DR. SURENDRAKUMAR G. PATVA, MUMBAI V. ITO 16(3)(3), MUMBAI

ITA 4004/MUM/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2333 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 03-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 26-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 234B; 68

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI , BEFORE SHRI SANJAY ARORA , A M ./ I.T.A. NO. 4004/MUM/2015 ( / ASSESS MENT YEAR: 2009 - 10 ) DR. SURENDRAKUMAR G. PATVA C/O. SHIND & CO., 19/146 ANAND NAGAR, VAKOLA BRIDGE, SANTACRUZ (E), MUMBAI - 400 055 / VS. ITO - 16(3)(3), MUMBAI ./ ./ PAN/GIR NO. AHJPP 8546 N ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENT BY : SMT. BHARATI SINGH / DATE OF HEARING : 03.11.2015 / DATE OF PRONOUNCEMENT : 20 .11.2015 / O R D E R PER SANJAY A RORA, A. M.: THIS IS AN A PPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 7 , MUMBAI (CIT(A) FOR SHORT) DATED 27.02.2015 , DISMISSING THE A SSESSEES APPEAL CONTESTING ITS ASSESSMENT U/S.143(3) OF THE INCOME TAX ACT, 1961 (THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR (A.Y.) 2009 - 10 VIDE ORDER DATED 27.12.2011 . 2. WE SHALL PROCEED GROUND - WISE. THE FACTS IN RELATION TO GROUND 1 ARE THAT THE ASSESSEE, A D OCTOR BY PROFESSION, WAS DURING THE COURSE OF ASSESSMENT PRO CEEDINGS 2 ITA NO. 4004/MUM/2015 (A.Y. 2009 - 10) DR. SURENDRAKUMAR G. PATVA VS. ITO OBSERVED TO HAVE RECEIVED CASH LOANS AGGREGATING TO RS.9,56,665/ - DURING THE RELEVANT YEAR IN VARIOUS SUMS RANGING FROM RS.15,000/ - TO RS.19,500/ - . ON BEING CALLED UPON TO EXPLAIN, THE SAME WERE STATED TO BE FROM FRIENDS AND RELATIVES. HOWEVER, TH E SAME WERE NOT SUPPORTED BY CONFIRMATIONS. THE NAMES AND ADDRESSES OF THE CREDITORS WERE ALSO NOT FURNISHED. THE CREDITS WERE UNDER THE CIRCUMSTANCES TREATED AS UNEXPLAINED. NO IMPROVEMENT IN ITS CASE COULD BE EFFECTED BY THE ASSESSEE IN APPEAL. THOUGH TH E ASSESSEE CLAIMED A DIFFERENT AGGREGATE SUM, THE SAME STOOD IN FACT CONFIRMED BY THE ASSESSING OFFICER (A.O.) VIDE HIS ORDER U/S.154 DATED 17.01.2012, STATING THE FIGURE OF RS.9.57 LACS TO BE CORRECT, I.E., BASED ON THE CASH BOOK AS PRODUCED , BEARING RECE IPTS FROM 10.8.2008 TO 31.03.2009. FURTHER , IT WAS OBSERVED BY THE LD. C IT(A) THAT THOUGH THE NAMES OF THE CREDITORS WERE SUBMITTED, THEIR ADDRESSES, PAN, CONFIRMATIONS, WERE NOT. EVEN NO DOCUMENT TO EVIDENCE THEIR CREDITWORTHINESS HAD BEEN FURNISHED. THE ADDITION U/S. 68 OF THE ACT WAS, ACCORDINGLY, CONFIRMED , AND AGAINST WHICH THE ASSESSEE IS IN FURTHER APPEAL . 