GOLDMOHUR DESIGN & APPARELS PARK LTD, MUMBAI V. DCIT CIR 6(3), MUMBAI

ITA 3720/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0187 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 18-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 17-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJAT MITTAL
• Keywords: Unexplained investment; Opportunity of being heard
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C MUMBAI BEFORE SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI N.K. PRADHAN (ACCOUNTANT MEMBER) ITA NO. 3720/MUM/2015 ASSESSMENT YEAR: 2011 - 12 GOLDMOHUR DESIGN & APPARELS PARK LTD. GOLDMOHUR MILLS, DADA SAHEB PHALKE ROAD, DADAR (E), MUMBAI - 400014. VS. DCIT - 6(2) AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 . PAN NO. A ADCG1613M APPELLANT RESPONDENT ASSESSEE BY : MS. DINKLE HARIYA , AR REVENUE BY: MR. RAJAT MITTAL, DR DATE OF HEARING : 30 /05/2017 DATE OF PRONOUNCEMENT: 24/08/2017 ORDER PER N.K. PRADHAN, A.M THIS IS AN APPEAL FILED BY THE ASSESSEE. THE RELEVANT ASSESSMENT YEAR IS 2011 - 1 2 . THE APPEAL IS DIRECTED AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX (APPEALS) - 21 , MUMBAI AND ARISES OUT OF THE ASSESSMENT COMPLETED U/S 143(3 ) OF THE INCOME TAX ACT 1961, (T HE ACT). ITA NO. 3720/MUM/2015 2 2. THE GROUNDS OF APPEAL READ AS UNDER: - 1.1 THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 21, MUMBAI, ['LD. CIT (A)'] ERRED IN CONFIRMING THE ACTION OF THE DEPUTY COMMISSIONER OF INCOME - TAX, CIRCLE - 6 (3), MUMBAI ['THE A.O.'] IN MAKING ADDITION OF RS.38,37,418/ - U/S. 69 OF THE INCOME - TAX ACT, 1961 ['THE ACT'] ON ACCOUNT OF ALLEGED UNEXPLAINED PURCHASES. 1.2 WHILE DOING SO, THE LD. CIT (A) ERRED IN: (I) BASING HIS ACTION ONLY ON SURMISES, SUSPICION AND CONJECTURE; (II) TAKING INTO ACCOUNT IRRELEVANT AND EXTRANEOUS CONSIDERATIONS; AND (III) IG NORING RELEVANT MATERIAL AND CONSIDERATIONS AS SUBMITTED BY THE APPELLANT. 1.3 IT IS SUBMITTED THAT, IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, AND IN LAW, NO SUCH ADDITION WAS CALLED FOR. 1.4 WITHOUT PREJUDICE TO THE ABOVE, IN THE ALTERNATIVE, ASSUMING - BUT NOT ADMITTING - THAT SOME DISALLOWANCE WAS CALLED FOR, THE COMPUTATION OF THE SAME IS NOT IN ACCORDANCE WITH THE LAW, IS ARBITRARY AND EXCESSIVE. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER (AO) ISSUED NOTICE U/S 133(6) TO M/S ARKAN FASHION. THE SAID NOTICE WAS RECEIVED BY THE AO AS UNSERVED. THE AO NOTED THAT THE ASSESSEE FAILED TO ESTABLISH THE CORRESPONDING SALES BY PRODUCING THE STOCK REGISTER. AS THE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF TRANSACTION WITH M/S ARKA N FASHION, THE AO MADE AN ADDITION OF RS.38,37,418/ - AS UNEXPLAINED INVESTMENT U/S 69. ITA NO. 3720/MUM/2015 3 4. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HELD THAT THE ASSESSEE FAILED TO DEMONSTRATE WITH PRODUCTION REGISTER, MANUFACTU RING ACCOUNT AND STOCK REGISTER. AS THE ASSESSEE FAILED TO ESTABLISH THE PURCHASES OF RS.38,37,418/ - SHOWN IN THE NAME OF ARKAN FASHION, THE LD. CIT(A) CONFIRMED THE ADDITION MADE BY THE AO. 5. BEFORE US, THE LD. C OUNSEL OF THE ASSESSEE FILES DOCUMENTS PERTAINING TO COMMUNICATION DURING APPELLATE PROCEEDINGS IN THE BOOKS OF ARKAN FASHION VIZ. (I) PURCHASE BILLS (I I ) PAN CARD, ( I II) RETURN OF INCOME OF AFROZ NIYAZ HASHMI, (I V ) LEDGER ACCOUNT OF THE ASSESSE E, (V) CONFIRMATION OF ACCOUNT (V I) BANK ACCOUNT AND AUDITED BALANCE SHEET. THE LD. COUNSEL CLARIFIES THAT THE ABOVE DOCUMENTS WERE FILED FOR THE FIRST TIME BEFORE THE CIT(A). THAT MEANS THESE WERE NOT FILED BEFORE THE AO. 6. ON THE OTHER HAND, THE LD. DR SUPPORTS THE ORDER PASSED BY THE LD. CIT(A). HE SUBMITS THAT THE ASSESSEE FAILED TO FILE THE STOCK REGISTER BEFORE THE AO AND THE LD. CIT(A) HAS RIGHTLY CONFIRMED THE ADDITION OF RS.38,37,418/ - MADE BY THE AO. 7. WE HAVE HEAR D THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIALS ON RECORD. WE FIND THAT THE CONTENTIOUS ISSUE AT HAND COULD BE RESOLVED BY VERIFICATION OF PURCHASE BILLS, LEDGER ACCOUNT, CONFIRMATION OF ACCOUNT, BANK STATEMENT ETC. ADMITTEDLY THE ASSESSEE FAILE D TO FILE THE ABOVE DOCUMENTS BEFORE THE AO. THE ASSESSEE COULD FILE THE ABOVE DOCUMENTS ONLY BEFORE THE LD. CIT(A). THUS TO ARRIVE AT A PROPER ITA NO. 3720/MUM/2015 4 CONCLUSION, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF THE AO TO PASS A FRES H ASSESSMENT ORDER IN THE LIGHT OF OUR OBSERVATION AND AFTER GIVING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. WE ALSO DIRECT THE ASSESSEE TO FILE THE RELEVANT DETAILS BEFORE THE AO. 8. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATISTICAL PU RPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24/08/2017. SD/ - SD/ - (MAHAVIR SINGH) (N.K. PRADHAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED: 24/08/2017 RAHUL SHARMA, SR. P.S. COPY OF THE ORDER FORWARDE D 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