DCIT 13(1), MUMBAI V. HAJI EBRAHIM HUSSAIN & SONS, MUMBAI

ITA 2962/MUM/2013

• Counselvise Citation: 296219914 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 02-03-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 17-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBEDR
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Opportunity of being heard; Principle of natural justice; Additional evidence
• Section: 142(1)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES H, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.2961 AND 2962/MUM/2013 ASSESSMENT YEARS: 2008-09 AND 2009-10 DY. C.I.T.-13(1), ROOM NO.-418 AAYAKAR BHAVAN, M.K.MARG, MUMBAI-400020 / VS. M/S HAJI EBRAHIM HUSSAIN & SONS, 109B/110, 1 ST FLOOR, PARVATI INDUSTRIAL ESTATE PREMISES, NEW SUNMILL COMPOUND LOWER PAREL, MUMBAI-400013 ( / REVENUE) ( /ASSESSEE) P.A. NO. A ACFHY1520N / REVENUE BY SHRI SACHIDANAND DUBE-DR / ASSESSEE BY: SHRI M. SUBRAMANIAN ! ' / DATE OF HEARING : 02/03/2015 ! ' /DATE OF ORDER 02/03/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : BOTH THESE APPEAL ARE BY THE REVENUE CHALLENGING TH E IMPUGNED ORDERS, DATED 31/01/2013, OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, DELETING THE DISALLOWANCE OF RS.3,26,58,013/- (A.Y. 2008-09) AND RS.3,23,73,067/ - MADE M/S HAJI EBRAHIM HUSSAIN & SONS . 2 ON ACCOUNT OF DISCREPANCY IN THE GROSS RECEIPTS DEB ITED TO PROFIT AND LOSS ACCOUNT AND RECEIPT AS PER FORM NO. 16A, FILED BY THE ASSESSEE, WITHOUT SUBSTANTIATING ITS CLAIM A ND FURTHER ADMITTING THE ADDITIONAL EVIDENCE BY THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) CONTRAVENING THE PROVISIONS OF RULE 46A OF THE INCOME TAX RULES, 1962 (HEREINAFTER THE RULE S). 2. DURING HEARING OF THESE APPEALS, THE LD. DR, SHR I SACHIDANAND DUBE ADVANCED HIS ARGUMENTS, WHICH ARE IDENTICAL TO THE GROUND RAISED BY SUBMITTING THAT T HERE IS CLEAR CONTRAVENTION OF THE PROVISIONS OF RULE-46A OF THE INCOME TAX RULES. ON THE OTHER HAND, SHRI M. SUBRAMANIAN, LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT IN THE REASONS RECO RDED, THERE IS NO MENTION OF ESCAPEMENT OF INCOME AND FURTHER C ONTENDED THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) R EACHED TO A PARTICULAR CONCLUSION AFTER DUE APPLICATION OF MI ND AND ANALYZING THE FACTS. THE IMPUGNED ORDERS WERE DEFE NDED. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRI EF, ARE THAT THE ASSESSEE IS A CUSTOM CLEARING AND FORWARDING AG ENT, DECLARED INCOME OF RS. 55,53,655/- IN ITS RETURN ON 29/09/2008 (AY 2008-09) AND RS.73,41,332/-(AY 2009- 10) ON 23/09/2009, WHICH WERE PROCESSED U/S 143(1) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) ON 28/08 /2009 AND 25/09/2010 RESPECTIVELY. FOR ASSESSMENT YEAR 2008- 09, THE DEMAND WAS DETERMINED AT RS.20,71,310/- WHEREAS FOR AY 200-10, IT WAS RAISED AT RS.27,60,730/-. IT WAS NO TICED BY THE LD. ASSESSING OFFICER THAT THE ASSESSEE DISCLOSED G ROSS RECEIPTS OF RS.2,59,28,221/-, WHEREAS AS PER TDS CERTIFICATE , SUCH M/S HAJI EBRAHIM HUSSAIN & SONS . 