EMPIRE INDIA MULTITRADE PVT. LTD., MUMBAI V. ADDLL.CIT 14 (1)(2), MUMBAI

ITA 2516/MUM/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7250 (ITAT-MUMBAI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2012-2013
• Appeal Filed On: 23-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV K GUBGOTRA
• Keywords: Principle of natural justice; Application of stay; Accommodation entries; Set aside
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E, BENCH MUMBAI BEFORE SHRI MAHAVIR SINGH, JM & SHRI G. MANJUNATHA, AM ITA NO.2516/MUM/2019 ( ASSESSMENT YEAR :2012-13 ) & SA NO.275/MUM/2019 (ARISING OUT OF ITA NO.2516/MUM/2019) ASSESSMENT YEAR: 2012-13 EMPIRE INDIA MULTITRADE PRIVATE LIMITED 1307, RCS & ASSOCIATES MAYURESH COSMOS TOWER SAROVAR VIHAR ROAD SECTGOR-11, CBD BELAPUR NAVI MUMBAI-400 614 VS. ADDL.CIT-14(1)(2) AAYKAR BHAWAN,M.K.ROAD MUMBAI-400 020 PAN/GIR NO. AACCE4324J ( APPELLANT ) .. RESPONDENT ) ASSESSEE BY NEERAJ MANGLA REVENUE BY RAJEEV K.GUBGOTRA DATE OF HEARING 0 5 /07/2019 DATE OF PRONOUNCEME NT 24 /07/2019 / O R D E R PER G.MANJUNATHA (A.M) : THE ASSESSEE HAS FILED STAY APPLICATION AND REQUEST ED TO STAY OUTSTANDING DEMAND OF TAX AND INTEREST OF RS. 17,42 ,32,676/- FOR THE ASSESSMENT YEAR (AY) 2012-13. WHEN THE STAY APPLICA TION IS CALLED FOR HEARING ON 05/07/2019, THE LD. AR FOR TH E ASSESSEE SUBMITTED THAT THE AO HAS MADE ADDITIONS TOWARDS SH ARE PREMIUM U/S 68 OF THE I.T ACT, 1961, WITHOUT PROVIDING AN O PPORTUNITY OF CROSS- EXAMINATION OF SHRI SHIRISH C.SHAH AND COPY OF TH E STATEMENT ON THE BASIS OF WHICH ADDITIONS WERE MADE AND SUSTAINE D DURING THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDIN GS, IN GROSS ITA NO.2516/MUM/2019 S.A.NO.275/MUM/2019 EMPIRE INDIA MULTITRADE PVT.LTD. 2 VIOLATION OF THE PRINCIPLES OF NATURAL JUSTICE AND LAW. THEREFORE, INSTEAD OF TAKING UP SA FOR THE ASSESSEE, THE APPEA L FILED BY THE ASSESSEE, WHICH IS TAGGED ALONG WITH THIS SA MAY BE HEARD AND SET ASIDE TO THE FILE OF THE AO TO GIVE AN OPPORTUNITY TO THE ASSESSEE BEFORE THE AO. THE LD. DR PRESENT FOR THE REVENUE, ALTHOUGH INITIALLY OPPOSED HEARING OF APPEAL, BUT SUBSEQUENTLY AGGREED FOR THE PROPOSITION PUT FORTH BY THE LD.AR FOR THE ASSESSE E TO SET ASIDE THE ISSUE TO THE FILE OF THE AO. WE, THEREFORE, DECIDED TO TAKE-UP THE APPEAL FILED BY THE ASSESSEE FOR HEARING. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESEE COMPANY IS ENGAGED IN THE BUSINESS OF TRADING OTHERS FILED IT S RETURN OF INCOME FOR AY 2012-13 ON 27/09/2012 DECLARING TAXABLE INCO ME AT RS. 55,43,547/-. THE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OF THE I.T.ACT, 1961 ON 17/03/2015 DETERMINING THE TOTAL I NCOME AT RS. 94,21,93,547/- BY MAKING ADDITIONS TOWARDS DISALLOW ANCE ON ACCOUNT OF ACCOMMODATION ENTRIES OF SHARE CAPITAL A ND SHARE PREMIUM ON THE GROUND THAT THE ASSESEE IS INDULGED IN THE ACTIVITY OF PROVIDING ACCOMMODATION ENTRIES OF SHARE CAPITAL AN D SHARE PREMIUM. 3. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). BEFORE THE LD. CIT(A) , THE ASSESSEE HAS FILED ELABORATE RETURN SUBMISSIONS ON THE ISSUE WHICH HAS BEEN REPRODUCED AT PARA 4.2 ON PAGES 11 TO 23 OF LD.CIT (A) ORDER. THE LD. CIT(A) FOR THE DETAILED REASONS RECORDED IN ITS APPELLATE ORDER DATED 25/02/2019 ALLOWED PARTIAL RELIEF TO THE ASSE SSEE, WHEREBY DELETED ADDITIONS TO THE EXTENT OF RS. 51,93,25,000 /- AND BALANCE ITA NO.2516/MUM/2019 S.A.NO.275/MUM/2019 EMPIRE INDIA MULTITRADE PVT.LTD. 3 AMOUNT OF RS. 41,73,25,000/- HAS BEEN CONFIRMED. A GGRIEVED BY THE LD.CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. AR FOR THE ASSESSEE, AT THE TIME OF HEAR ING, SUBMITTED THAT THE AO AS WELL AS THE LD. CIT(A) WERE GROSSLY ERRED IN NOT PROVIDING OPPORTUNITY OF CROSS-EXAMINATION OF SHRI SHIRISH C.SHAH AND COPY OF HIS STATEMENT ON THE BASIS OF WHICH ADD ITIONS WERE MADE AND SUSTAINED DURING THE COURSE OF ASSESSMENT AS WELL AS APPELLATE PROCEEDINGS IN GROSS VIOLATION OF THE PR INCIPLES OF NATURE JUSTICE AND LAW. THEREFORE, THE ISSUE MAY BE SET AS IDE TO THE FILE OF THE AO TO GIVE AN OPPORTUNITY TO THE ASSESSEE TO CR OSS-EXAMINE SHRI SHIRISH C. SHAH AND ALSO TO AVAIL THE BENEFIT OF HI S STATEMENT. THE LD. DR, ON THE OTHER HAND, FAIRLY ACCEPTED THAT THE ISSUE MAY BE SET ASIDE TO THE AO FOR DENOVO ASSESSMENT IN LIGHT OF C LAIM OF THE ASSESSE THAT THERE IS VIOLATION OF THE PRINCIPLES O F NATURAL JUSTICE. 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIAL AVAILABLE ON RECORD AND GONE THOUGH THE ORDERS OF THE AUTHORI TIES BELOW. AT THIS JUNCTURE, WE MAKE IT CLEAR THAT BOTH COUNSELS FOR THE ASSESSEE AS WELL AS THE REVENUE HAVE AGREED TO SET ASIDE THE ISSUE TO THE FILE OF THE AO FOR DENOVO ASSESSMENT IN LIGHT OF CLAIM O F THE ASSESSEE THAT THERE IS VIOLATION OF THE PRINCIPLES OF NATUR AL OF JUSTICE IN ASSESSMENT PROCEEDINGS IN AS MUCH AS, THE OPPORTUN ITY OF CROSS- EXAMINATION OF THE PERSON WHO GAVE STATEMENT AND CO PY OF HIS STATEMENT WAS NOT GIVEN TO THE ASSESSEE, IN SPITE O F SPECIFIC REQUEST MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. T HEREFORE, CONSIDERING THE ARGUMENTS OF BOTH COUNSELS, WE DEEM IT APPROPRIATE TO SET ASIDE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO REFRAME ITA NO.2516/MUM/2019 S.A.NO.275/MUM/2019 EMPIRE INDIA MULTITRADE PVT.LTD. 4 THE ASSESSMENT DENOVO IN LIGHT OF CLAIM OF THE ASS ESSEE THAT THERE IS A VIOLATION OF THE PRINCIPLES OF NATURAL JUSTIC E. WE FURTHER DIRECT THE AO TO PROVIDE OPPORTUNITY OF CROSS-EXAMINATION OF T HE PERSON WHO GAVE STATEMENT I.E, SHRI SHIRISH C.SHAH AND ALSO CO PY OF HIS STATEMENT ON THE BASIS OF WHICH ADDITIONS WERE MAD E AND SUSTAINED DURING THE ASSESSMENT AS WELL AS APPELLATE PROCEED INGS. WE FURTHER MAKE IT CLEAR THAT WE HAVE NOT EXPRESSED ANY OPINIO N ON MERITS IN RESPECT OF ISSUE INVOLVED IN THIS APPEAL AND LEFT O PEN, THE ISSUE TO THE AO TO DECIDE IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSE. 7. IN SO FAR AS STAY APPLICATION FILED BY THE ASSES SEE IN SA NO.275/MUM/2018, WE FIND THAT SINCE THE APPEAL FILE D BY THE ASSESSEE HAS BEEN SET ASIDE TO THE FILE OF THE AO F OR DENOVO ASSESSMENT, CONSEQUENT STAY APPLICATION FILED BY TH E ASSESSEE SEEKING STAY FOR OUTSTANDING DEMAND BECOMES INFRUCT UOUS AND HENCE, THE SAME IS DISMISSED AS NOT MAINTAINABLE. 8. IN THE RESULT, THE STAY APPLICATION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 24/07/2 019 SD/- (MAHAVIR SINGH) SD/- (G. MANJUNATHA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 24/07/2019 THIRUMALESH SR.PS ITA NO.2516/MUM/2019 S.A.NO.275/MUM/2019 EMPIRE INDIA MULTITRADE PVT.LTD. 5 COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//