NILESH SOLANKI, MUMBAI V. ITO 32(2)(4), MUMBAI

ITA 3170/MUM/2017

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9419 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 02-05-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HEMALATHA
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER ITA NO.3170/MUM/2017 (ASSESSMENT YEAR 2011-12) MR. NILESH SOLANKI, SHOP NO.6 & 7,PANDIT CHAWL, CARTERROAD NO.3, BORIVALI (E), MUMBAI 400 066 PAN:ANUPS2162 ...... APPELLANT VS. THE INCOME TAX OFFICER 32(2)(4), MUMBAI. .... RESP ONDENT APPELLANT BY : SHRI ANIL THAKKAR RESPONDENT BY : MS. HEMALATHA DATE OF HEARING : 12/07/2017 DATE OF PRONOUNCEMENT : 06/10/2017 ORDER THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERTA INING TO ASSESSMENT YEAR 2011-12 IS DIRECTED AGAINST AN ORDER PASSED BY CIT(A)-44 MUMBAI DATED 14/02/2017, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 18/03/2014. 2. IN THIS APPEAL, THE ONLY ADDITION IN DISPUTE I S A SUM OF RS.14,04,320/- (ASSESSEES SHARE BEING 50% I.E. RS.7,02,160/-) MADE TO THE RETURNED INCOME ON ACCOUNT OF UNPROVED LIABILITY. IN BRIEF, THE RE LEVANT FACTS ARE THAT ASSESSEE IS ENGAGED IN THE BUSINESS OF EMBROIDERY WORK AND DUR ING THE YEAR UNDER 2 ITA NO.3170/MUM/2017 (ASSESSMENT YEAR 2011-12) CONSIDERATION HE ALONG WITH HIS BROTHER HAD CONSTRU CTED A FACTORY SHED ON THE LAND OWNED BY THEM, WHICH WAS SOLD FOR A TOTAL CONS IDERATION OF RS.60,00,000/- . IN PARA-5 OF THE ASSESSMENT ORDER ASSESSING OF FICER HAS REPRODUCED THE WORKING OF THE PROFIT EARNED BY THE ASSESSEE ON SUC H TRANSACTION AT RS.67,258/- AND ASSESSEES SHARE BEING RS.33,629/- ( I.E. 50%). IN THE SAID WORKING, TOTAL COST OF CONSTRUCTION INCLUDING COST OF PURCHASE OF PLOT HAS BEEN SHOWN AT RS.58,32,742/-. THE ASSESSING OFFICER HAS NOT ACCEP TED THE EXPENDITURE OF RS.14,04,320/- COMPRISING OF PAINTING TO WORK INSID E, PAINTING TO WORK OUTSIDE, PAVER BLOCK PURCHASE, ELECTRICAL FITTINGS/FIXTURES AND OTHER PURCHASES/WAGES PAID. THE ASSESSING OFFICER HAS DISCUSSED THE ISSU E AT PARA 5.3 OF THE ASSESSMENT ORDER AND REJECTED THE AFORESAID EXPENDI TURE AS BEING UNPROVED ON THE GROUND THAT ASSESSEE HAS NOT SUBMITTED REQUI SITE EVIDENCE IN THE FORM IDENTITY OF PERSONS OR PROPER BILLS/VOUCHERS, ETC. 3. BEFORE THE CIT(A), ASSESSEE FURNISHED COMPLETE DETAILS , BUT CIT(A) DID NOT CONSIDER SUCH EVIDENCE ON THE GROUND THAT IT WA S AN ADDITIONAL EVIDENCE WHICH WAS NOT PRODUCED BEFORE THE ASSESSING OFFIC ER. AS PER THE CIT(A), NONE OF THE CONDITIONS PRESCRIBED IN RULE 46A OF THE INC OME TAX RULES, 1962 ( IN SHORT THE RULES) GOVERNING THE ADMISSION OF ADDI TIONAL EVIDENCE WERE FULFILLED AND, THEREFORE, HE AFFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. 4. BEFORE ME, LD. REPRESENTATIVE FOR THE ASSESSEE P OINTED OUT THAT THE ADDITIONAL EVIDENCE PRODUCED BY THE ASSESSEE SHOWED COMPLETE DETAILS OF THE IMPUGNED EXPENDITURE AND THAT THERE WAS NO JUSTIFI CATION TO REJECT THE SAME, INASMUCH AS, ASSESSEE WAS NEVER CALLED UPON TO PROD UCE SUCH DETAILS BY THE ASSESSING OFFICER. HE, THEREFORE, CONTENDED THAT T HE CIT(A) HAS WRONGLY 3 ITA NO.3170/MUM/2017 (ASSESSMENT YEAR 2011-12) REJECTED THE EVIDENCE AND SUBMITTED THAT THE MATTER BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER FOR APPROPRIATE APPRE CIATION OF THE DETAILS OF EXPENDITURE. 5. BEFORE ME, THE LD. DEPARTMENTAL REPRESENTATIVE H AS DEFENDED THE FINDING OF THE ASSESSING OFFICER AS WELL AS CIT(A) BY POINTING OUT THAT IT WAS FOR THE ASSESSEE TO PRODUCE THE EVIDENCE FOR JUSTIFICAT ION OF THE EXPENDITURE. 6. I HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSION S. OSTENSIBLY, THE AFORENOTED EXPENSES HAVE BEEN REJECTED BY THE ASSE SSING OFFICER PRIMARILY ON THE GROUND THAT ASSESSEE NEITHER FURNISHED THE EVI DENCE NOR EXPLAINED THE RATIONALE FOR INCURRING SUCH EXPENDITURE. THE COU NTER PLEA OF THE ASSESSEE IS THAT HE WAS NEVER CALLED UPON TO PRODUCE SUCH DETA ILS BY THE ASSESSING OFFICER AND WHEN HE PRODUCED THE SAME, THE CIT(A) H AS SUMMARILY REJECTED THE CLAIM OF EXPENDITURE. I FIND WEIGHT IN THE PLEA SOUGHT TO BE RAISED BY THE ASSESSEE BECAUSE IN PARA-5.1 OF THE ASSESSMENT ORD ER THE ASSESSING OFFICER HAS REPRODUCED THE QUERY LETTER DATED 07/2/2014 ADD RESSED TO THE ASSESSEE ON THIS ASPECT. IN THE SAID COMMUNICATION THERE IS NO REQUIREMENT PUT TO THE ASSESSEE TO EXPLAIN THE RATIONALE OR FURNISH THE D ETAILS OF THE IMPUGNED EXPENDITURE. SO HOWEVER, THEREAFTER, IN PARA 5.3, THE ASSESSING OFFICER HAS DISALLOWED THE EXPENSES CLAIMED BY THE ASSESSEE ON PAINTING TO WORK INSIDE, PAINTING TO WORK OUTSIDE, PAVER BLOCK PURCHASE, ELE CTRICAL FITTINGS/FIXTURES AND OTHER PURCHASES/WAGES PAID OF RS.14,04,320/- ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED THE REQUISITE EVIDENCE. IN MY VI EW, IT WOULD BE IN THE FITNESS OF THINGS THAT THE ASSESSEE MAY BE ALLOWED TO FURNI SH REQUISITE DETAILS AND ONLY THEREAFTER, THE ASSESSING OFFICER MAY DECIDE THE ISSUE AFRESH AS PER LAW. ACCORDINGLY, THE MATTER IS RESTORED BACK TO THE FIL E OF THE ASSESSING OFFICER. 4 ITA NO.3170/MUM/2017 (ASSESSMENT YEAR 2011-12) NEEDLESS TO SAY, THE ASSESSING OFFICER SHALL ALLO W THE ASSESSEE A REASONABLE OPPORTUNITY TO PRODUCE REQUISITE EVIDENCE IN RELATI ON TO THE EXPENDITURE OF RS.14,04,320/- AND ONLY THEREAFTER, DECIDE THE ISS UE AFRESH AS PER LAW. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 06/10/2017 SD/- (G.S.PANNU) ACCOCUNTANT MEMBER MUMBAI, DATED 06/10/2017 VM , SR. PS 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