3 RECEIPTS WERE TO THE TUNE OF RS.5,85,86,252/-. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY, THEREFORE, NOTI CE U/S 143(2) OF THE ACT DATED 14/09/2010 WAS SERVED UPON THE ASS ESSEE. ANOTHER LIKE NOTICE DATED 23/09/2010 WAS ALSO SERVE D UPON THE ASSESSEE. NOTICE U/S 142(1) OF THE ACT DATED 1 7/01/2011 ALONGWITH DETAILED QUESTIONNAIRE WAS SERVED UPON TH E ASSESSEE, IN RESPONSE TO THESE NOTICES, THE ASSESSE E ATTENDED THE PROCEEDINGS AND FILED THE DETAILS FOR VERIFICAT ION. THE ASSESSEE NEVER OBJECTED TO THE REASONS RECORDED BY THE ASSESSING OFFICER AND ATTENDED THE PROCEEDINGS. TH E ASSESSEE IN ITS PROFIT AND LOSS ACCOUNT, DEBITED EXPENSES TO THE TUNE OF RS.89,68,502/- (AY 2009-10) AND RS.74,55,535/- FOR ASSESSMENT YEAR 2008-09. FURTHER, THE ASSESSING OFF ICER FROM PROFIT AND LOSS ACCOUNTS OF THE ASSESSEE FOUND DISC REPANCIES BETWEEN THE GROSS RECEIPTS AS PER FORM NO. 16A AND CREDITED TO THE PROFIT AND LOSS ACCOUNT. AS PER TOTAL CREDI T, GROSS RECEIPTS (FORM NO.16A) IT WORKS OUT TO RS.5,85,86,2 52/-, WHEREAS, AS PER DISCLOSED GROSS RECEIPTS, THE AMOUN T WAS RS.2,59,28,321/-. THE ASSESSEE WAS ASKED TO EXPLAI N AS TO WHY THE DIFFERENCE OF RS.3,26,58,031/- (AY 2008-09) AND RS.3,24,73,067/- (AY 2009-10) MAY NOT BE ADDED TO I TS INCOME. IN SPITE OF VARIOUS OPPORTUNITIES, THE ASS ESSEE DID NOT FURNISH EXPLANATION TO THE SATISFACTION OF THE ASSE SSING OFFICER EXCEPT CLAIMING THAT THE GROSS RECEIPT WAS RS.12,81 ,94,620/- (A.Y. 2008-09) AND RS.18,27,10,811/- (A.Y. 2009-10) . IN THE ABSENCE OF SATISFACTORY EXPLANATION, THE DIFFERENTI AL AMOUNTS WERE ADDED UNDER THE HEAD INCOME FROM BUSINESS. THE RELEVANT FINDING FROM THE ASSESSMENT ORDER (2008-09 ) IS REPRODUCED HEREUNDER FOR READY REFERENCE:- M/S HAJI EBRAHIM HUSSAIN & SONS . 4 10.2. IN RESPONSE THERETO, ASSESSEE VIDE LETTER DA TED 08/11/2011 HAS FILED SALES ACCOUNT WHEREFROM IT IS SEEN THAT THE ASSESSEE HAS SHOWN GROSS RECEIPTS OF RS.12,81,9 4,620/- AND DEBITED EXPENDITURES OF RS.10,26,73,305/- THERE BY CREDITING A SUM OF RS.2,55,21,314/- TO THE P & L AC COUNT FOR THE YEAR ENDED 31/03/2008. THE ASSESSEE WAS REQUES TED TO GIVE THE PARTY-WISE DETAILS OF THE EXPENSES OF RS.10,26,73,305/- WHICH WAS DEBITED TO THE SALES AC COUNT AGAINST THE CREDITS OF RS.12,81,94,620/-. THE ASSE SSEE HAS FURTHER STATED THAT WHAT WAS CREDITED TO THE P & L ACCOUNT FOR THE RELEVANT PERIOD WAS ONLY THE AGENCY COMMISSION OF RS.2,55,21,314/-. THE ASSESSEE HAS VIDE LETTER DAT ED 