DAGINA COLLECTION P. LTD, MUMBAI V. ACIT CEN CIR 17 & 28, MUMBAI

ITA 3306/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8012 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 28-10-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 19-05-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUM EET KUMAR
• Keywords: Unexplained cash credit; Business income; Corroborative evidences
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.3306/MUM/2009 (ASSESSMENT YEAR: 2004-05) M/S. DAGINA COLLECTION P. LTD., 611/612, PAREKH MARKET, MUMBAI -400 004 ASSESSEE VS THE ASSTT. COMMISSIONER OF INCOME-TAX -17 & 28, MUMBAI .. REVENUE PAN: AAACL 0915 L ASSESSEE BY: SHRI JITENDRA JAIN REVENUE BY: SHRI SUMEET KUMAR O R D E R PER R.S. PADVEKAR, JM IN THIS APPEAL THE ASSESSEE CHALLENGED THE IMPUGNED ORDER OF THE LD. CIT (A)-V MUMBAI DATED 30.3.2009 FOR THE A.Y. 2 004-05. GROUND NO.1 READS AS UNDER:- 1. THE COMMISSIONER OF INCOME TAX (APPEALS) V [HE REINAFTER REFERRED TO AS CIT (A)] ERRED IN CONFIRMING THE DIS ALLOWANCE OF LOSS OF ` 1,64,52,701/- CLAIMED IN THE RETURN BY THE APPELLANT. ITA 3306/M/2009 M/S. DAGINA COLLECTION P. LTD. 2 2. THE ASSESSEE-COMPANY IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADING IN JEWELLERY AND DIAMONDS . THE ASSESSEE FILED THE RETURN OF INCOME DECLARING THE LOSS OF ` 1,64,52,701/-. THE RETURN WAS ACCOMPANIED WITH TWO SETS OF PROVISIONAL PROFIT AND LOSS ACCOUNTS & PROVISIONAL BALANCE-SHEETS. THE ASSESSE E DID NOT FILE AUDIT REPORT AS PER THE PROVISIONS OF SECTION 44AB, THOUG H THE TURNOVER OF THE ASSESSEE WAS MORE THAN 40 LAKHS. THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S.143(3). THE A.O. GATHERED VARIOUS INFORMATION U/S.133(6) FROM D IFFERENT BANKS. IT APPEARS THAT DURING THE COURSE OF THE ASSESSMENT PR OCEEDINGS ANOTHER PROVISIONAL PROFIT AND LOSS ACCOUNT AND BALANCE-SHE ET WERE SUBMITTED TO THE A.O. THE A.O. NOTICED THE DISCREPANCIES IN THE PROFIT AND LOSS ACCOUNT AS WELL AS BALANCE-SHEET SUBMITTED ALONG WI TH THE RETURN OF INCOME OF THE ASSESSEE AS WELL AS ANOTHER SET FILED BY THE ASSESSEE DURING ASSESSMENT PROCEEDING. THE A.O. HAS NOTED THAT THE ASSESSEE DID NOT PRODUCE ANY SUPPORTING EVIDENCES IN THE RETURN NOR THE BOOKS OF ACCOUNTS WERE PRODUCED. NO EXPLANATION WHATSOEVER WAS GIVEN IN RESPECT OF THE DISCREPANCIES FOUND IN THE TWO DIFFE RENT PROVISIONAL PROFITS AND LOSS ACCOUNTS & BALANCE-SHEETS. THE A.O., THER EFORE, DISALLOWED IT AT ENTIRETY THE LOSS CLAIMED BY THE ASSESSEE AT ` 1,64,52,701/- AND BUSINESS INCOME OF THE ASSESSEE WAS ESTIMATED AT N IL. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED TO GET THE RELIEF. 3. THE LD. CIT (A) CONFIRMED THE ORDER OF THE A.O. AND OPERATIVE PART IS AS UNDER:- 3.3 I HAVE CONSIDERED THE SUBMISSION OF THE APPELL ANT. THE APPELLANT FILED TWO SETS OF PROVISIONAL ACCOUNTS BE FORE THE ASSESSING OFFICER. ONE SET OF PROVISIONAL ACCOUNTS WERE WITH ITA 3306/M/2009 M/S. DAGINA COLLECTION P. LTD. 3 THE RETURN OF INCOME AND ANOTHER SET OF PROVISIONAL ACCOUNTS WERE FILED ON 19.12.2006. THE APPELLANT COULD NOT RECONCILE THE DISCREPANCIES POINTED OUT BY THE ASSESSING OFFI CER VIDE ORDER SHEET ENTRY DT. 20.12.2006. THE APPELLANT AL SO DID NOT PRODUCE BOOKS OF ACCOUNTS BEFORE THE ASSESSING OFFI CER. EVEN THOUGH THE TURNOVER OF THE APPELLANT IS MORE THAN ` 40 LAKHS, THE APPELLANT HAS NOT AUDITED ITS BOOKS OF ACCOUNTS . THE APPELLANT DID NOT FURNISH ANY TAX AUDIT REPORT. FU RTHER THE ACCOUNTS FURNISHED BY THE APPELLANT BEFORE THE ASSE SSING OFFICER. THEREFORE ON THE FACTS STATED ABOVE, IT C ANNOT BE SAID THAT THE ACCOUNTS FURNISHED BY THE APPELLANT ARE RE LIABLE AND THEREFORE ASSESSING OFFICER HAS RIGHTLY REJECTED TH E SAME. THE ASSESSING OFFICER HAS REJECTED THESE ACCOUNTS U/S.1 45(3) OF THE INCOME TAX ACT. U/S.145(3) OF THE INCOME TAX ACT, ASSESSING OFFICER CAN MAKE AN ASSESSMENT IN THE MAN NER PROVIDED UNDER SECTION 144 OF THE INCOME TAX ACT, I F HE IS NOT SATISFIED ABOUT THE CORRECTNESS AND COMPLETENESS OF THE ACCOUNTS OF THE APPELLANT. IN THE PRESENT CASE ACC OUNTS OF THE APPELLANT ARE NEITHER CORRECT OR COMPLETE. ACCORDI NGLY THE ACTION OF THE ASSESSING OFFICER IS UPHELD IN REJECT ING ACCOUNTS OF THE APPELLANT. SINCE THE APPELLANT HAS NOT FURN ISHED EVIDENCE OF VARIOUS EXPENSES BEFORE ASSESSING OFFIC ER, FOR ITS BUSINESS LOSS OF ` 1,64,52,701/- THE ASSESSING OFFICER HAS CORRECTLY NOT ACCEPTED THE SAME AND ESTIMATED THE B USINESS INCOME OF THE APPELLANT AT ` NIL. THE ACTION OF THE ASSESSING OFFICER IS UPHELD. THIS GROUND OF APPEAL OF THE AP PELLANT IS NOT ALLOWED. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. ITA 3306/M/2009 M/S. DAGINA COLLECTION P. LTD. 4 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . THE LD. COUNSEL COULD NOT CONVINCE US, WHY TWO DIFFERENT PR OVISIONAL BALANCE- SHEETS AND PROFIT & LOSS ACCOUNTS WERE FILED. IT W AS NOT CONTROVERTED HERE THAT THE ASSESSEE HAS NOT PRODUCED BOOKS OF ACCOUNT TO SUPPORT THE CLAIM OF LOSS. IT IS A WELL SETTLED JUDICIAL PRINC IPLE THAT IF ANY CLAIM IS MADE BY THE ASSESSEE THEN THE BURDEN IS ON THE ASSE SSEE TO PROVE THE SAID CLAIM IS CORRECTLY MADE. EVEN BEFORE US ALSO THE XEROX COPIES OF THE ACKNOWLEDGEMENT AND PROVISIONAL BALANCE-SHEETS ARE FILED. THERE IS NO AUDIT REPORT IN THIS CASE, AS REQUIRED U/S.44AB OF THE ACT, THOUGH THE ASSESSEE HAS TURNOVER OF MORE THAN 40 LAKHS. IT ME ANS THAT THE ASSESSEE IS NOT MAINTAINING THE BOOKS OF ACCOUNTS. AFTER GI VING OUR ANXIOUS CONSIDERATION TO THE FACTS ON RECORD, WE ARE OF THE OPINION THAT THE LD. CIT (A) HAS RIGHTLY CONFIRMED THE ORDER OF THE A.O. AND NO INTERFERENCE IS CALLED FOR. ACCORDINGLY, GROUND NO.1 IS DISMISSED. 5. GROUND NO.2 IS IN RESPECT OF THE ADDITION MADE U /S.68 OF THE ACT, WHICH READS AS UNDER:- 2. THE CIT (A) ERRED IN CONFIRMING THE ADDITION OF ` 5,04,480/- BEING CASH DEPOSITED IN ABN AMRO BANK AS UNEXPLAINE D CASH CREDIT U/S.68 OF THE I.T. ACT. 6. THE A.O. HAS NOTED THAT AS PER THE INFORMATION G ATHERED BY THE A.O. U/S.133(6) OF THE ACT FROM VARIOUS BRANCHES OF THE BANKS, IT IS SEEN THAT ASSESSEES BANK ACCOUNT NO.745670 WITH ABN AMR O BANK SHOWED THE FOLLOWING CASH CREDITS:- DATE AMOUNTS DEPOSITED IN CASH 31.10.2004 ` 4,480/- 29.01.2004 ` 3,00,000/- 13.02.2004 ` 2,00,000/- 25.02.2004 ` 1,00,000/- ----------------- TOTAL ` `` ` 5,04,280/- =========== ITA 3306/M/2009 M/S. DAGINA COLLECTION P. LTD. 5 7. THE A.O. TREATED THE SAID AMOUNT AS UNEXPLAINED CASH CREDIT AND MADE THE ADDITION U/S.68 OF THE ACT. THE SAID ADDI TION WAS CONFIRMED BY THE LD. CIT (A). THE LD. COUNSEL ARGUED THAT THE A MOUNTS DEPOSITED ARE DULY RECORDED BY THE ASSESSEE IN THE CASH BOOK. TH E LD. COUNSEL REFERRED TO THE PAGE NO.42 TO 43 AND SUBMITS THAT A S PER THE COPIES OF THE CASH BOOK, THE ASSESSEE HAS RECORDED THE SAID TRANS ACTIONS AND HENCE THE ASSESSEE HAS EXPLAINED THE SOURCE. HE FURTHER SUBMITS THAT THE ASSESSEE MAY BE GIVEN ONE MORE OPPORTUNITY TO EXPLA IN HOW THE AMOUNTS ARE DEPOSITED. IT APPEARS THAT THE ASSESSEE DID NO T PRODUCE BOOKS OF ACCOUNT BEFORE BOTH THE AUTHORITIES AND NOW THE ASS ESSEE IS CLAIMING THAT THE ASSESSEE MAY BE GIVEN ONE OPPORTUNITY TO P RODUCE THE BOOKS OF ACCOUNT. IN OUR OPINION, THIS ISSUE NEEDS TO BE SE NT BACK TO THE FILE OF THE A.O. WITH THE DIRECTION TO DECIDE THE SAME DE NOVO AFTER CONSIDERING THE EXPLANATION AND EVIDENCES PRODUCED BY THE ASSES SEE BEFORE US. ACCORDINGLY, GROUND NO.2 IS ALLOWED FOR THE STATIST ICAL PURPOSES. 8. IN THE RESULT PARTLY, APPEAL IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 3RD MARCH 2011. SD/- SD/- ( P.M. JAGTAP ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 23RD MARCH 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) V, MUMBAI. 4) THE CIT MC V, MUMBAI. ITA 3306/M/2009 M/S. DAGINA COLLECTION P. LTD. 6 5) THE D.R. D BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN