ITO WD 21(1)(2), MUMBAI V. LATE JAYAKKAR S. SHETTY, MUMBAI

ITA 3799/MUM/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62248 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 17-04-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 10-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH
• Assessee Lawyers: STANY SALDANHA
• Keywords: Additional evidence
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SHRI VIJAY PAL RAO, JM ITA NO.3799/MUM/2011 : ASST. YEAR 2007-2008 THE INCOME TAX OFFICER WARD 21(1)(2) MUMBAI. LATE JAYAKKAR S.SHETTY 101 VIRESHWAR CHAMBER M.G.ROAD, VILE PARLE (EAST) MUMBAI 400 057. PAN : AAGPS0742R. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI D.S.SUNDER SINGH RESPONDENT BY : SHRI STANY SALDANHA DATE OF HEARING : 17.04.2012 DATE OF PRONOUNCEMENT : 19.04.2012 O R D E R PER R.S.SYAL, AM : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 28.02.2011 IN RELATION TO THE ASSESSMENT YEAR 2007-2008. 2. THE FIRST GROUND IS AGAINST THE DELETION OF ADDI TION OF ` 21,48,038. BRIEFLY STATED THE FACTS OF THIS GROUND ARE THAT THE ASSESSEE FILE D RETURN DECLARING TOTAL INCOME AT ` 4,25,780. SEVERAL NOTICES WERE ISSUED FOR ASSESSMEN T WHICH REMAINED UNCOMPLIED WITH. EVENTUALLY THE A.O. PASSED ORDER U/S 144 INTER ALIA MAKING ADDITION OF ` 21,48,038 BY TREATING 25% OF THE SUNDRY CREDITORS A S A NON-EXISTING LIABILITY U/S 41(1) OF THE ACT. DURING THE COURSE OF FIRST APPELL ATE PROCEEDINGS THE ASSESSEE FURNISHED ADDITIONAL EVIDENCE. THE LEARNED CIT(A) S ENT SUCH ADDITIONAL EVIDENCE TO THE ASSESSING OFFICER AND CALLED FOR THE REMAND REP ORT. COPY OF REMAND REPORT DATED 21.02.2011 HAS BEEN PLACED ON RECORD BY THE LEARNED A.R. BASED ON THIS REMAND REPORT THE LEARNED CIT(A) DELETED THE ADDITION. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS OBSERVED THAT THE ASSESSING OFFICER IN THE REMAND REPORT HAS OPINED ON THIS ASPECT THAT IT APPEARS THAT THE CREDITORS HAVE RUNNING ACCOUNT WITH THE ASSESSEE. ITA NO.3799/MUM/2011 LATE JAYAKKAR S.SHETTY. 2 HOWEVER THE ASSESSEE HAS NOT PRODUCED THE BOOKS OF ACCOUNTS BEFORE THE UNDERSIGNED TO VERIFY THE GENUINENESS OF THE CREDITORS . IT IS BORNE OUT FROM THE IMPUGNED ORDER THAT THE ASSESSEE FURNISHED LIST OF SUNDRY CREDITOR S AS ON 31.03.2007 AND 31.03.2008 AFTER WHICH THE ASSESSING OFFICER DID NOT REQUIRE T HE ASSESSEE TO PRODUCE THE BOOKS OF ACCOUNT. THIS FACT HAS NOT BEEN CONTROVERTED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE. IN THAT VIEW OF THE MATTER IT BECOM ES CLEAR THAT THE A.O. WAS NOT JUSTIFIED IN MAKING ADDITION ON AD HOC BASIS AT THE RATE OF 25% OF THE SUNDRY CREDITORS U/S 41(1) OF THE ACT, MORE SO WHEN ALL THE CREDITO RS WERE HAVING RUNNING ACCOUNTS. WE, THEREFORE, UPHOLD THE IMPUGNED ORDER ON THIS IS SUE. 4. THE ONLY OTHER GROUND IS AGAINST THE DELETION OF ADDITION OF ` 25 LAKH ON ACCOUNT OF ESTIMATED SALES. IN THE ABSENCE OF ANY B OOKS OF ACCOUNT PRODUCED BEFORE THE A.O. DURING THE ASSESSMENT PROCEEDINGS, HE MADE ADDITION OF ` 25 LAKH ON ACCOUNT OF ESTIMATED SALES. DURING THE REMAND PROCEEDINGS T HE ASSESSEE FURNISHED NECESSARY DETAILS WHICH FACT HAS BEEN ADMITTED BY THE A.O. IN THE REMAND REPORT ALSO. IT IS OBSERVED THAT THE ASSESSEE DECLARED GROSS PROFIT AT 25.28% IN THIS YEAR AS AGAINST 21.81% IN THE PRECEDING YEAR. IN VIEW OF THE ASSESS ING OFFICERS COMMENTS IN THE REMAND REPORT THAT ` THE CASE BE DECIDED ON MERITS , WE ARE OF THE CONSIDERED OPINION THAT THE LEARNED CIT(A) WAS JUSTIFIED IN DELETING T HE AD HOC ADDITION OF ` 25 LAKH MADE BY THE A.O. WITHOUT ANY BASIS. THIS GROUND IS NOT A LLOWED. 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 19 TH DAY OF APRIL, 2012. SD/- SD/- (VIJAY PAL RAO) (R.S.SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 19 TH APRIL, 2012. DEVDAS* ITA NO.3799/MUM/2011 LATE JAYAKKAR S.SHETTY. 3 COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXXII, MUMBAI 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.