ITO 18(3)(4), MUMBAI V. AMIT P KAREKAR, MUMBAI

ITA 3405/MUM/2013

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 8154 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2017
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 04-03-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MORYA PRATAP
• Assessee Lawyers: G S PIKALE
• Keywords: Unexplained expenditure; Additional evidence
• Section: 69C; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 3405/MUM/2013 ASSESSMENT YEAR: 2008-09 ITO 18(3)(4) VS. MR. AMIT P KAREKAR R. NO. 206 2 ND FLOOR, C-14, BAL GOVINDAS SOCIETY, PIRAMAL CHAMBERS, LALBUAG PAREL TAIKALWADI, MAHIM - W MUMBAI 400012 MUMBAI 400016 PAN NO. APDPK2268C (APPELLANT) (RESPONDENT) REVENUE BY : SHRI MORYA PRATAP, AR ASSESSEE BY: SHRI G.S. PIKALE, DR DATE OF HEARING : 21/1 2/2016 DATE OF PRONOUNCEMENT: 16/03/2017 ORDER PER N.K. PRADHAN, AM THIS IS AN APPEAL FILED BY THE REVENUE. THE RELEVAN T ASSESSMENT YEAR IS 2008-09. THE APPEAL IS DIRECTED AGAINST THE ORDER OF COMMISSIONER (APPEALS) 29, MUMBAI AND ARISES OUT OF ORDER U/S 143(3) OF THE INCOME TAX ACT 1961 (THE ACT). 2. THE EFFECTIVE GROUNDS OF APPEAL FILED BY THE REV ENUE READ AS UNDER:- I. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN ADMITTING ADDITIONAL EVIDENCES FILED BEFORE IT WITHOUT SPECIFYING THAT THE CONDITIONS MENTIONED IN RULE 46A ARE SATISFIED. II. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 28,81,450/- OUT OF TOTAL ADDITION OF RS. ITA NO. 3405/MUM/2013 2 35,84,200/- ON ACCOUNT OF SALE OF TICKETS ON THE BA SIS OF ADDITIONAL EVIDENCES FILED BEFORE IT. III. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 4,00,000/- OUT OF THE TO TAL ARTIST FEE OF RS. 9,29,500/- U/S 69C OF THE I.T. ACT ON THE BASIS OF ADDITIONAL EVIDENCES FILED BEFORE IT. IV. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 2,00,000/- AND RS. 6,50,00 0/- ON ACCOUNT OF DISCREPANCIES IN TDS CERTIFICATES ON THE BASIS OF ADDI TIONAL EVIDENCES FILED BEFORE IT. 3. WE BEGIN WITH THE 1 ST GROUND OF APPEAL. THE LEARNED CIT(A) HAS MENTIONED AT PARA 3 OF THE APPELLATE ORDER THAT THE ASSESSEE COULD NOT COLLECT THE EVIDENCES BEFORE THE COMPLETION OF ASSE SSMENT PROCEEDINGS BECAUSE OF COMPELLING CIRCUMSTANCES. TH E CIRCUMSTANCES BEING THAT THE ASSESSEE HAD TO INCURE HUGE LOSS IN ORGANISING THE EVENT AT NASIK AND THEREAFTER HE HAD TO CLOSE THE B USINESS OF EVENT MANAGEMENT AND TAKE UP A SALARIED JOB TO EARN INCOM E. AS THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FOR PROD UCING BEFORE THE AO THE EVIDENCE WHICH IS RELEVANT TO THE GROUNDS OF APPEAL, THE LEARNED CIT(A) HAS RIGHTLY ADMITTED THE ADDITIONAL EVIDENCE UNDER RULE 46A OF THE INCOME TAX RULES, 1962. THEREFORE, THE 1 ST GROUND OF APPEAL FILED BY THE REVENUE IS DISMISSED. 4. WE NOW COME TO THE 2 ND GROUND OF APPEAL. THE ASSESSEE, DURING THE COURSE OF APPELLATE PROCEEDING BEFORE THE LEARN ED CIT(A) HAD FILED ADDITIONAL EVIDENCES. HAVING ADMITTED THE SAME, THE LEARNED CIT(A) SENT A COPY OF IT TO THE AO FOR MAKING FURTHER ENQU IRY AND SUBMITTING A REMAND REPORT. THE AO SENT A REMAND REPORT TO THE LEARNED CIT(A) ON 16.11.2012. HAVING GONE THROUGH THE ASSESSMENT O RDER, THE REMAND REPORT OF THE AO AND THE EXPLANATION OF THE ASSESSEE, THE LEARNED CIT(A) FOUND THAT THE ASSESSEE HAD SUBMITTE D DETAILS OF ITA NO. 3405/MUM/2013 3 TICKETS SOLD, FREE TICKETS ISSUED AND TICKETS RETUR NED. THESE DETAILS WERE GIVEN PARTY-WISE AND ALSO QUANTITY OF TICKETS IN DIFFERENT DENOMINATIONS. THE TOTAL VALUE OF FREE TICKETS GIVE N TO 11 PARTIES COME TO RS. 21,96,800/-. THE CONFIRMATION LETTERS O F THE ABOVE PARTIES WERE ALSO FURNISHED. ONLY IN THE CASE OF LOKMAT, THE CONFIRMATION WAS NOT FILED. THE LEARNED CIT(A) FOUND THAT THERE WERE ACTUAL RECORDED SALE OF TICKETS TO LOKMAT NEWS PAPER AMO UNTING TO RS. 3,23,000/-. FROM THIS HE INFERRED THAT FREE TICKETS OF RS. 3,23,000/- WOULD HAVE BEEN GIVEN TO LOKMAT AS AN ADVERTISEMENT TO THIS EFFECT WAS GIVEN BY THE ASSESSEE IN LOKMAT NEWS PAPER ON LY. HOWEVER, IN RESPECT OF FREE TICKETS OF BALANCE RS. 3,15,000/- M ENTIONED AGAINST LOKMAT NEWS PAPER, THERE IS NO CONFIRMATION FROM THE PARTY. THE LEARNED CIT(A) THUS HELD THAT OUT OF TOTAL FREE TIC KETS CLAIMED BY THE ASSESSEE OF RS. 21,96,000/- THE ASSESSEE COULD NOT PROVIDE EVIDENCE OF FREE TICKETS AMOUNTING TO RS. 3,15,000/- RELATED TO LOKMAT NEWS PAPER. THE LEARNED CIT(A) HAS OBSERVED THAT THE TICKETS R ETURNED FROM VARIOUS COUNTERS TO THE ASSESSEE AMOUNT TO RS. 15,0 4,000/-. THE ASSESSEE HAS FILED CONFIRMATION FROM THESE COUNTERS . ONLY IN RESPECT OF ONE PARTY I.E. PLANET M, THERE IS NO CONFIRMATIO N AND THEREFORE, THE LEARNED CIT(A) HAS NOT ACCEPTED THE ASSESSEE S CON TENTION IN RESPECT OF THE SAID PARTY. BESIDES, IN RESPECT OF TWO CONFI RMATIONS I.E. ONE IN THE NAME OF KALIDAS NATYAGRAHA AND ANOTHER IN THE N AME OF PARASURAM SAIKHED, THE CONFIRMATIONS DO NOT BEAR ST AMP AND SEAL OF THE PARTY AND THEREFORE, ARE NOT RELIABLE. THE AMOU NTS MENTIONED AGAINST THESE PARTIES ARE RS. 1,28,000/- AND RS. 1, 23,000/- RESPECTIVELY. THEREFORE, THE LEARNED CIT(A) HAS NOT ACCEPTED THE ITA NO. 3405/MUM/2013 4 ASSESSEES EXPLANATION IN RESPECT OF RETURNED TICKE TS AMOUNTING TO RS. 3,87,750/- (RS. 2,51,000/- PLUS RS. 1,36,750/-). THUS THE LEARNED CIT(A) RESTRICTED THE ADDITION TO RS. 7,02,750/- (RS. 3,15,000/- PLUS RS. 3,87,750/-) OUT OF RS. 35,84,200/- MADE BY THE A.O. 4.1 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ADDITION OF RS . 7,02,750/- CONFIRMED BY THE LEARNED CIT(A) OUT OF TOTAL ADDITI ON OF RS. 35,84,200/- MADE BY THE AO IS BASED ON EVIDENCE AND PROPER EVALUATION. THE SAME HAS BEEN DELINEATED AT PARA 4 HERE-IN-ABOVE. IN VIEW OF THE ABOVE, WE UPHOLD THE ADDITION OF RS. 7, 02,750/- CONFIRMED BY THE LEARNED CIT(A) AND DISMISS THE 2 ND GROUND OF APPEAL FILED BY THE REVENUE. 5. NOW WE COME TO THE 3 RD GROUND OF APPEAL. THE AO FOUND THAT TOTAL ARTIST FEE OF RS. 9,29,500/- WAS DEBITED AND NO DOCUMENTS WERE SUBMITTED BY THE ASSESSEE. THEREFORE, THE AO HELD R S. 4,00,000/- AS UNEXPLAINED EXPENDITURE U/S 69C OF THE ACT. AS THE AO HAS NOT GIVEN ANY REASONS FOR DISALLOWING RS. 4,00,000/-, THE LEA RNED CIT(A) HAS RIGHTLY DELETED THE SAME. WE AGREE WITH THE FINDING OF THE LEARNED CIT(A) AND DISMISS THE 3 RD GROUND OF APPEAL. 6. THE 4 TH GROUND OF THE APPEAL RELATES TO THE ADDITION OF RS . 2,00,000/- AND RS. 6,50,000/- MADE BY THE AO ON ACC OUNT OF DISCREPANCIES IN TDS CERTIFICATE. AS PER THE TDS CE RTIFICATE OF SAPAT INTERNATIONAL PVT. LTD. AND KOTAK MAHINDRA MUTUAL F UND, THE PAYMENT MADE / CREDITED ARE SHOWN AT RS. 5,00,000/- AND RS. 9,21,157/-. HOWEVER, IN THE P&L ACCOUNT THE ASSESSEE HAS SHOWN RECEIPTS OF RS. ITA NO. 3405/MUM/2013 5 3,00,000/- AND RS. 2,71,157/- RESPECTIVELY. IT IS T HE CONTENTION OF THE REVENUE THAT THE LEARNED CIT(A) SHOULD NOT HAVE DEL ETED THE ABOVE ADDITION MADE BY THE A.O. ON THE BASIS OF ADDITIONA L EVIDENCE FILED BEFORE HIM. WE BELIEVE THAT THE TDS CERTIFICATE IS SUED BY SAPAT INTERNATIONAL PVT. LTD. AND KOTAK MAHINDRA MUTUAL F UND NEED VERIFICATION AT THE LEVEL OF A.O. THEREFORE, WE SET ASIDE THE ORDER OF THE LEARNED CIT(A) ONLY IN RESPECT OF GROUND NO 4 OF TH E PRESENT APPEAL AND RESTORE THE MATTER BACK TO THE FILE OF THE AO F OR VERIFICATION AND THEN PASSING AN ORDER AS PER THE PROVISIONS OF THE ACT. NEEDLESS TO SAY, THE AO IS DIRECTED TO GIVE REASONABLE OPPORTUN ITY OF BEING HEARD TO THE ASSESSEE BEFORE FINALISING THE ORDER. THE AS SESSEE IS ALSO DIRECTED TO FILE THE NECESSARY DETAILS BEFORE THE A O THUS GROUND NO 4 OF THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. 7. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/03/2017 SD/- SD/- (MAHAVIR SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBE R MUMBAI; DATED: 16/03/2017 BISWAJIT, SR. P.S. 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