05/12/2011 HAS SUBMITTED THE TDS DETAILS FOR A.Y. 2 008-09, PHOTOCOPIES OF THE LEDGER ACCOUNT OF FEW OF THE PAR TIES. IT IS SEEN FROM THE STATEMENT GIVEN BY THE ASSESSEE VIDE THE SAID SUBMISSIONS THAT THE ASSESSEE HAD SHOWN SALES OF RS.8,12,18,528/- WHEREIN THE TAX WAS DEDUCTED AT SO URCE ON A SUM OF RS.5,81,85,352/- FOR WHICH CERTIFICATES IN FORM NO.16A ARE FILED. THE ASSESSEE HAS ATTEMPTED TO BR ING THE GROSS SALES OF RS.12,81,94,620/- BY STATING THAT ON THE BILL AMOUNT OF RS.4,79,76,092/- THE PAYERS HAD NOT DEDUC TED TAX AT SOURCE. IF THE ASSESSEES SUBMISSIONS ARE TO BE ACCEPTED, THEN THERE IS NO REASON WHY THE PAYERS HAVE DEDUCTE D TAX AT SOURCE ON THE HIGHER SUMS. THE ASSESSEE WAS NOT FO RTHCOMING WITH ANY SATISFACTORY EXPLANATION, DESPITE REPEATED OPPORTUNITIES, EXCEPT HARPING THAT IT HAS SOWN GROS S RECEIPTS OF RS.12,81,94,620/-. IN THE CIRCUMSTANCES, THE DIFFE RENCE OF RS.3,26,58,031/- IS ADDED IN THE HANDS OF THE ASSES SEE UNDER THE HEAD INCOME FROM BUSINESS. M/S HAJI EBRAHIM HUSSAIN & SONS . 5 2.2. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INCO ME TAX (APPEALS), WE FIND THAT THE LD. FIRST APPELLATE AUT HORITY NEITHER MET OUT WITH THE OBJECTIONS/OBSERVATIONS MADE IN TH E ASSESSMENT ORDER NOR SOUGHT A REMAND REPORT FROM TH E LD. ASSESSING OFFICER, THUS, THERE IS CLEAR CONTRAVENTI ON OF RULE 46A OF THE I.T. RULES, 1962, MORE SPECIFICALLY WHEN , THE PAYERS DEDUCTED TAX AT SOURCE ON THE HIGHER FIGURES AND TH E ASSESSEE DID NOT SATISFACTORILY EXPLAINED THE FACTUAL MATRIX DESPITE REPEATED OPPORTUNITIES, CONSEQUENTLY, KEEPING IN VI EW, THE PRINCIPAL OF NATURAL JUSTICE AND NO PREJUDICE IS CA USED TO EITHER SIDE, WE SET ASIDE THE ORDER OF THE LD. COMM ISSIONER OF INCOME TAX (APPEALS) AND REMAND BOTH THESE APPEALS TO THE FILE OF THE LD. ASSESSING OFFICER TO EXAMINE THE CL AIM OF THE ASSESSEE AND DECIDE IN ACCORDANCE WITH LAW. THE ASS ESSEE BE PROVIDED DUE OPPORTUNITY OF BEING HEARD WITH FURTHE R LIBERTY TO FURNISH EVIDENCE, IF ANY, IN SUPPORT OF ITS CLAIM. THUS, THE APPEALS OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSE ONLY. FINALLY, BOTH THE APPEALS OF THE REVENUE ARE ALLOWE D FOR STATISTICAL PURPOSE ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES, AT THE CONCLUSION OF THE HEARING, ON 02/03/2015 . SD/- (RAJENDRA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER MUMBAI; % DATED : 02/03/2015 F{X~{T? P.S/. .. M/S HAJI EBRAHIM HUSSAIN & SONS . 6 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. '( )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. - - . ( '( ) / THE CIT, MUMBAI. 4. - - . / CIT(A)- , MUMBAI 5. 012 +3 , - '( ' '34 , / DR, ITAT, MUMBAI 6. 25 6 / GUARD FILE. / BY ORDER, ,0( + //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI