ASK COR4PORATION, MUMBAI V. ITO 20(1)(4), MUMBAI

ITA 3347/MUM/2012

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9796 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 14-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANJU GARODIA
• Assessee Lawyers: RAHUL K HAKANI
• Keywords: Unexplained cash credit; Unexplained expenditure; Principle of natural justice; Peak credit; Additional evidence
• Section: 69C; 143(3); 133A; 147; 148; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH J, MUM BAI BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO. 3347/MUM/2012 (ASSESSMENT YEAR- 2005-06) M/S ASK CORPORATION E-5A, CRYSTAL PLAZA, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 PAN: AAMFA4763G VS. ITO WARD-(20)(1)(4) , MUMBAI. (APPELLANT) (RESPONDENT) ITA NO. 3348/MUM/2012 (ASSESSMENT YEAR- 2006-07) M/S ASK CORPORATION E-5A, CRYSTAL PLAZA, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 PAN: AAMFA4763G VS. ITO WARD-(20)(1)(4) , MUMBAI. (APPELLANT) (RESPONDENT) ITA NO. 3349/MUM/2012 (ASSESSMENT YEAR- 2007-08) M/S ASK CORPORATION E-5A, CRYSTAL PLAZA, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 PAN: AAMFA4763G VS. ITO WARD-(20)(1)(4) , MUMBAI. (APPELLANT) (RESPONDENT) ITA NO. 3350/MUM/2012 (ASSESSMENT YEAR- 2008-09) M/S ASK CORPORATION E-5A, CRYSTAL PLAZA, NEW LINK VS. ITO WARD-(20)(1)(4) , ITA NO.3347 TO 3 350/M/2012 & 2175 TO 2178 /M/2015 M/S ASK CORPORAT ION 2 ROAD, ANDHERI (W), MUMBAI-400053 PAN: AAMFA4763G MUMBAI. (APPELLANT) (RESPONDENT) ITA NO. 2175/MUM/2015 (ASSESSMENT YEAR- 2005-06) M/S ASK CORPORATION E-5A, CRYSTAL PLAZA, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 PAN: AAMFA4763G VS. ITO WARD-(20)(1)(4) , MUMBAI. (APPELLANT) (RESPONDENT) ITA NO. 2176/MUM/2015 (ASSESSMENT YEAR- 2006-07) M/S ASK CORPORATION E-5A, CRYSTAL PLAZA, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 PAN: AAMFA4763G VS. ITO WARD-(20)(1)(4) , MUMBAI. (APPELLANT) (RESPONDENT) ITA NO. 2177/MUM/2015 (ASSESSMENT YEAR- 2007-08) M/S ASK CORPORATION E-5A, CRYSTAL PLAZA, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 PAN: AAMFA4763G VS. ITO WARD-(20)(1)(4) , MUMBAI. (APPELLANT) (RESPONDENT) ITA NO.3347 TO 3 350/M/2012 & 2175 TO 2178 /M/2015 M/S ASK CORPORAT ION 3 ITA NO. 2178/MUM/2015 (ASSESSMENT YEAR- 2008-09) M/S ASK CORPORATION E-5A, CRYSTAL PLAZA, NEW LINK ROAD, ANDHERI (W), MUMBAI-400053 PAN: AAMFA4763G VS. ITO WARD-(20)(1)(4) , MUMBAI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAHUL K. HAKAN I (AR) REVENUE BY : MS ANJU GARODIA (DR) DATE OF HEARING : 26.07.2017 DATE OF PRONOUNCEMENT : 26.07.2017 ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER BENCH: 1. THIS SET OF EIGHT APPEALS UNDER SECTION 253 OF I NCOME TAX ACT (ACT) ARE DIRECTED BY ASSESSEE AGAINST THE VARIOUS ORDER OF C OMMISSIONER OF INCOME- TAX (APPEALS) (THE CIT(A) . OUT OF WHICH FOUR APPEA LS BEING ITA NO. 3347 TO 3350/MUM/2012 ARE DIRECTED AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) -31, MUMBAI, IN QUANTUM ASSESS MENT FOR ASSESSMENT YEAR (AY) 2005-06 TO 2008-09. THE APPEALS ITA NO. 2 175 TO 2178/MUM/2015 ARE DIRECTED AGAINST THE CONFIRMATION OF PENALTY LEVIED UNDER SECTION 271(1) (C ) FOR SAME ASSESSMENT YEAR S I.E. AY 2005-06 TO 2008-09. AS COMMON GROUNDS OF APPEAL ARE RAISED IN ALL THE APPEALS, FACTS OF ALL THE APPEALS ARE ALSO COMMON. THUS, ALL THE APPE ALS WERE CLUBBED TOGETHER AND ARE DECIDED BY A CONSOLIDATED ORDER TO AVOID TH E CONFLICTING DECISION. ITA NO.3347 TO 3 350/M/2012 & 2175 TO 2178 /M/2015 M/S ASK CORPORAT ION 4 2. BRIEF FACTS OF THE CASES ARE THAT THE ASSESSEE-FIRM IS ENGAGED IN THE BUSINESS OF DEVELOPER AND CLEARANCE AND REHABILITATION OF SR A SCHEMES. A SURVEY U/S 133A WAS CARRIED OUT IN THE PREMISES OF ASSESSEE ON 16.02.2009. IN THE SURVEY CERTAIN INCRIMINATING DOCUMENTS WERE FOUND A ND WERE SEIZED. IT WAS FURTHER NOTICED THAT ASSESSEE HAS NOT FILED RETURN OF INCOME FOR AY 2005-06. THEREFORE, NOTICE U/S 148 R.W.S. 147 OF THE ACT WAS SERVED ON 31.01.2010, IN RESPONSE TO THE NOTICE UNDER SECTION 148 , THE ASSE SSEE FILED RETURN OF INCOME FOR AY 2005-06 ON 13.04.2010. THE ASSESSEE NOT DISP UTED THE RE-OPENING OF THE ASSESSMENT. THE ASSESSMENT FOR AY 2005-06 WAS C OMPLETED U/S 143(3) R.W.S. 147 OF THE ACT ON 27.12.2010. THE ASSESSING OFFICER (AO) WHILE FRAMING THE ASSESSMENT MADE THE ADDITION OF RS. 56, 83,894/- U/S 68 OF THE ACT. ON APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS CONFIRMED. FOR AY 2006-07, THE ASSESSMENT WAS RE-OPENED VIDE NOTICE D ATED 29.07.2009 U/S 148 OF THE ACT. THE ASSESSMENT WAS COMPLETED U/S 1 43(3) R.W.S. 147 OF THE ACT ON 27.12.2010. WHILE FRAMING THE ASSESSMENT, TH E AO MADE THE ADDITION U/S 68 OF THE ACT FOR RS. 5,057,5,000/- U/ S 68 OF THE ACT. ON APPEAL BEFORE THE LD. CIT(A), THE ADDITION WAS SUSTAINED. FOR AY 2007-08, THE ASSESSMENT WAS RE-OPENED ON 28.03.2010 U/S 148 OF THE ACT. THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) RWS 1 47 ON 27.12.2010 . THE ASSESSING OFFICER MADE THE ADDITION OF RS. 3, 1 6,50,000/- U/S 68 OF THE ACT. HOWEVER, ON APPEAL BEFORE THE LD. CIT(A), THE ADDITION ON ACCOUNT OF ITA NO.3347 TO 3 350/M/2012 & 2175 TO 2178 /M/2015 M/S ASK CORPORAT ION 5 UNEXPLAINED CASH CREDIT TO THE EXTENT OF RS. 1,44,8 5,000/- WAS SUSTAINED AND THE REMAINING AMOUNT TO THE EXTENT OF RS. 2,83,31,0 89/- WAS TREATED AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT BY GIVIN G PARTIAL RELIEF OF DELETING OF RS. 33,18,911/-. FOR AY 2008-09, THE AS SESSEE FILED RETURN OF INCOME ON 16.07.2009 DECLARING NIL INCOME. THE ASSE SSMENT WAS COMPLETED U/S 143(3) OF THE ACT ON 27.12.2010. THE AO WHILE F RAMING THE ASSESSMENT ORDER MADE THE ADDITION U/S 68 OF THE ACT OF RS. 9 1,05,000/-. ON APPEAL BEFORE THE LD. CIT(A), THE LD. CIT(A) ENHANCED THE ADDITION BY A SUM OF RS. 53,04,000/- , THEREBY MAKING U/S 68 TO RS. 1,44,0 9,000/-.BEING AGGRIEVED BY THE DIFFERENT ORDERS OF LD. CIT(A) FOR DIFFERENT AY, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE US. 3. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVE (AR ) OF THE ASSESSEE AND LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENU E AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. AR OF THE ASS ESSEE ARGUED THAT THE ASSESSEE HAS FILED AN APPLICATION UNDER RULE 29 OF INCOME TAX RULES FOR ADMISSION OF ADDITIONAL EVIDENCE. THE ADDITIONAL E VIDENCE IS FILED IN THE FORM OF PAPER BOOK (PB) NO.III. IT WAS FURTHER SUBM ITTED THAT THE ASSESSEE HAS FILED CONSOLIDATED PB FOR ALL AYS. IN THE APPLI CATION FOR ADMITTING THE ADDITIONAL EVIDENCES, IT IS PLEADED THAT THE ADDITI ONS WERE MADE ON THE BASIS OF ENTRIES IN THE CASH BOOK FOUND DURING THE SURVEY . ON THE BASIS OF ENTRIES IN THE CASH BOOK THE ASSESSEE FILED DETAILS AND WOR KING OF THE CERTAIN ENTRIES ITA NO.3347 TO 3 350/M/2012 & 2175 TO 2178 /M/2015 M/S ASK CORPORAT ION 6 BEFORE THE LD CIT(A). THE LD CIT(A) NOT DISCLOSED TO THE ASSESSEE THAT THE EVIDENCES FILED BEFORE HIM IS NOT SUFFICIENT, THOUG H THE LD CIT(A) IN ITS ORDER OBSERVED THAT THE ASSESSEE FAILED TO FILE CONFIRMAT IONS TO SUBSTANTIATE ITS CONTENTIONS. THE LD AR FOR THE ASSESSEE ARGUED THAT THE ADDITIONAL DOCUMENTS CONSIST OF THE AFFIDAVIT AND CONFIRMATION OF ACCOUNTANTS (PAGE NO. 72 TO 110) AND WORKING OF PEAK CREDIT FOR AY 20 05-06 TO 2008-09 (PAGE NO. 111 TO 128). IT WAS FURTHER ARGUED THAT T HE ASSESSEE PREPARED THE WORKING OF PEAK CREDIT DURING THE FIRST; HOWEVER, T HE SAME WAS NOT MADE A PART OF RECORD AS THE SAME WAS NOT CALLED FROM THE ASSESSEE. IT WAS FURTHER ARGUED THAT THE DOCUMENTS REQUIRED TO BE FILED ON R ECORD GOES TO THE ROOT OF THE ISSUE. IT WAS PRAYED THAT THE ADDITIONAL EVIDEN CE FILED BEFORE THE TRIBUNAL HAS A DIRECT BEARING ON THE GROUNDS OF APPEAL INVOL VED IN THE PRESENT APPEAL AND MAY BE ADMITTED UNDER RULE 29 OF THE INCOME-TAX RULES. IN SUPPORT OF THE SUBMISSION, THE LD. AR OF THE ASSESSEE RELIED U PON THE DECISION OF HONBLE BOMBAY HIGH COURT IN PRABHAWATI VS. CIT 231 ITR 1 (BOM.). ON THE OTHER HAND, LD. DR FOR THE REVENUE STRONGLY OPP OSED THE ADMISSION OF ADDITIONAL EVIDENCE. IT WAS ARGUED THAT THE ASSESSE E HAS NOT PLACED ALL THESE DOCUMENTS BEFORE THE LOWER AUTHORITIES. IT WAS ARGU ED THAT THE ASSESSEE HAS NOT SHOWN THE SUFFICIENT CAUSE THAT IF WORKING OF P EAK CREDIT, IF PREPARED DURING THE FIRST APPELLATE STAGE, AS TO WHY THE SAM E WAS NOT FILED BEFORE THE AUTHORITIES CONCERN. THE LD. DR FOR THE REVENUE FUR THER ARGUED THAT THE ITA NO.3347 TO 3 350/M/2012 & 2175 TO 2178 /M/2015 M/S ASK CORPORAT ION 7 ADDITIONAL EVIDENCE FILED BY ASSESSEE IS PROPOUNDED ONE AND MAY NOT BE ADMITTED AT THIS STAGE. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSION OF THE PART IES AND HAVE GONE THROUGH THE ADDITIONAL EVIDENCE FILED IN THE FORM O F PAPER BOOK-III. THE DOCUMENTS CONSISTING OF AFFIDAVIT OF MR. AFZAL BAL TIWALA, WHO WAS LOOKING AFTER THE ACCOUNTS OF THE ASSESSEE DURING THE RELEV ANT PERIOD. THE AFFIDAVIT AND CONFIRMATION OF VIJAY PAWAR AND FRIENDS (PAGE 7 4 TO 81) WHO IS PARTNER OF FRIENDS BUILDER AND WAS HAVING JOINT-VENTURE W ITH THE ASSESSEE-FIRM. WE HAVE ALSO SEEN THE CONTENTS OF AFFIDAVIT OF MR. KAMAL JADHWANI, MR. AYUB S. PANJWANI, MR. YUSUF MAQSOOD KHAN, MR. RAJES H THAKKAR, MR. ABDUL RASHID, MR. RAM SWAROOP, MR. YUNUS SORATIYA A ND MR. SHANTARAM MANE. IN ALL THE AFFIDAVITS, THE DEPONENT HAS STATE D THAT THE TRANSACTION RECORDED IN THE CASH-BOOK PERTAINS TO THEM. THE DEP ONENTS HAVE FIELD CONFIRMATION ALONG WITH THE ACCOUNT. AS PER OUR CON SIDERED VIEW, THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE HAS A DIR ECT BEARING ON THE ISSUE INVOLVED IN THE PRESENT APPEAL AND GOES TO THE ROOT OF THE SAME. CONSIDERING THE RELEVANCY AND ADMISSIBILITY OF THE DOCUMENTS AN D THE PRINCIPAL OF NATURAL JUSTICE, WE ADMIT THE ADDITIONAL EVIDENCE F URNISHED BY ASSESSEE BEFORE US. SINCE, THE ASSESSEE HAS FILED THE ADDITI ONAL EVIDENCE FOR THE FIRST TIME BEFORE US, IN ALL FAIRNESS WE DEEM IT APPROPRI ATE TO REMAND THE CASE TO THE FILE OF AO TO EXAMINE ALL THE EVIDENCES AND PAS SED THE ORDER AFRESH IN ITA NO.3347 TO 3 350/M/2012 & 2175 TO 2178 /M/2015 M/S ASK CORPORAT ION 8 ACCORDANCE WITH LAW. WE MAY MAKE IT CLEAR THAT ALL OTHER ISSUES ARE KEPT OPEN FOR CONSIDERATION OF THE AO IN ACCORDANCE WITH LAW. NEEDLES TO SAY THAT AO SHALL GRANT SUFFICIENT AND ADEQUATE OPPORTU NITY TO THE ASSESSEE BEFORE PASSING THE ORDER IN ACCORDANCE WITH LAW AFT ER CONSIDERING THE DOCUMENTARY EVIDENCES FURNISHED BY THE ASSESSEE. TH E ASSESSEE IS ALSO DIRECTED TO FULLY CO-OPERATE AND PROVIDE NECESSARY INFORMATION AND DOCUMENT TO THE AO AND NOT TO SEEK ADJOURNMENT WITH OUT ANY VALID REASON. WITH THESE DIRECTIONS, THE APPEAL FOR AY 2005-06 TO 2008-09 IN QUANTUM ASSESSMENT ARE ALLOWED FOR STATISTICAL PURPOSE. 5. ITA NO. 2175 TO 2178/MUM/2015. IN ALL THESE APPEALS ARE DIRECTED AGAINST THE CONFIRMATION OF PENALTY ORDER LEVIED U/S 171(1) (C) OF THE ACT. AS WE HAVE ALREADY SET-ASIDE THE ORDER OF ASSESSING OFFIC ER IN QUANTUM ASSESSMENT IN ALL THE CASES AND RESTORE THE MATTER TO THE FILE OF ASSESSING OFFICER TO DECIDE THE ISSUE AFRESH . THUS, IN OUR CONSIDERED VIEW, NO PENALTY ORDERS SURVIVE THEREAFTER. HOWEVER, THE AO IS AT LIBERTY TO INITIA TE THE PENALTY U/S 271(1)(C) OF THE ACT AFRESH IN CASE THE ADDITIONS ARE SUSTAIN ED, IN ACCORDANCE WITH LAW. 6. IN THE RESULT, ITA NO. 3347 TO 3350/MUM/2012 ARE AL LOWED FOR STATISTICAL PURPOSE AND ITA NO. 2175 TO 2178/MUM/2015 ARE ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH DAY OF JULY 2017. SD/- SD/- ( RAJENDRA ) (PAWAN SING H) ACCOUNTANT MEMBER JU DICIAL MEMBER MUMBAI; DATED 26/07/2017 ITA NO.3347 TO 3 350/M/2012 & 2175 TO 2178 /M/2015 M/S ASK CORPORAT ION 9 S.K.PS COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT.REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY/