PRATIBHA JAGDISH THOTANGARE, THANE V. CIT II, THANE

ITA 3273/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8375 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 23-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SHIR SANJAY SINGH
• Assessee Lawyers: G P MEHTA
• Section: 40A(3); 80C; 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.3273 /MUM./2014 ( ASSESSMENT YEAR : 2009 - 10 ) PRATIBHA JAGDISH THOTANGARE, AT KANDIVALI TAL WADA, THANE, MUMBAI 401 204 PAN ACPLT2813R . APPELLANT V/S CIT II ASHAT IT PARK, 6 TH FLOOR, WAGLE INDL. ESTATE THANE 400 604 . RESPONDENT ASSESSEE BY : SHRI. G.P. MEHTA REVENUE BY : SHIR. SANJAY SINGH DATE OF HEARING 23.02.2017 DATE OF ORDER 24.02.2017 O R D E R PER: SHAMIM YAHYA THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER OF LD. CIT DATED 24/3/2014, AND PERTAINS TO ASSESSMENT YEAR 2011 12. 2. THE GROUNDS OF APPEAL READ AS UNDER; 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT ERRED IN PASSING AN ORDER U/S. 263 OF THE I.T. ACT, 1961 SETTING ASIDE PRATIBHA JAGDISH THOTANGARE ITA NO. 3273 /MUM./2014 2 THE ORDER PASSED BY THE LEARNED I.T.O. WARD 1(3) KALYAN U/S. 143(3) SINCE THE SAID ORDER WAS NEITHER ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF REVENUE. WITHOUT PREJUDICE TO THE ABOVE 2. THE LD . CIT ERRED IN PRESUMING THAT THERE WERE VIOLATION OF SEC. 40A(3) OF THE I.T. ACT, 1961, WHEN THERE WAS NO SUCH PAYMENT IN EXCESS OF RS. 20,000/ - PER DAY PURCHASES PER PERSON. 3. THE LD. CIT ERRED IN NOT CONSIDERING THAT THE CASH TRANSACTIONS/ CASH WITHDRAWALS IF ANY FROM THE BANK ACCOUNTS WERE VERIFIED BY THE A.O. AT THE TIME OF ASSESSMENT. THE APPELLANT PRAYS THA T THE ORDER PASSED BY THE CIT BE CANCELLED QUASHED AND THE ORDER OF THE A.O. BE RESTORED. THE APPELLANT CRAVES LEAVE TO ADDUCE, ADD, AMEND, ALTER, OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL OR ADD NEW GROUNDS OF APPEAL WHICH MAY BE NECESSARY, BEFORE OR A T THE TIME OF HEARING OF THIS APPEAL. 3. IN THIS CASE LD. CIT HAS PASSED FOLLOWING ORDER U/S. 263 OF THE IT ACT. 1. IN THIS CASE, THE ASSESSEE FILED RETURN OF INCOME FOR THE A.Y. 2009 - 10 ON 07 - 08 - 2009 DECLARING TOTAL INCOME OF RS.2,25,036/ - AFTER CLAIMING DEDUCTION OF RS.1,00,000/ - U/S. 80C OF THE I.T. ACT. THE ASSESSEE IS DOING A BUSINESS OF SATES AND PURCHASE OF SA REES, DRESS PRATIBHA JAGDISH THOTANGARE ITA NO. 3273 /MUM./2014 3 MATERIALS AND CLOTHES. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS AND AFTER HEARING, THE AC) COMPLETED THE ASSESSMENT U/S. 143(3) OF THE ACT ON 28.12.2011, BY MAKING ADDITION OF RS. 80,000 / - ON ACCOUNT OF LOW PROFIT RATIO. 2. SUBSEQUENTLY O N VERIFICATION OF RECORDS IN RESPECT OF THE ABOVE ASSESSMENT YEAR, IT IS NOTICED FROM THE BANK STATEMENT OF THE ASSESSEE THAT THE ASSESSEE HAS MADE PAYMENT IN CASH TO VARIOUS' PERSONS IN EXCESS OF ITS. 20,000/ - TOTAL AGGREGATING TO RS. 15,55,000/ - . SECTION 40A (3) STATES THAT WHERE THE ASSESSEE INCURS ANY EXPENDITURE IN RESPECT OF WHICH PAYMENT OR AGGREGATE OF PAYMENTS MADE TO A PERSON IN A DAY, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE DRAWN ON A BANK OR ACCOUNT PAYEE BANK DRAFT, EXCEEDS TWENTY THOUSAND RU PEES, NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF SUCH EXPENDITURE. IN VIEW OF THE ABOVE THE A.O. SHOULD HAVE DISALLOWED THE CASH EXPENDITURE OF RS.15,55,000/ - . 3. THE ABOVE OMISSIONS, ON THE PART OF ASSESSING OFFICER RENDERED THE ASSESSMENT ORDER ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. ACCORDINGLY, A NOTICE TI/S. 263 DATED 06/11/2013 WAS ISSUED WHICH WAS DULY SERVED ON THE ASSESSEE. 4. IN RESPONSE TO THE ABOVE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED A LETTER OIL 10.01.2014, STATING THE REIN THAT SHE IS APPOINTING SHRI L.G. PATEL TO REPRESENT HER EASE. NO OTHER SUBMISSION PRATIBHA JAGDISH THOTANGARE ITA NO. 3273 /MUM./2014 4 WAS MADE BY THE ASSESSEE. THEREFORE, ANOTHER OPPORTUNITY WAS OFFERED TO THE ASSESSEE VIDE THIS OFFICE'S LETTERS DATED 22.01.2014 & 10.03.2014 REQUESTING HER TO ATTEND ON 05.02.2014 & 18.032014, RESPECTIVELY. HOWEVER, THE ASSESSEE HAS NEITHER ATTENDED NOR HAS MADE ANY WRITTEN SUBMISSIONS. 5. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCE OF THE CASE AND NON - COMPLIANCE FROM THE ASSESSEE, I AM CONVINCED THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND THEREFORE THIS IS A FIT CASE WHERE THE PROVISIONS OF SEC.263 OF THE IT ACT, 1961 ARE CLEARLY APPLICABLE. ACCORDINGLY, I SET ASIDE THE ORDER OF THE AO PASSED U/S 143(3) ON 28.12.2 011, WITH A DIRECTION TO REDO THE ASSESSMENT DE NOVO AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 4. AGAINST THE ABOVE ORDER ASSESSEE IS AN APPEAL BEFORE US . W E HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORD . W E FIND THAT IN THIS CASE LD. CIT HAS NOTED THAT A TOTAL OF RS.15,55,000/ - WERE PAID IN VIOLATION OF SECTION 40A (3), BEING PAYMENT IN CASH EXCEEDING RS.20,000/ - . DESPITE SEVERAL NOTICES ASSESSEE DIDNT RESPOND TO THE NOTICE OF LD. CIT. IN THESE CIRCUMSTANCES LD. CIT PASSED THE AFORESAID ORDER DIRECTION THE AO TO REDO THE ASSESSMENT DENVO. PRATIBHA JAGDISH THOTANGARE ITA NO. 3273 /MUM./2014 5 5. UPON CAREFUL CONSIDERATION IN OUR CONSIDER ED OPINION , DIRECTION BY THE LD. CIT - A TO THE ASSESSING OFFICER TO REDO THE ASSESSMENT DENVO IS NOT IN ACCORDANCE WITH H IS OBSERVATION EARLIER. IT IS NOTED THAT LD. CIT HAS FOUND THE ORDER BY THE ASSESSING OFFICER TO THE PRE - JUDICIAL IN AS MUCH AS A SUM OF RS.15,55,000/ - WERE PAID IN VIOLATION OF SECTION 40A (3). IN THIS REGARD IT IS THE SUBMISSION OF THE ASSESSEE THAT THERE WERE NO PAYMENTS IN VIOLA TION OF SECTION 40A (3). HOWEVER, THIS ASPECT HAS NOT BEEN SUBSTANTIATED AND NEEDS VERIFICATION AND THE LEVEL OF AO. THE ASSESSEE S APPROACH IN NOT RESPONDING TO THE SHOW CAUSE NOTICE OF LD. CIT IS ALSO NOT APPROPRIATE. 6. A CCORDINGLY, WE MODIFY THE ORDER OF LD.CIT AND DIRECT THE AO TO CONFINE HIS EXAMINATION TO THE VERIFICATION OF PAYMENTS IN VIOLATION SECTION 40 A(3) AS REFERRED IN PARA 2 OF THE ORDER OF LD. CIT U/S. 263. PRATIBHA JAGDISH THOTANGARE ITA NO. 3273 /MUM./2014 6 IN THE RESULT THIS APPEAL BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24 .02.2017 SD/ - SD/ - SANJAY GARG SHAMIM YAHIYA JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 24 .02.2017 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER NISHANT VERMA SR. PRIVATE SECRETARY (DY./ASSTT.REGISTRAR) ITAT, MUMBAI PRATIBHA JAGDISH THOTANGARE ITA NO. 3273 /MUM./2014 7 DATE INITIAL 1. DRAFT DICTATED ON 23 .02.2017 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 23 .02.2017 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 23 .02.2017 SR.PS 6. DATE OF PRONOUNCEMENT 24 .02.2017 SR.PS 7. FILE SENT TO THE BENCH CLERK 24 .02.2017 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER