ACIT 3(1)(2), MUMBAI V. GREEN HABITATES PVT. LTD., MUMBAI

ITA 3039/MUM/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6902 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 26-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: CHETAN A KARIA
• Keywords: Rejection of books of accounts
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G, MUMBAI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.3039/M/2016 ASSESSMENT YEAR: 2011-12 ACIT 3(1)(2), ROOM NO.607, 6 TH FLOOR, AAYAKAR BHAVAN, MUMBAI - 400020 VS. M/S. GREEN HABITATS PVT. LTD., 514, DALAMAL TOWERS, 211, FREE PRESS JOURNAL MARG, NARIMAN POINT, MUMBAI 21 PAN: AACCG 6559P (APPELLANT) (RE SPONDENT) PRESENT FOR: ASSESSEE BY : SHRI CHETAN A. KARIA, A.R. REVENUE BY : SHRI V. VIDHYADHAR, D.R. DATE OF HEARING : 16.04.2018 DATE OF PRONOUNCEMENT : 12.06.2018 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE REVEN UE AGAINST THE ORDER DATED 28.01.2016 OF THE COMMISSIONE R OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS TH E CIT(A)] RELEVANT TO ASSESSMENT YEAR 2011-12. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: '1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITIONS MADE BY THE AO U/S.68 AMOUNTING TO RS.85,09,977/- BY DISALLOWING THE SUNDRY CREDITO RS? 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW, THE LD. CIT(A) FAILED TO APPRECIATE THE FACT THAT THE ONUS LIES ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE CREDITORS AND THE ASSE SSEE HAS FAILED TO FILE ANY CONFIRMATION FROM THE CREDITOR WITHOUT ANY JUSTIFICATION IN SPITE ITA NO.3039/M/2016 M/S. GREEN HABITATS PVT. LTD. 2 OF SUFFICIENT TIME AND OPPORTUNITY PROVIDED BY THE ASSESSING OFFICER? 3. THE APPELLANT PRAYS THAT THE ORDER OF CIT (A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTO RED. 4. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY NECESSARY. 3. THE ONLY ISSUE RAISED BY THE REVENUE IS AGAINST THE DELETION OF ADDITION TO THE TUNE OF RS.85,09,977/- AS MADE BY THE AO ON ACCOUNT OF SUNDRY CREDITORS UNDER SECTION 68 OF THE ACT. THE REVENUE HAS ALSO CHALLENGED THAT LD. CIT(A ) HAS FAILED TO APPRECIATE THAT ONUS WAS ON THE ASSESSEE TO PROVE THE GENUINENESS OF THE CREDITORS. 4. THE FACTS IN BRIEF ARE THAT THE AO OBSERVED THAT ASSESSEE HAS SHOWN SUNDRY CREDITORS OF RS.85,09,977/- AND HE A SKED THE ASSESSEE TO FILE THE DETAILS OF THE CREDITORS A LONG WITH CONFIRMATIONS. THE ASSESSEE FILED THE DETAILS IN R ESPECT OF THE CREDITORS VIDE LETTER DATED 16.12.2013 BUT FAILED TO FILE CONFIRMATIONS FROM THE SUNDRY CREDITORS. THE AO THE REAFTER AGAIN ISSUED A SHOW CAUSE NOTICE ON THE ASSESSEE BU T DESPITE THAT ALSO THE ASSESSEE COULD NOT FILE THE CONFIRMAT IONS. THE ASSESSEE ALSO SUBMITTED THAT THESE CREDITORS WERE O N ACCOUNT OF ADVANCES RECEIVED FROM THE CUSTOMERS AND NO REVE NUE WAS RECOGNIZED IN RESPECT OF THESE ADVANCES. FINALLY, TH E AO HELD THAT THE AMOUNT OF SUCH CREDITORS RS.85,09,977/- WAS NOT VERIFIABLE AND THEREFORE ADDED THE SAME TO THE INCO ME OF THE ASSESSEE. 5. IN THE APPELLATE PROCEEDINGS THE LD. CIT(A) DELET ED THE ADDITIONS AFTER CONSIDERING THE SUBMISSIONS AND CON TENTIONS ITA NO.3039/M/2016 M/S. GREEN HABITATS PVT. LTD. 3 RAISED BY THE ASSESSEE DURING THE APPELLATE PROCEED INGS BY OBSERVING AND HOLDING AS UNDER: 5.1.5 IN THE INSTANT CASE THE ASSESSING OFFICER HAS NOT REJECTED THE BOOKS OF ACCOUNTS OF THE APPELLANT, NOT CHALLENGED THE CONTENTION THAT SUNDRY CREDITORS WERE CUSTOMERS WHO HAD MADE BOOKIN GS WITH THE APPELLANT AND THE AMOUNTS REFLECTING IN THE LIST OF SUNDRY CREDITORS REPRESENTED BOOKING ADVANCE RECEIVED BY THE APPELLA NT. HE HAS ALSO NOT REJECTED THE EVIDENCE OF BANK RECEIPT FOR ALL T HE ADVANCES OR THE BANK STATEMENT OF THE APPELLANT REFLECTING THOSE RE CEIPTS. SINCE THE NAMES, ADDRESSES AND AMOUNTS OF EACH OF THE CUSTOME RS WAS MADE AVAILABLE TO THE ASSESSING OFFICER, HE COULD HAVE D IRECTLY MADE FURTHER ENQUIRIES FROM THOSE CUSTOMERS BUT HAS NOT DONE SO. THEREFORE, IN THE INSTANT CASE, I CANNOT SEE ANY REASON ATTRIBUTED BY THE ASSESSING OFFICER TO HAVE REJECTED THE EXPLANATION OFFERED BY THE APP ELLANT MERELY ON THE GROUND THAT THE APPELLANT DID NOT SUBMIT CONFIRMATI ONS FROM THE SAID CUSTOMERS, WITHOUT REJECTING PROOF OF PAYMENT THROU GH BANKING CHANNELS OR WITHOUT MAKING ANY EFFORT TO OBTAIN CON FIRMATIONS FROM THEM DESPITE THE FACTS THAT ALL NAMES AND ADDRESSES WERE SUBMITTED BY THE APPELLANT DURING THE COURSE OF ASSESSMENT PROCE EDINGS. IT IS SEEN THAT THE DETAILS WERE SUBMITTED BY THE APPELLANT VI DE LETTER DATED 16/12/2013 WHILE THE ASSESSING OFFICER HAS PASSED O RDER UNDER SECTION 143 (3) ON 26/03/2014. THERE WAS AMPLE TIME FOR THE ASSESSING OFFICER TO MAKE FURTHER INVESTIGATION AND DIRECT ENQUIRIES HIMSELF. 5.1.6 DURING THE COURSE OF APPEAL PROCEEDINGS, THE APPELLANT OF SALE AGREEMENTS IN RESPECT OF ALL THE PARTIES IN THE LIS T OF SUNDRY CREDITORS MENTIONED IN LETTER DATED 16/12/2013 FILED BEFORE T HE ASSESSING OFFICER TO CORROBORATE ITS CONTENTIONS. ALTHOUGH, NOT MATERIAL IN DECIDING THE ISSUE, THESE COPIES OF REGISTERED SALE DEEDS FURTHER SUPPORT AND SUBSTANTIATE THE CONTENTION OF THE APPE LLANT REGARDING THE GENUINENESS OF THE TRANSACTIONS. SIMILARLY, IN RESPECT OF AUDIT FEES PAID TO BSR & CO, IT IS SEEN FROM THE LEDGER ACCOUN T AND BANK STATEMENT OF APPELLANT THAT THE SAME HAVE BEEN PAID . AS OBSERVED ABOVE, COPIES OF BANK STATEMENTS WERE ALSO SUBMITTE D TO THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEED ING BUT HE HAS MADE NO COMMENTS ON THE SAME. 5.1.7 UNDER THE CIRCUMSTANCES AND IN VIEW OF THE RA TIOS OF VARIOUS JUDGEMENTS CITED ABOVE, I DO NOT FIND MERIT IN THE CONCLUSION OF THE ASSESSING OFFICER AND FIND THE ADDITION UNJUSTIFIED . THEREFORE, ADDITION ITA NO.3039/M/2016 M/S. GREEN HABITATS PVT. LTD. 4 OF RS. 85,09,977/- UNDER SECTION 68 IS DELETED AND THIS GROUND OF APPEAL IS ALLOWED. 6. THE LD. D.R. SUBMITTED BEFORE US THAT THE FIRST A PPELLATE AUTHORITY HAS ERRED ON FACTS AND LAW BY DELETING TH E ADDITION AS MADE BY THE AO ON ACCOUNT OF NON VERIFICATION OF THE SUNDRY CREDITS OF RS.85,09,977/-. THE LD. D.R. CONTEN DED THAT DESPITE THE REPEATED OPPORTUNITIES THE ASSESSEE HAS NOT FILED ANY CONFIRMATIONS FROM THE SAID CREDITORS AND THERE FORE UNDER THESE CIRCUMSTANCES THE AO HAD NO OPTION BUT TO ADD THE SAME TO THE INCOME OF THE ASSESSEE FOR THE WANT OF VERIFICATION AS TO GENUINENESS AND CREDITWORTHINESS. THE LD. CI T(A) DELETED THE SAME MERELY ON THE GROUND THAT ASSESSEE HAS FILED ALL THE NECESSARY DETAILS IN RESPECT OF THE SUNDRY CREDITORS BEFORE THE AO AND AO HAS FAILED TO CARRY OUT ANY FU RTHER VERIFICATION. UNDER THESE CIRCUMSTANCES ORDER PASSE D BY THE FIRST APPELLATE AUTHORITY IS BAD IN LAW AND HAS TO BE REVERSED. 7. THE LD. A.R., ON THE OTHER HAND, SUBMITTED THAT TH E FIRST APPELLATE AUTHORITY HAS PASSED THE ORDER DELETING T HE ADDITION ON ACCOUNT OF SUNDRY CREDITORS AFTER TAKING INTO AC COUNT THE CONTENTIONS AND SUBMISSIONS OF THE ASSESSEE AS MADE BEFORE THE AO ALSO DURING THE COURSE OF ASSESSMENT PROCEED INGS. THE LD. A.R. SUBMITTED THAT THE ASSESSEE HAS FILED ALL THE DETAILS QUA THE SAID CREDITORS BEFORE THE AO BUT AO WITHOUT DOING ANY FURTHER VERIFICATION/INVESTIGATION TO VER IFY THE GENUINENESS ON SAID CREDITORS ADDED THE SAME TO THE INCOME OF THE ASSESSEE BY JUST HOLDING THAT THE ASSESSEE H AS FAILED TO PRODUCE THE CONFIRMATIONS FROM THE SAID CREDITORS. THE LD. A.R. FURTHER SUBMITTED THAT THE FIRST APPELLATE AUTHO RITY HAS ITA NO.3039/M/2016 M/S. GREEN HABITATS PVT. LTD. 5 PASSED VERY DETAILED AND WELL REASONED ORDER WHICH NEEDS TO BE AFFIRMED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. AS IS APPARENT F ROM THE RECORDS BEFORE US, THE AO HAS ADDED THE SUNDRY CRE DITORS MERELY ON THE GROUND THAT ASSESSEE HAS NOT FILED TH E CONFIRMATIONS DESPITE THE FACT THAT THE ASSESSEE FI LED ALL THE NECESSARY DETAILS BEFORE THE AO. IN THE APPELLATE P ROCEEDINGS ALSO THE LD. A.R. REITERATED HIS ARGUMENTS AND FILED THE NECESSARY DETAILS IN RESPECT OF THE SUNDRY CREDITOR S. THE LD. CIT(A), AFTER CONSIDERING ALL THE LEGAL ASPECTS AS W ELL AS EXAMINING THE MATTER FACTUALLY, DELETED THE SAID ADD ITION BY PASSING A VERY REASONED AND COMPREHENSIVE ORDER. I N OUR OPINION, THE LD. CIT(A) HAS TAKEN INTO ACCOUNT ALL T HE ASPECTS OF THE MATTER AND WE ARE OF THE CONSIDERED VIEW THA T THE ORDER OF LD. CIT(A) BEING WELL REASONED NEEDS TO BE UPHEL D. ACCORDINGLY, WE UPHOLD THE ORDER OF LD. CIT(A) BY DI SMISSING THE APPEAL OF THE REVENUE. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 12.06.2018. SD/- SD/- (SAKTIJIT DEY) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 12.06.2018. * KISHORE, SR. P.S. ITA NO.3039/M/2016 M/S. GREEN HABITATS PVT. LTD. 6 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY /ASSTT. REGISTRAR, ITAT, MUMBAI.