ADJUDICATING ON THE EIGHT GROUND OF APPEAL OF THE APPELLANT REGARDING THE ADHOC ADDITION OF RS.30,000/- BEING UNEXPLAINED EXPENDITURE. ISSUE NO. 1.1:- 4. THE REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED THE DISALLOWANCE OF EXPENSES FOR ELECTRICITY RS.77,230/- DESPITE THIS FACT THAT THE SAID PARTIES HAS DULY ITA NO.2436/MUM/2013 A.Y. 2003-04 4 BEEN ACCOUNTED IN ITS LEDGER AND IN THIS REGARD THE INFORMATION WAS GIVEN BY SHRI R.J.SHAH U/S. 133(6) OF THE ACT. BUT THE ASSESSING OFFICER WRONGLY DECLINED THE SAID EXPENDITURE WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT(A) WRONGLY, THEREFORE THE EXPENDITURE TO THE TUNE OF RS.77,230/- IS LIABLE TO BE ALLOWED IN THE INTEREST OF JUSTICE. ON THE OTHER HAND LEARNED REPRESENTATIVE OF THE DEPARTMENT HAS STRONGLY RELIED UPON THE ORDER PASSED BY THE LEARNED CIT(A) IN QUESTION. BY GIVING CARFUL THOUGHTS TO THE ARGUMENTS ADVANCED BY THE LEARNED REPRESENTATIVE OF THE PARTIES AND PERUSING THE RECORD IT CAME INTO NOTICE THAT THE APPELLANT HAS MENTIONED THE EXPENDITURE IN THE BOOKS OF ACCOUNTS WHICH HAS BEEN ENCLOSED AT PAGE 1 & 2 OF THE PAPER BOOK. ELECTRICITY BILLS FROM R.J.SHAH & CO HAVE ALSO BEEN PRODUCED BY THE APPELLANT WHICH HAVE BEEN ATTACHED AT PAGE 3 TO 13 OF THE PAPER BOOK. IT ALSO CAME INTO NOTICE THAT THE ASSESSING OFFICER ISSUED THE NOTICE TO SHRI R.J.SHAH & CO. U/S. 133(6) OF THE ACT AND SHRI. R.J.SHAH & CO. REPLIED TO THE SAID NOTICE WHICH HAS BEEN SHOWN AT PAGE 14 TO 18 OF THE PAPER BOOK AND CONFIRMED THE PAYMENT OF ELECTRICITY. IT IS ALSO ON RECORD THAT THE SAID AMOUNT WAS PAID THROUGH CHEQUES AND THE ENTRIES HAVE BEEN DULY REFLECTED IN THE PROFIT & LOSS ACCOUNT. WE ARE OF THE VIEW THAT THE SAID EXPENDITURE INCURRED BY THE ASSESSEE COMPANY DESERVES TO BE ALLOWED, EXCEPT THE EXPENDITURE INCURRED ON ACCOUNT OF RENT TO THE TUNE OF RS.2,880/- WHICH WAS NOT PRESSED AT THE TIME OF HEARING. ACCORDINGLY, THIS ISSUE IS PARTLY DECIDED IN FAVOUR OF ASSESSEE AND AGAINST THE REVENUE. ITA NO.2436/MUM/2013 A.Y. 2003-04 5 ISSUE NO. 1.2:- 5. UNDER THIS ISSUE, THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE OF CLAIM OF THE EXPENDITURE PAID TO M/S. OM COMPUTERS AND CYBER CAFE TO THE TUNE OF RS.3,88,804/-. THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE CLAIM OF THE ASSESSEE HAS WRONGLY BEEN DECLINED BY THE ASSESSING OFFICER WHICH HAS BEEN CONFIRMED BY THE LEARNED CIT(A) WRONGLY AND ILLEGALLY DESPITE THIS FACT THAT THE ENTRY TO THE TUNE OF RS.3,88,804/- ON ACCOUNT OF EXPENDITURE INCURRED ON COMPUTERS AND CONSULTANCY WITH M/S. OM COMPUTERS AND CYBER CAFE HAS RIGHTLY BEEN REFLECTED IN THE LEDGER ACCOUNT, SAMPLE COPY OF BILLS, BANK STATEMENTS ETC. ON THE OTHER HAND THE LEARNED REPRESENTATIVE OF THE DEPARTMENT HAS STRONGLY RELIED UPON THE FINDING OF THE LEARNED CIT(A). THE ASSESSING OFFICER DECLINED THE CLAIM OF THE APPELLANT ON THE GROUND THAT ASSESSEE FAILED TO PROVE THE CLAIM OF THE PARTIES. LEARNED CIT(A) HAS ALSO DISALLOWED THE SAME ON THE GROUND THAT NOTHING WAS PRODUCED BEFORE HIM TO JUSTIFY THE CLAIM OF THE ASSESSEE. NO DOUBT THE LEDGER ACCOUNT OF THE M/S. OM COMPUTERS AND CYBER CAFE FOR THE FINANCIAL YEAR 2002-03 HAS BEEN PRODUCED BEFORE US THROUGH PAGE NO.24-25 OF THE PAPER BOOK. THE COPY OF BILL HAS ALSO BEEN PRODUCED BEFORE US WHICH HAS BEEN SHOWN AT PAGE 26-27 OF THE PAPER BOOK. THE LEDGER ACCOUNT OF M/S. OM COMPUTERS AND CYBER CAF FOR THE FINANCIAL YEAR 2003-04 HAS BEEN SHOWN AT PAGE 28 TO 33 OF THE PAPER BOOK WHICH SPEAKS ABOUT THE TRANSACTION OF THE ASSESSEE ITA NO.2436/MUM/2013 A.Y. 2003-04 6 COMPANY WITH M/S. OM COMPUTERS AND CYBER CAFE. IT ALSO SEEMS THAT THE ASSESSEE COMPANY INCURRED THE EXPENDITURE AND MADE THE PAYMENT TO M/S. OM COMPUTERS AND CYBER CAF BY WAY OF CHEQUES. IN VIEW OF THE BANK STATEMENT AT PAGE 34-35 OF THE PAPER BOOK IT SEEMS THAT THESE DOCUMENTS WERE NOT PRODUCED BEFORE ASSESSING OFFICER AS WELL AS LEARNED CIT(A). IN VIEW OF THE SAID EVIDENCE, THE CLAIM OF THE ASSESSEE COMPANY SEEMS JUSTIFIABLE WHICH IS NOT LIABLE TO BE DECLINED IN ANY MANNER. IN VIEW OF THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE DISALLOWANCE OF CLAIM OF EXPENDITURE INCURRED TO THE TUNE OF RS.3,88,804/- WITH M/S. OM COMPUTERS AND CYBER CAF IS ALSO REQUIRED TO BE FURTHER EXAMINED IN VIEW OF THE EVIDENCE DISCUSSED ABOVE. IN VIEW OF THE SAID OBSERVATIONS WE ARE OF THE VIEW THAT THE CLAIM OF THE APPELLANT IS ALSO REQUIRED TO BE EXAMINED AFRESH IN THE LIGHT OF THE EVIDENCE DISCUSSED ABOVE. THEREFORE THE FILE IS ALSO HEREBY ORDERED TO BE RESTORED WITH ASSESSING OFFICER ON THIS ISSUE WHO WILL DECIDE THE MATTER AFRESH AFTER GIVING A PROPER AND FULL OPPORTUNITY OF BEING HEARD. ACCORDINGLY THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ISSUE NO. 1.3:- 6. THE ASSESSEE RAISED THE ISSUE WITH REGARD TO DISALLOWANCE OF PURCHASE OF BOXES FROM PENTAGON INTERNATIONAL ON THE GROUND THAT THE SAME WAS NOT CONFIRMED BY THE PARTIES. THE CLAIM OF THE ASSESSEE HAS BEEN DECLINED ON THE GROUND THAT THE ASSESSEE ONLY FILED THE ITA NO.2436/MUM/2013 A.Y. 2003-04 7 CONFIRMATION AND NO OTHER EVIDENCE WAS FILED TO CORROBORATE THE TRANSACTION. THE LEARNED CIT(A) HAS ALSO UPHELD THIS ISSUE ON THE GROUND OF THE PENTAGON INTERNATIONAL DID NOT CONFIRM THE TRANSACTION IN ENQUIRY U/S. 133(6) OF THE ACT. THE ASSESSEE AGAIN RELIED BEFORE US BY FILING A COPY OF CONFIRMATION OF PENTAGON INTERNATIONAL AT PAGE 36 OF THE PAPER BOOK. LEDGER ACCOUNT OF PENTAGON INTERNATIONAL HAS ALSO BEEN PLACE ON RECORD AT PAGE 38 TO 39 OF THE PAPER BOOK WHICH SPEAKS ABOUT THE TRANSACTIONS WITH ASSESSEE COMPANY. COPY OF INVOICE IS ALSO ON THE RECORD WHICH HAS BEEN PLACED ON RECORD AT PAGE 37 OF THE PAPER BOOK. IN VIEW OF THE SAID EVIDENCE WE ARE OF THE VIEW THAT THE CLAIM OF THE APPELLANT DESERVES TO BE ALLOWED. ACCORDINGLY THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ISSUE NO. 1.4:- 7. LEARNED REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE LEARNED CIT(A) HAS WRONGLY CONFIRMED THE FINDINGS OF ASSESSING OFFICER VIDE WHICH THE EXPENDITURE INCURRED UPON TO PURCHASE THE BOXES FROM M/S. ASHA PAPER BOX HAS WRONGLY BEEN DECLINED. IT IS ARGUED THAT THE CONFIRMATION OF THE COMPANY HAS BEEN FILED ON RECORD. THE CLAIM OF THE ASSESSEE WAS DECLINED ON THE GROUND OF THAT THE CONFIRMATION WAS NOT SUPPORTED BY ANY OTHER EVIDENCE ON RECORD. BEFORE US, COPY OF THE CONFIRMATION OF ACCOUNTS M/S. ASHA PAPER BOX HAS BEEN PLACED ON RECORD AT PAGE 40 OF THE PAPER BOOK. COPY OF THE INVOICE BILLS OF M/S. ASHA PAPER BOX HAS ALSO BEEN PLACED ON RECORD AT ITA NO.2436/MUM/2013 A.Y. 2003-04 8 PAGE 41 OF THE PAPER BOOK. NO DOUBT THE CLAIM OF THE ASSESSEE IS ON THE BASIS OF SAID DOCUMENTS BUT SAID CLAIM IS NOT REQUIRED TO BE DECLINED WITHOUT ANY COGENT AND CONVINCING REASON ON RECORD. THEREAFTER WE ARE OF THE VIEW OF THAT THE CLAIM OF THE ASSESSEE DESERVES TO BE ALLOWED. ACCORDINGLY THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ISSUE NO. 1.5:- 8. ISSUE NO. 1.5 HAS BEEN NOT PRESSED BY THE REPRESENTATIVE OF THE ASSESSEE. ISSUE NO. 1.6:- 9. UNDER THIS ISSUE THE LEARNED REPRESENTATIVE OF THE ASSESSEE HAS CHALLENGED THE DISALLOWANCE TO THE TUNE OF RS.30,000/- BEING UNEXPLAINED EXPENDITURE U/S. 69 C OF THE ACT. THE ASSESSING OFFICER HAS HELD ON THIS ISSUE THAT THE ASSESSEE HAS FAILED TO PROVE THIS EXPENDITURE ON RECORD BY NOT PRODUCING THE BILLS OR ENTRIES OR ACCOUNTS ETC., BUT AT THE TIME OF ARGUMENTS BEFORE US THE ASSESSEE PRODUCED THE DETAILS AND COPIES OF TRAVELLING AND CONVEYANCE EXPENSES BILLS / VOUCHERS ETC. AT PAGE 42 TO 58 OF THE PAPER BOOK. HE ALSO PRODUCED THE DETAILS OF COPIES AND BUSINESS PROMOTION AND ENTERTAINMENT EXPENSES BILL ETC. AT PAGE 59 TO 67 OF THE PAPER BOOK AND HE ALSO PRODUCED THE DETAILS AND COPIES OF COMPUTER HIRE AND COMPUTER EXPENSE BILL ETC. AT PAGE 68 TO 74 OF THE PAPER BOOK. ON PERUSAL OF THE ITA NO.2436/MUM/2013 A.Y. 2003-04 9 ORDER UNDER CHALLENGED WE NOWHERE FOUND THE DISCUSSION OF THE ABOVE SAID DOCUMENTS ON RECORD. NO DOUBT THIS ISSUE IS REQUIRED TO BE DECIDED AFRESH ON THE BASIS OF MATERIAL PRODUCED BEFORE US. THEREFORE IN THE SAID CIRCUMSTANCES THE FILE IS HEREBY ORDERED TO BE RESTORE BEFORE ASSESSING OFFICER ON THIS ISSUE TO EXAMINE THE EVIDENCE PRODUCED BY THE ASSESSEE BEFORE US AFTER GIVING AN OPPORTUNITY OF BEING HEARD TO HIM. ACCORDING THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE 10. ACCORDINGLY, APPEAL OF THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH JANUARY, 2017 SD/- SD/- (G.S.PANNU) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 25 TH JANUARY, 2017 MP / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI