DCIT 17(1), MUMBAI V. KAMAR INFRASTRUCTURE, MUMBAI

ITA 3468/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7947 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: MITESH THAKKAR
• Keywords: Principle of natural justice; Additional evidence
• Section: 68

Judgement Text

A , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A, MUMBAI , ! ! ! ! , ' ' ' ' BEFORE SHRI B R BASKARAN, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER . : . : . : . : 3468 3468 3468 3468/ // / / // / 2013, * ! +! 2009-10 ITA NO. : 3468/MUM/2013 , AY 2009-10 DCIT -17(1), 1 ST FLOOR, ROOM NO. 113, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI VS M/S KAMAR INFRASTRUCTURE, 20, HUSSAIN PATEL ROAD, WADI B, MAZGAON, MUMBAI -400 010, 1 .: PAN: AAHFK 5238 P 12 (APPELLANT) 3412 (RESPONDENT) APPELLANT BY : SHRI PITAMBAR DAS RESPONDENT BY : SHRI MITESH THAKKAR *567 /DATE OF HEARING : 11-08-2014 89+ 567/ DATE OF PRONOUNCEMENT : 13-08-2014 : : : : O R D E R ! ! ! ! , . . . . . .. . PER VIVEK VARMA, J.M. : THE APPEAL IS FILED BY THE DEPARTMENT AGAINST THE O RDER OF CIT(A) 29, MUMBAI, DATED 25.02.2013, WHEREIN THE ISSUE REL ATES TO DELETION OF RS. 45,00,000/- ADDED BY THE ASSESSEE U/S 68 OF INC OME TAX ACT, 1961. THE ASSESSEE HAS SHOWN THE FOLLOWING UNSECURE D LOANS: 1) MR. SALIM MERCHANT RS. 25,00,000/- 2) M/S POKHARNA METAL SYNDICATE RS. 20,00,000/- 2. THE AO CALLED FOR DETAILS ABOUT THE GENUINENESS OF THE ABOVE UNSECURED LOANS I.E. IDENTITY, GENUINENESS AND CRED IT WORTHINESS OF THE PARTIES. 3. THE ASSESSEE WAS UNABLE TO PROVIDE THE SAME. THE AO THEREFORE, ADDED THE SAME TO THE INCOME OF THE ASSESSEE. 4. THE ASSESSEE APPROACHED THE CIT(A), BEFORE WHOM, THE ASSESSEE SUBMITTED DETAILS LIKE ROI, BANK STATEMENTS, CONFIR MATION AND BALANCE M/S KAMAR INFRASTRUCTURE ITA NO. 3468/MUM/2013 2 SHEET OF BOTH THE PARTIES. THE ASSESSEE ALSO SUBMIT TED DETAILS OF SOURCES OF FUNDS OF BOTH THE PARTIES. 5. THE CIT(A), CONSIDERING THE DETAILS AND THE CASE LAWS CITED, WHICH HAVE BEEN REPRODUCED IN THE IMPUGNED ORDER AC CEPTED THE CREDITS TO BE GENUINE IN ALL RESPECTS AND DELETED T HE ADDITION AS MADE. 6. AGAINST THIS ORDER OF THE CASE CIT(A), THE DEPAR TMENT IS AGGRIEVED AND HAS RAISED THE FOLLOWING GROUNDS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 45, 00,000/- MADE BY THE AO U/S 68 OF THE I T ACT WITHOUT APPRECIATING THE FACT THAT CREDIT WORTHINESS OF THE LOANEES COULD NOT BE ESTABLISHED AS THEY WERE SHOWING ONLY MEAGER INCOME IN THEIR RETURN AND ALSO THE FUNDS OF THIRD PARTIES, THE CREDIT WORTHINESS OF WHOM WAS NOT ESTA BLISHED, WERE ROUTED THROUGH THE BANK ACCOUNT OF ABOVE PARTIES. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 45, 00,000/- MADE BY THE AO U/S 68 OF THE I T ACT BY ACCEPTING THE ADDITIO NAL EVIDENCES IN CONTRAVENTION OF RULE 46A OF THE IT RULES AND WITHOUT AFFORDING AN OPPORTUNITY TO THE AO TO CARRY OUT APPROPRIATE INVES TIGATION WITH REFERENCE TO SUCH ADDITIONAL EVIDENCES. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RES TORED. 7. BEFORE US, THE DR SUBMITTED THAT THE CIT(A) VIOL ATED THE ACCEPTED PRINCIPLE OF NATURAL JUSTICE BY NOT ALLOWI NG THE AO TO CONSIDER THE EVIDENCE THAT WAS PLACED BEFORE THE CIT(A). THE DR SUBMITTED THAT THE CIT(A) SHOULD HAVE AFFORDED AN OPPORTUNITY TO T HE AO TO LOOK INTO THE EVIDENCE AND GIVE COMMENTS ON HIS SATISFACTION ON THE EVIDENCE. THIS ACCORDING TO THE DR WAS GROSS VIOLATION OF NAT URAL JUSTICE. 8. THE DR, THEREFORE, SUBMITTED THAT THE ISSUE MUST BE RESTORED TO THE FILE OF THE AO. 9. THE AR ON THE OTHER HAND STRONGLY OBJECTED TO TH E ARGUMENTS OF THE DR AND SUBMITTED THAT THE ORDER OF CIT(A) WAS L EGALLY CORRECT. M/S KAMAR INFRASTRUCTURE ITA NO. 3468/MUM/2013 3 10. WE HAVE HEARD THE ARGUMENTS AND HAVE PERUSED TH E ORDERS OF THE REVENUE AUTHORITIES. IT IS A FACT THAT THE CIT( A) CONSIDERED THE ENTIRE EVIDENCE ON HIS OWN AND DID NOT AFFORD ANY O PPORTUNITY TO THE AO TO EXAMINE THE ISSUE IN THE LIGHT OF THE EVIDENC E. THIS MAY BE ACCEPTABLE AS COTERMINOUS POWERS OF THE CIT(A), BUT IN DELIVERANCE OF JUSTICE, IT IS NOT DESIRABLE. WE, THEREFORE, SET AS IDE THE ORDER OF THE CIT(A) ON THE ISSUE OF ADDITION OF RS. 45,00,000/- AND RESTORE THE SAME TO THE FILE OF THE AO FOR FRESH ADJUDICATION. 11. SINCE WE HAVE RESTORED THE ISSUE TO THE AO, GRO UND NO. 1 BECOMES ACADEMIC. 12. IN THE RESULT, THE APPEAL FILED BY THE DEPARTME NT IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH AUGUST, 2014. SD/- SD/- ( ) ( ! ! ! !) (B R BASKARAN) (VIVEK VARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 13 TH AUGUST, 2014 36/ COPY TO:- 1) 12/ THE APPELLANT. 2) 3412/ THE RESPONDENT. 3) THE CIT (A)-29, MUMBAI. 4) = 17 , MUMBAI / THE CIT-17, MUMBAI. 5) >?36* , , THE D.R. A BENCH, MUMBAI. 6) ?@!A M/S KAMAR INFRASTRUCTURE ITA NO. 3468/MUM/2013 4 COPY TO GUARD FILE. :* / BY ORDER / / TRUE COPY / / [ B/CD , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI *FGC* .*. * CHAVAN, SR. PS