3. THE PARTIES HAVE BEEN HEARD, AND THE MATERIAL ON RECORD PERUSED. THE ASSESSEES ONLY CASE BEFORE THE T RIBUNAL W AS THAT THE CASH LOANS RECEIVE D WERE IN FACT AT A MUCH LOWER SUM OF RS.3,85,430/ - . THE PAPERS SUBMITTED IN SUPPORT OF THE CLAIM ARE NOT CERTIFIED AS TRUE COPIES, BEING , IN FACT , NOT IN THE FORM OF A PAPER - BOOK. FURTHER, A PERUSAL OF THE SAME AS WELL AS THAT FILED BEFORE THE FIRST APPEL LATE AUTHORITY, REVEAL DIFFERENT FIGURES BEING CLAIMED AS THE AMOUNT OF CASH LOANS, VIZ. AT RS.3,55,330/ - AS PER THE MEMO OF APPEAL BEFORE THE LD. CIT(A); RS.4,59,500/ - PER THE STATEMENT OF CASH LOANS RECEIVED FROM 10.08.2008 TO 05.01.2009 ( ADDUCED NOW) ; A ND AT RS.3,85,430/ - , PER THE SUMM ARY OF CASH - BOOK (ADDUCED NOW) . IT HAS ALREADY BEEN EXPLAINED THAT THE DOCUMENTS BEING RELIED UPON CANNOT BE SAID TO FORM PART OF THE RECORD, BEING NOT PER A PAPER - BOOK, I.E., CONTAINING DOCUMENTS BEFORE THE AUTHORITIES BEL OW NOR CERTIFIED FOR BEING TRUE COPIES. IN FACT, ALL THAT THE ASSESSEE , TO SUBSTANTIATE ITS CLAIM , WAS REQUIRED TO DO WAS TO PRODUCE THE A.O.S LETTER DATED 20.12.2011 ( TO 3 ITA NO. 4004/MUM/2015 (A.Y. 2009 - 10) DR. SURENDRAKUMAR G. PATVA VS. ITO HIM ), CALLING FOR THE EXPLANATION FOR THE CREDITS (REFER PA GE 2 OF THE ASSESSMENT OR DER) , AS WELL AS THE ASSESSEE S REPLY THERETO IN - AS - MUCH AS , THE DIFFERENCE BEING SUBSTANTIAT E , THIS WOULD BE THE FIRST OBJECTION THAT THE ASSESSEE WOULD HAVE RAISE D IN THE MATTER . THE A.O. HAS ALREADY CONFIRMED PER S. 159 ORDER (SUPRA) THE FIGURE ADOPTED IN ASSESSMENT TO BE IN TERMS OF THE CASH - BOOK PRODUCED BEFORE HIM DURING THE ASSESSMENT PROCEEDINGS . THE ASSESSEES BALANCE - SHEET (AS ON 31.03.2009) ( NOW PRODUCED ) , ASSUMING THE SAME AS FILED ALONG WITH THE RETURN OF INCOME, ITSELF SHOWS THE UNSECURED LOAN S AS WELL AS THE DEPOSITS FROM THE PAT I ENTS TO BE AT RS.15.96 LACS AND RS.5.8 LACS (AS ON 31.3.2009) RESPECTIVELY. THE ADDITION U/S.68 IS UNDER THE CIRCUMSTANCES CONFIRMED; THE PARAMETER OF SECTION 68 BEING CLEARLY UNSATISFIED. I DECIDE ACCORDINGLY. 4. TH E SECOND DISALLOWANCE AGITATED IN APPEAL IS IN RESPECT OF INTEREST EXPENDITURE, CLAIMED IN THE SUM OF RS.13,80,027/ - , ON PROPORTIONATE BASIS, AT RS.80,774/ - . THE REASON FOR THE DISALLOWANCE IS THE INVESTMENT BY THE ASSESSEE IN SUSHILA HOSPITAL (RS.1.28 LAC S) AND BY WAY OF LOAN S AND ADVANCE S (AT RS.5.45 LACS) , ON WHICH NO INCOME IS GENERATED, EVEN AS THEY ARE FINANCED BY BORROWED FUNDS, APPLYING INTEREST @ 12% P.A. IN APPEAL, THE ASSESSEE EXPLAINED THAT THE AMOUNTS WERE ALREADY ADVANCED FOR THE PURCHASE OF S URGICAL INSTRUMENT S, ON WHICH THEREFORE NO INTEREST COULD BE CHARGED. THE SAME DID NOT FIND FAVOUR AS THE CONTENTION WAS NOT SUBSTANTIATED WITH ANY EVIDENCE. IN FURTHER APPEAL BEFORE TH IS TRIBUNAL, NO IMPROVEMENT IN ITS CASE COULD BE MADE BY THE ASSESSEE. THE AMOUNTS, IT IS STATED, HAD BEEN ADVANCED IN EARLIER YEARS. IN THAT CASE, THERE WOULD DEFINITELY BE SOME CORRESPONDENCE F OR/OR FOLLOW - UP BY THE ASSESSEE SEEKING REASONS FOR OR TO EXPEDITE THE DELAY IN THE PURCHASE , W HICH WOULD SUBSTANTIATE ITS CLAIMS AN D , BESIDES, ALSO REVEAL THE REASON FOR THE NON - SUPPLY OF GOODS. THE PURPOSE OF ADVANCE TO SUSHILA HOSPITAL IS ALSO NOT SPELLED OUT . IT IS ONLY W HERE THE ADVANCE IS SHOWN TO BE FOR THE PURPOSE OF ASSESSEES BUSINESS OR PROFESSION, THAT INTEREST ATTRIBUTABLE THERETO COULD NOT BE ALLOWED. THE ASSESSEES CASE IS WHOLLY UNEVIDENCED. UNDER THE CIRCUMSTANCES , INTERFERENCE IS DECLINED. I DECIDE ACCORDINGLY. 4 ITA NO. 4004/MUM/2015 (A.Y. 2009 - 10) DR. SURENDRAKUMAR G. PATVA VS. ITO 5. THE THIRD AND THE FINAL GROUND OF APPEAL RELATES TO THE DISALLOWANCE OF CONSULTATION FEES IN THE SUM OF R S.1,05,300/ - , PAID TO THREE D OCTORS, IN EXCESS OF RS.20,000/ - EACH (R EFER PG. 2 OF THE ASSESSMENT ORDER). THE SAME STANDS DISALLOWED FOR NON - DEDUCTION AND DEPOSIT OF TAX AT SOURCE ( TDS ) , AND CONFIRMED BY THE LD. CIT(A) FOR THE SAME REASON. THE ASSESSEES O NLY CASE BEFORE THE TRIBUNAL IS THAT THE AMOUNT STOOD PAID DURING THE YEAR, SO THAT NO AMOUNT WAS PAYABLE AS AT THE YEAR - END AND, THEREFORE, SECTION 40(A)(IA) SHALL NOT APPLY, RELYING ON THE DECISION IN THE CASE OF MERILYN SHIPPING & TRANSPORTS V. ADDL. C IT [ 2012 ] 136 ITD 23 (VISH) (SB). 6. THE PARTIES HAVE BEEN HEARD, AND THE RECORD PERUSED. THE DEFAULT IN THE NON - COMPLIANCE OF THE TDS PROVISION, I.E., IN FIRST DEDUCTING TAX AT SOURCE THEN DEPOSITING THE TAX , IS ADMITTED . SECTION 40(A)(I) ONLY INTRODUCE S A TIMING EFFECT, SO THAT ON THE DEDUCTION OF TAX AND ITS DEPOSIT, THE CORRESPONDING AMOUNT WOULD STAND TO BE ALLOWED AS DEDUCTION FOR THAT YEAR, I.E ., THE YEAR OF DEPOSIT/PAYMENT (REFER : TU B E INVESTMENTS OF INDIA LTD. VS. ASST. CIT [2010] 325 ITR 610 (MA D)) . THE ASSESSEES RELIANCE IN THE CASE OF MERILYN SHIPPING & TRANSPORTS (SUPRA) IS OF LITTLE CONSEQUENCE IN VIEW OF THE DECISIONS BY THE HONBLE COURTS, AS IN THE CASE OF CIT VS. CRESCENT EXPORT SYNDICATE [2013] 216 TAXMANN 258 (CAL) AND CIT VS. SIKANDARKHAN N. TUNVAR [2013] 357 ITR 312 (GUJ), OVERRULING MERILYN SHIPPING & TRANSPORTS (SUPRA). T HE MATTER STANDS ALSO DISCUSSED AT LENGTH BY THE TR IBUNAL , AS IN THE CASE OF RAVIRAJ RELEMPAADU [2014] 29 ITR 387 (MUM.)(TRIB.) AND ITO VS. PRATIBHUTI VINIYOG LTD. (IN ITA NO. 1689/MUM/2011 DATED 22.08.2014) , ALSO DISCUSSION AND DISTINGUISHING THE DECISION BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. VECTOR SHIPPING SERVICES [2013] 85 CCH 201 (ALL) ; THE ISSUE OF PAID AND PAYABLE BEING NOT BEFORE THE HONBLE COURT. THE ASSESSEE FAILS ON THE RELEVANT GROUND. 7. VIDE ITS FOURTH AND THE LAST GROUND, THE ASSESSEE CONTEST THE LEVY OF INTEREST U /S. 234B OF THE ACT. THE SAME, AS IS WELL SETTLED, IS MANDATORY AND CONSEQUENTIAL AND , ACCORDINGLY , THERE IS NO MERIT IN THE ASSESSEES CASE. I DECIDE ACCORDINGLY. 5 ITA NO. 4004/MUM/2015 (A.Y. 2009 - 10) DR. SURENDRAKUMAR G. PATVA VS. ITO 8. BEFORE PARTING WITH THIS ORDER, IT IS OBSERVED THAT THE ASSESSEES APPEAL BEFORE THE LD. CIT(A) WAS DELAYED BY A PERIOD OF OVER TWO MONTHS. THE SAID DELAY WAS NOT CONDONE D BY THE LD. CIT(A) IN THE ABSENCE OF ANY EXPLANATION FOR THE DELAY BY THE ASSESSEE (REFER PARA 4 OF THE IMPUGNED ORDER), BUT WHO NEVERTHELESS PROCEEDED TO DECIDE THE APPEAL , I.E., WITHOUT PREJUDICE. THE ASSESSEES, WHO HAS NOT AGITATED THIS ASPECT OF THE MATTER BEFORE THIS TRIBUNAL, APPEAL IS THEREFORE NOT MAINTAINABLE . IN FACT, T HE SAID ACTION OF THE LD. C IT(A) IS NOT APPROVED OF IN - AS - MUCH AS IT IS ONLY UPON ADMISSION OF APP EAL THAT HE WOULD ASSUME JURISDICTION TO ADJUDICATE THE SAME. THIS ASPECT OF THE MATTER, I.E., OF THE FIRST APPEAL BEING DELAYED AND NOT CONDONED, WAS NOT BROUGHT TO THE NOTICE OF THE BENCH DURING THE HEARING OF THE INSTANT APPEAL , AND ONLY CAME TO NOTICE ONLY SUBSEQUENTLY AT THE TIME OF DICTATION OF THIS ORDER . IT IS UNFORTUNATE THAT NEITHER PARTY BROUGHT THIS TO THE NOTICE OF THE TRIBUNAL , WHICH ACCORDINGLY PROCEEDED TO HEAR THE APPEAL ON MERITS. THE OBJECTION TO THE ACTION OF THE LD. CIT(A), AS AFORE - STA TED , WOULD ACCORDINGLY OBTAIN FOR TH E TRIBUNAL AS WELL. HOWEVER, IN - AS - MUCH AS THE APPEAL WAS HEARD ON MERITS, OBLIVIOUS OF THE SAID FACT, IT IS UNDER THE CIRCUMSTANCES ONLY CONSIDERED IT PROPER THAT, SIMILARLY , A DECISION BE RETAINED ON THE MERITS OF THE CASE AS WELL, I.E., UNDER THE PECULIAR CIRCUMSTANCES OF THE CASE, WHICH WOULD THOUGH ONLY BE WITHOUT PREJUDICE IN - AS - MUCH AS THE JURISDICTION ISSUE OF THE MAINTAINABILITY OF THE APPEAL SHALL PREVAIL. 9. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 20 , 201 5 SD/ - (S ANJAY ARORA) / A CCOUNTANT MEMBER MUMBAI ; DATED : 20 . 11 .201 5 . . ./ ROSHANI , SR. PS 6 ITA NO. 4004/MUM/2015 (A.Y. 2009 - 10) DR. SURENDRAKUMAR G. PATVA VS. ITO / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F ILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI