BUSINESS INDIA, MUMBAI V. ACIT 12(1), MUMBAI

ITA 3597/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8669 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-10-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-10-2012
• Assessment Year: 1999-2000
• Appeal Filed On: 06-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: V MOHAN
• Keywords: Additional evidence
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B , MUMBAI BEFORE SHRI B. R. MITTAL, JM AND SHRI B. R. JAIN, A M ITA NOS. 3596 & 3597/MUM/2010 ASSESSMENT YEARS : 1998-99 & 1999-2000 M/S. BUSINESS INDIA 19, ADI MARZABAN PATH, BALLARD ESTATE, MUMBAI-400 001 PAN NO: AADFB 7133 Q VS. ASST. CIT 12(1), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V. MOHAN RESPONDENT BY : SHRI M OHIT JAIN DATE OF HEARING : 0 8 .10.2012 DATE OF PRONOUNCEMENT : 12.10.2012 ORDER PER B. R. JAIN, A.M. : THESE APPEALS BY THE ASSESSEE AGAINST THE ORDERS D ATED 08.03.2010 OF LD. CIT(A)-23, MUMBAI RAISES THE FOLLOWING GROUN DS IN RESPECTIVE YEARS:- GROUNDS FOR THE A.Y. 1998-99 1. ON THE FACTS & CIRCUMSTANCES OF THE CASE, THE AS SESSEE SUBMITS THAT THE ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 254 OF THE INCOME TAX ACT, 1961 IS INVALID IN LAW & BEYOND JURISDICTION AS THE LEARNED ASSESSING OFFICE R HAS NOT ISSUED ANY NOTICE UNDER SECTION 143(2) OF THE INCOM E TAX ACT, 1961 & CONSEQUENTLY THE SAID ORDER BAD IN LAW SHOUL D BE CANCELLED. ITA NOS. : 3596 & 3597/MUM/2010 M/S. BUSINESS INDIA 2 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE ASSESSING OFFICER ERRED IN BRINING TO TAX AMOUNT OF `. 15,82,500 AS INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1 961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ASSESSING OFFICER ERRED IN BRINING TO TAX AMOUNT OF `. 21,25,000 AS INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1 961. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ASSESSING OFFICER ERRED IN BRINING TO TAX AMOUNT OF `. 5,15,000 AS INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1 961. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE ASSESSING OFFICER ERRED IN BRINING TO TAX AMOUNT OF `. 22,49,666 BEING THE FIXED DEPOSIT AS INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ASSESSING OFFICER ERRED IN BRINING TO TAX AMOUNT OF `. 18,90,000 BEING THE AMOUNT BORROWED FROM VOLENT FINANCIAL SER VICES LTD. AND OUTSTANDING AS ON 31 ST MARCH, 1998 BUT WHICH AMOUNT WAS REPAID SUBSEQUENTLY AS INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. GROUNDS FOR THE A.Y. 1999-2000 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE A SSESSEE SUBMITS THAT THE ORDER PASSED UNDER SECTION 143(3) READ WITH SECTION 254 OF THE INCOME TAX ACT, 1961 IS INVALID IN LAW & BEYOND JURISDICTION AS THE LEARNED ASSESSING OFFICE R HAS NOT ISSUED ANY NOTICE UNDER SECTION 143(2) OF THE INCOM E TAX ACT, 1961 & CONSEQUENTLY THE SAID ORDER BEING BAD IN LAW SHOULD BE CANCELLED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ASSESSING OFFICER ERRED IN TREATING `. 12,40,000 AS INCOME UNDER SECTION 68 OF THE INCOME TAX ACT, 1961. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ASSESSING OFFICER ERRED IN DISALLOWING INTEREST PAY MENT OF `. 3,16,800. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ASSESSING OFFICER ERRED IN DISALLOWING BROKERAGE PA YMENT OF `. 2,93,633 IN COMPUTING THE TAXABLE INCOME. ITA NOS. : 3596 & 3597/MUM/2010 M/S. BUSINESS INDIA 3 2. IN GROUND NO. 1 IN APPEAL FOR BOTH THE YEARS THE LD. CIT(A) REJECTED THE ASSESSEES CONTENTION THAT A FRESH NOTICE U/S.1 43(2) OF THE ACT WAS REQUIRED TO BE ISSUED AND SERVED. THE REASON TAKEN BY THE LD. CIT(A) FOR REJECTING THE AFORESAID CONTENTION IS THAT THIS WAS NOT A CASE OF FRESH ASSESSMENT AND THE ASSESSMENT WAS BEING COMPLETED C ONSEQUENT TO THE REMAND DIRECTED BY THE APPELLATE TRIBUNAL. 3. HEARD PARTIES WITH REFERENCE TO MATERIAL ON RECO RD. ADMITTEDLY, THE ASSESSING OFFICER ADJUDICATED THE ISSUES REMITTED T O HIM BY THE EARLIER TRIBUNAL. THE ASSESSING OFFICER HAS ACTED WITHIN T HE SCOPE OF JURISDICTION CONTAINED IN THE REMAND ORDER. HE WAS NOT MAKING A FRESH ASSESSMENT. A NOTICE U/S.143(2) OF THE ACT WAS ISSUED AND SERVE D ON THE ASSESSEE WITHIN THE STIPULATED PERIOD FOR MAKING THE ORIGINA L ASSESSMENT. THE REMAND ORDER ONLY REQUIRED THE ASSESSING AUTHORITY TO AFFORD OPPORTUNITY BEFORE ADJUDICATING THE ISSUES AFRESH IN ACCORDANCE WITH LAW. THERE WAS THUS NO REQUIREMENT OR OBLIGATION ON ASSESSING AUTH ORITY TO ISSUE A FRESH NOTICE U/S.143(2) OF THE ACT, WHEN HIS JURISDICTION WAS TO BE FOUND FROM THE REMAND ORDER ONLY. WE, THEREFORE, DO NOT FIND A NY ERROR IN THE ORDER OF THE LD. CIT(A). THERE BEING NO MERIT IN THE GROUND NO. 1 RAISED IN BOTH THE YEARS IN APPEAL, THE SAME STAND REJECTED. 4. IN GROUND NOS. 2 TO 6, IN THE A.Y. 1998-99 AND G ROUND NOS. 2 TO 4 IN THE A.Y. 1999-2000, THE ADDITIONS WITH RESPECT TO U NEXPLAINED CASH CREDITS U/S.68 AND DISALLOWANCES FOR INTEREST AND B ROKERAGE HAVE BEEN ITA NOS. : 3596 & 3597/MUM/2010 M/S. BUSINESS INDIA 4 SUSTAINED AS THE ASSESSEE HAS FAILED TO DISCHARGE T HE ONUS THAT LAY UPON HIM U/S.68 OF THE ACT TO PROVE THE NATURE AND SOURC E OF THE CASH CREDITS AND GENUINENESS OF THE EXPENDITURE. 5. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONT ENDS THAT THERE ARE TWO TYPES OF BORROWINGS, ONE THROUGH THE BROKERS AN D ANOTHER FROM DIRECT AND INDEPENDENT SOURCE. THE BROKERS HAD APPEARED B EFORE THE ASSESSING AUTHORITY. THEY HAD CONFIRMED THE FACT THAT THEY A RE INSTRUMENTAL IN ARRANGING THE LOANS TO THE ASSESSEE. CONFIRMATIONS FROM THE CREDITORS, HOWEVER, COULD NOT BE FILED BEFORE THE AUTHORITIES BELOW AS THE SAME WERE NOT AVAILABLE WITH THE ASSESSEE AT THE RELEVANT TIM E. IN SO FAR AS THE LOANS ARRANGED DIRECTLY BY THE ASSESSEE, THE AMOUNTS SO B ORROWED STOOD REPAID IN SHORT PERIOD AND AS SUCH THE IDENTITY COULD NOT BE DOUBTED. IT HAS ALSO BEEN CONTENTED THAT ALL THE LOAN CREDITORS ARE INCO ME TAX PAYEES AND HAVE ADVANCED THE AMOUNTS OUT OF THEIR OWN SOURCES. THI S NEEDS FACTUAL VERIFICATION AND THE MATTER MAY BE REMITTED TO THE AUTHORITIES BELOW SO THAT THE ASSESSEE GETS JUSTICE. 6. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESEN TATIVE (DR) CONTENDS THAT THE ASSESSEE DID NOT CO-OPERATE IN TH E REMIT PROCEEDINGS. HE DID NOT FILE CONFIRMATIONS DESPITE EFFECTIVE OPP ORTUNITY HAVING BEEN AFFORDED BY THE ASSESSING AUTHORITY. STEREOTYPE CO NFIRMATIONS HAVE BEEN PLACED IN HIS PAPER BOOK BEFORE THE APPELLATE TRIBU NAL, BUT THERE IS NO APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE. SUCH CONFIRMATIONS ITA NOS. : 3596 & 3597/MUM/2010 M/S. BUSINESS INDIA 5 THOUGH APPARENTLY DO NOT APPEAR TO BE GENUINE BESID ES SIGNATURES THEREON APPEAR TO BE IN ONE HAND ONLY, YET THE SAME CANNOT BE TAKEN AS PART OF THE RECORD. FOR THE REMISSNESS OF THE ASSE SSEE, THE REMAND CANNOT BE GRANTED MERELY FOR ASKING. IT, THEREFORE, HAS B EEN CONTENTED THAT THE GROUNDS RAISED IN APPEAL NEED TO BE REJECTED AND AS SESSEES APPEAL BE DISMISSED IN BOTH THE YEARS. 7. HEARD PARTIES WITH REFERENCE TO THE MATERIAL ON RECORD. APPARENTLY THE APPELLANT HAS BEEN SLOW IN CO-OPERATING THE ASS ESSING OFFICER IN THE REMAND PROCEEDINGS. PRINCIPALLY, WE AGREE WITH LD. DR THAT THE REMAND SHOULD NOT BE GIVEN MERELY FOR ASKING. THIS CASE H OWEVER, IS A ONE WHERE THE BROKERS THROUGH WHOM SIZABLE AMOUNT OF LOAN IS SAID TO HAVE BEEN TAKEN, HAD APPEARED BEFORE THE ASSESSING AUTHORITY AND HAVE CONFIRMED THAT THEY ARE INSTRUMENTAL IN ARRANGING THE LOANS T O THE ASSESSEE FROM THE PARTIES UNDER CONSIDERATION. IN SO FAR AS THE DIRE CT LOANS THAT CAME TO BE TREATED AS UNEXPLAINED U/S.68 OF THE ACT, THE ASSES SEES CASE ADMITTEDLY IS THAT THE AMOUNTS SO TAKEN AS LOAN STOOD REPAID A ND THUS THE IDENTITY OF SUCH CREDITORS HAD FALLEN IN OBLIVION. A PLEA HAS ALSO BEEN RAISED BEFORE US THAT ALL THE CREDITORS ARE INCOME TAX PAYEES. T HE MAKING OF ADVANCES/LOANS TO THE ASSESSEE AND OSTENSIBLE SOURC E THEREOF IS A FACTUAL MATTER WHICH REQUIRES VERIFICATION IN THE HANDS OF THE ASSESSING AUTHORITY. THAT BEING SO AND IN THE INTEREST OF SU BSTANTIAL JUSTICE, WE CONSIDER IT APPROPRIATE TO AFFORD A LAST AND FINAL OPPORTUNITY TO THE ITA NOS. : 3596 & 3597/MUM/2010 M/S. BUSINESS INDIA 6 ASSESSEE TO STATE HIS CASE BEFORE THE ASSESSING AUT HORITY SO THAT THE DIRECTIONS CONTAINED IN THE REMAND ORDER BY THE EAR LIER TRIBUNAL ARE CARRIED OUT EFFECTIVELY AND ISSUES ADJUDICATED AFRE SH IN ACCORDANCE WITH THE LAW. NEEDLESS TO ADD THE ASSESSEE SHALL CO-OPE RATE SO THAT THE ISSUES CAN BE DECIDED BY THE ASSESSING AUTHORITY AS EXPEDI TIOUSLY AS POSSIBLE. 8. IN THE RESULT, THE APPEALS BY THE ASSESSEE STAND PARTLY ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 12.10.2012 SD/- - SD/- ( B. R. MITTAL ) ( B. R. JAIN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DT: 12.10.2012 COPY FORWARDED TO : 1. THE APPELLANT, 2. THE RESPONDENT, 3. THE C.I.T. 4. CIT (A) 5. THE DR, - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI ROSHANI