ACIT 25(1), MUMBAI V. ASHA TILAKRAJ SHARMA, MUMBAI

ITA 2850/MUM/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0082 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 13-09-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 12-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JENARDHANAN
• Keywords: Unexplained investment
• Section: 69; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI R. C. SHARMA , ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ./ I.T.A. NO. 2850/MUM/2013 ( / ASSESSM ENT YEAR: 2008 - 09 ) ASST. CIT - 25(1), C - 11, PRATYAKSHAKAR BHAVAN, R. NO. 202, BANDRA KURLA COMPLEX, BANDRA (E), MUMBAI - 400 051 / VS. SMT ASHA TILAKRAJ SHARMA 603, CRYSTAL PARADISE, VEERA DESAI ROAD, ANDHERI (W), MUMBAI - 53 ./ ./ PA N/GIR NO. ADAPA 9488 R ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI V. JENARDHANAN / RESPONDENT BY : NONE / DATE OF HEARING : 12.07.2017 / DATE OF PRONOUNCEMENT : 31 .0 8 .2017 / O R D E R PER R. C. SHARMA , A. M.: THIS IS AN A PPEAL FILED BY THE REVENUE AGAINST THE O RDER BY THE LD. CIT(A) - 35 , MUMBAI DATED 04.01.2013 , FOR THE ASSESSMENT YEAR (A.Y.) 2008 - 09, IN THE MATTER OF EX - PARTE ORDER PA SSED BY THE A.O. U/S.14 4 OF THE INCOME TAX ACT, 1961. 2. NOBODY APPEARED ON BEHALF OF THE ASSESSEE IN RESPECT OF THE SERVICE OF NOTICE ON THE DATE FIXED FOR HEARING, I.E., 12.07.2017. WE FOUND THAT EVEN ON EARLIER OCCASION S , THE APPEAL WAS FIXED FOR HEAR ING ON 02.02.2016, HOWEVER NOBODY APPEARED ON BEHALF OF THE 2 ITA NO. 2850/MUM/2013 (A.Y. 2008 - 09) ASST. CIT VS. SMT ASHA TILAKRAJ SHARMA ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED. UNDER THESE CIRCUMSTANCES, THE BENCH CONSIDERED IT APPROPRIATE TO DISPOSE THE APPEAL AFTER HEARING THE LD. DR AND CONSIDERING THE MATERIAL PLACE D ON RECORD. 3. FOLLOWING THREE GROUNDS HAVE BEEN TAKEN IN THE APPEAL: (I) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE ADDITION OF RS.21,50,034/ - ON ACCOUNT OF ESTIMATION OF PROFIT @ 8% OF THE TURNO VER AS THE A.O HAS NEVER ACCEPTED THE TRADING RESULT SHOWN BY THE ASSESSEE IN THE REMAND REPORT AS THE ASSESSEE FAILED TO SUBSTANTIATE HER RETURN OF INCOME.' (II) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN NOT SUSTAINING THE DISALLOWANCE OF RS.5,70,894/ - , WHICH IS DISALLOWABLE U/S 40(A)(IA)OF I. T. ACT AS- ASSESSEE HAS FAILED TO DEDUCT TAX ON INTEREST PAYMENT MADE AS PER THE PROVISIONS OF SECTION 194A AS DISCUSSED IN PARA 7 OF PAGE NO. 7 OF THE APPEAL ORDER.' (III) 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT (A) ERRED IN RESTRICTING THE ADDITION U/S. 69 AS UNEXPLAINED INVESTMENT FROM RS . 83,01,010/ - TO RS 1,89,000/ - WITHOUT EXPLAINING THE SOURCE OF INVESTMENT IN THE ASSETS BY THE ASSESSEE.' (IV) 'THE APPELLANT PRAYS THAT THE ORDER OF THE LD. CIT(A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE A.O. BE RESTORED.' 4. FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORTATION. THE RETURN OF INCOME WAS F ILED AT A LOSS OF RS.15.43 LACS. THE CASE WAS TAKEN INTO SCRUTINY AND THE A.O. ISSUED VARIOUS NOTICES U/S. 143(2) AND 142 (1) OF THE ACT, H OWEVER, THE ASSESSEE FAILED TO APPEAR AND NO DETAIL WAS FILED. ACCORDINGLY, THE A.O. PROCEEDED TO ASSESS THE INCOME U/S . 144 OF THE ACT . BECA U SE OF THE FAILURE OF THE ASSESSEE TO APPEAR IN COMPLIANCE TO THE NOTICE ISSUED U/S. 143(2) AND 14 2 (1), THE A.O. A LSO LEVIED PENALTY U/S. 271(1)(B ) OF THE ACT. 5. BECAUSE OF NON SUBMISSION OF VARIOUS DETAILS CALLED BY THE A.O., THE B OOKS OF ACCOUNTS WAS REJECTED AND NET PROFIT RATE OF 8% WAS APPLIED, ACCORDINGLY, AN ADDITION OF 3 ITA NO. 2850/MUM/2013 (A.Y. 2008 - 09) ASST. CIT VS. SMT ASHA TILAKRAJ SHARMA RS.21,50,034/ - WAS MADE. WE FOUND THAT THE LD. C IT(A) HAS CALLED FOR A REMAND REPORT AND AFTER CONSIDERING THE REMAND REPORT, THE LD. C IT(A) HAS DELETED THE AD DITION MADE BY ESTIMATING THE NET PROFIT, AFTER OBSERVING AS UNDER: AS PER REMAND REPORT OF THE AO,, THE APPELLANT HAD PRODUCED VARIOUS DETAILS OF EXPENSES AND ALSO PRODUCED LEDGER BEFORE THE A.O. WHO WENT THROUGH THE SAME. NO ADVERSE COMMENTS HAD BEEN MA DE IN THE REMAND REPORT, AGAINST THE RATIO OF EXPENSES OR INFLATION OF EXPENSES. IN THE REMAND REPORT THE A.O. HAS NOT MADE ANY ADVERSE COMMENT ON THE ISSUE OF GROSS PROFIT AND NET PROFIT. THEREFORE, THE SAME IS DEEMED TO HAVE BEEN ACCEPTED BY THE A.O. UND ER THE CIRCUMSTANCES, IN THE ABSENCE OF ANY ADVERSE COMMENT FROM THE A.O., THE ADDITION OF RS.6,06,145/ - IS DELETED. 6. IT IS CLEAR FROM THE ABOVE THAT IN THE REMAND PROCEEDING, THE ASSESSEE HAS PRODUCED VARIOUS DETAILS OF EXPENSES AND ALSO PRODUCED LEDG ER. SINCE NO ADVERSE COMMENT WAS MADE IN THE REMAND REPORT, THE LD. CIT(A) DELETED THE ADDITION MADE ON ACCOUNT OF ESTIMATION OF NET PROFIT RATE. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR DELETING THE SAID ADDITION. 7. THE A.O. HAS A LSO MADE AN ADDITION U/S. 69 ON ACCOUNT OF UNEXPLAINED INVESTMENT TO THE EXTENT OF RS.83,01,010/ - . BY THE IMPUGNED ORDER, THE LD. CIT(A) AFTER CONSIDERING THE REMAND REPORT RESTRICTED THE ADDITION TO THE EXTENT OF RS.1,89,000/ - . THE PRECISE OBSERVATION OF THE LD. CIT(A) WAS AS UNDER: REGARDING UNSECURED LOAN, THE A. O . HAS COMMENTED THAT RELEVANT CONFIRMATIONS WERE FILED BEFORE HIM EXCEPT REGARDING LOAN OBTAINED FROM SHAHBAZ AMOUNTING TO RS.1,62,444/ - . NO FURTHER FRUITFUL EXPLANATION H A S BEEN OFFERED BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS. THEREFORE, ADDITION UNDER THE HEADING UNSECURED LOAN IS RESTRICTED TO RS., 1 ,62,444/ - AND THE BALANCE OF RS.84,23,678/ - IS DELETED. 8. IT IS CLEAR FROM THE REMAND REPORT THAT EXCEPT THE LOAN OBTAINED FROM SHAHB AZ, A MOUNTING TO RS.1 , 62 , 444/ - , THE A.O. WAS SATISFIED . ACCORDINGLY, THE CIT(A) HAS DELETED ADDITION MADE U/S.69 EXCEPT LOAN FROM SHAHBAZ AMOUNTING TO RS.1,62,444/ - . 4 ITA NO. 2850/MUM/2013 (A.Y. 2008 - 09) ASST. CIT VS. SMT ASHA TILAKRAJ SHARMA ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) FOR UPHOLDING T HE ADDITION U/S. 69 TO THE EXTENT OF RS.1,62,444/ - . 9. THE A.O. HAS ALSO MADE AN ADDITION OF RS.5,70,000/ - U/S. 40(A)(IA) ON THE PLEA THAT THE ASSESSE E HAS FAILED TO DEDUCT TAX ON INTEREST PAYMENT MADE AS PER THE PROVISIONS OF SECTION 194A. 10. WE HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND THAT IN PARA 7, PAGE 7, THE LD. CIT(A) HAS MENTIONED THAT AS PER THE REMAND REPORT, THE A.O. HAS PAID AN AMOUNT OF RS.5,70,894/ - AS INTEREST ON THE LOAN OBTAINED FROM TATA MOTORS, HDFC BANK CASH LO AN AND ICICI CASH LOAN. OUT OF THE TOTAL INTEREST PAID RS.54 , 7 46/ - W AS FOUND TO BE PAID TO TATA MOTORS FINANCE LTD. SINCE THE TURNOVER OF THE ASSESS EE WAS MORE THAN THE LIMIT PRESCRIBED U/S. 44AB, THE ASSESSEE WAS LIABLE TO DEDUCT TAX WITH RESPECT TO THE I NTEREST PAID ON TATA MOTORS. HOWEVER, WITHOUT GIVING ANY JUSTIFICATION, THE LD. CIT(A) HAS ALSO DELETED THE INTEREST PAYMENT TO T A TA MOTORS , ON WHICH NO TAX HAD BEEN DEDUCTED. ACCORDINGLY, WE CONFIRM THE ADDITION OF RS.54,746/ - U/S. 40(A)(IA). 11. IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 31/08/2017 SD / - SD/ - ( AMARJIT SINGH ) ( R. C. SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBAI ; / DATED : 31 / 08 / 2017 5 ITA NO. 2850/MUM/2013 (A.Y. 2008 - 09) ASST. CIT VS. SMT ASHA TILAKRAJ SHARMA . . ./ ROSHANI , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RE SPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY O RDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI