KONEGA INTERNAITONAL P.LTD, MUMBAI V. ACIT 8(3) OSD, MUMBAI

ITA 4025/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7576 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 16-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C SRINIVASA REDDY
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE SHRI. D.K. AGARWAL (JM) AND SHRI. N.K. BILLA IYA (AM) ITA NO.4025/MUM/2011 ASSESSMENT YEAR: 2006-07 KONEGA INTERNATIONAL PVT. LTD. 105, MAROL BHAVAN, MAROL CO-OP. INDUSTRIAL ESTATE, M. V. ROAD, ANDHERI (EAST), MUMBAI 400 059. PAN: VS. DCIT 8(2), AAYAKAR BHAVAN, 2 ND FLOOR, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI VIJAY MEHTA RESPONDENT BY : SHRI C. SRINIVASA REDDY DATE OF HEARING: 15.3.2012 DATE OF PRONOUNCEMENT: 21-3-2012 O R D E R PER N.K. BILLAIYA, A.M: THE PRESENT APPEAL IS PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF LD. CIT (A)-17, MUMBAI DATED 5 TH JANUARY, 2011 FOR THE ASSESSMENT YEAR 2006-07. ON LY GROUND RAISED BY THIS APPEAL IS AGAINST THE CONFIRM ATION OF ADDITION OF RS. 64,64,351/- BY THE LD. CIT (A). 2. DIRECTLY COMING TO THE FACTS OF THE CASE, ASSESS EE FILED RETURN OF INCOME ON 30.11.2006 DECLARING TOTAL LOSS OF RS. 4,47,93,393/ - WHICH WAS SELECTED FOR SCRUTINY BY ISSUE OF NOTICE U/S 143(2) FURTHER NOTICE U/S 14 2(1) ALONG WITH A QUESTIONER WAS SERVED UPON THE ASSESSEE. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS THE ASSESSING OFFICER CONFRONTED THE ASSESSEE WITH THE AIR DETAILS OBTAINED IN THE CASE OF THE ASSESSEE WHICH WERE AS FOLLOWS: 2 ITA NO.4025/MUM/2011 1) INDUS GARMENTS (I) PVT. LTD. - RS. 18,30,328/- 2) SECOND DIMENSIONS EXPORTS PVT. LTD. - RS. 21,533/- 3) MANTRA EXPORTS PVT. LTD. - RS. 9,74,807/- 4) MITTAL CLOTHING COMPANY - RS. 60,55,703/- 5) PUNIT CREATION - RS. 21,32,000/- 6) FASHION FANTACY - RS. 43,776/- TOTAL: RS.1,10,58,147/- 3. THE ASSESSING OFFICER FURTHER OBSERVED THAT OUT OF THE ABOVE, THE ASSESSEE HAS SHOWN ONLY THE FOLLOWING AMOUNTS. I) INDUS GARMENTS (I) PVT. LTD. - RS. 11,88,467/- II) PUNIT CREATION - RS. 10,82,000/- TOTAL: RS. 22,70,467/- 4. THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSE E COULD NOT RECONCILE THE DIFFERENCE OF RS. 87,87,680/- AND ACCORDINGLY THE D IFFERENCE SO ARRIVED WAS ADDED TO THE PROFIT OF THE ASSESSEE. 5. ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT (A). BEFORE THE CIT (A), THE ASSESSEE TRIED TO RECONCILE THE AIR INFORMATION WIT H THE BOOKS OF ACCOUNT. THE ASSESSEE FURTHER STATED THAT THE DIFFERENCE IS ON A CCOUNT OF REJECTION OF GOODS BY THE PARTIES AND THEREFORE NEITHER THERE WAS ANY CONFIRM ATION OF ACCEPTANCE OF GOODS OR THE ACCEPTANCE OF THEIR BILLS NOR THERE WAS ANY TD S. 6. THE ASSESSEE TRIED TO RECONCILE THE DIFFERENCE A S FOLLOWS. 3 ITA NO.4025/MUM/2011 SL. NO NAME OF THE PARTY SALES AS PER AIR SALES AS PER SALES REGISTER (ASSESSEE) SALES CONSIDERED BY THE AO IN ORDER U/S 143(3) SALES NOT CONSIDERED BY THE AO (RECORDED IN BOOKS OF A/C OF THE ASSESSEE DIFFERENCE DUE TO REJECTION OF GOODS / NON- PAYMENT BY PARTIES 1 INDUS GARMENTS (I) PVT LTD. 1,830,328 1,188,467 1,188,647 - 641,861 2 SECOND DIMENSIONS EXPORTS P. LTD. 21,533 21,533 - 21,533 - 3. MANTRA EXPORTS P.LTD. 974,807 1,001,436 - 1,001,436 - 4. MITTAL CLOTHING COMPANY 6,055,703 1,283,205 - 1,283,205 4,7 72,498 5. PUNIT CREATION 2,132,000 1,082,000 1,082,000 - 1,050,000 6. FASHION TANTACY 43,776 43,777 - - - TOTAL: 11,058,147 4,620,418 2,270,467 2,349,951 6,464, 359 7. THE LD. CIT (A) FOUND THAT THE ASSESSEE HAS SUCC ESSFULLY RECONCILED THE DIFFERENCE TO THE TUNE OF RS. 23,49,951/- BUT HOWEV ER, HE FAILED TO RECONCILE THE BALANCE OF RS. 64,64,351/-. THE LD. CIT (A) RESTRI CTED THE ADDITION MADE BY THE ASSESSING OFFICER TO THE TUNE OF RS. 64,64,351. 8. AGGRIEVED BY THIS ORDER THE ASSESSEE IS IN APPEA L BEFORE US. 9. AT THE OUTSET THE LEARNED AR VEHEMENTLY OBJECTED TO THE ACTION TAKEN BY THE AO AND BY THE LD. CIT (A). THE LEARNED AR CONTENDE D THAT THE FACTS OF THE CASE HAD NOT BEEN PROPERLY APPRECIATED BY THE LOWER AUTH ORITIES. THE ADDITIONS HAVE BEEN MADE ONLY ON THE BASIS OF THIRD PARTY INFORMAT ION TO WHICH ASSESSEE HAS NO CONTROL MOREOVER NO OPPORTUNITY WAS GIVEN TO THE AS SESSEE TO CONFIRM / DENY THE AIR DETAILS WHICH CAME FROM DIFFERENT PARTIES AND PR AYED THAT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO RECONCILE THE DIFFERENCE , IF ANY AND FURTHER SOUGHT 4 ITA NO.4025/MUM/2011 OPPORTUNITY TO CONTACT THE RELEVANT PARTIES TO COLL ECT THE DETAILS / INFORMATIONS SO THAT THE ALLEGED DIFFERENCE COULD BE RECONCILED . ON THE OTHER HAND THE LEARNED DR STRONGLY PLACED HIS RELIANCE ON THE ORDERS OF THE L OWER AUTHORITIES STATING THAT THE AO AND THE CIT [ A ] HAVE ALREADY GIVEN AMPLE OPPORTU NITY TO THE ASSESSEE . 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND FIND THAT THE AIR DETAILS OBTAINED B Y THE ASSESSING OFFICER NEED TO BE RECONCILED WITH THE BOOKS OF ACCOUNT OF THE ASSESSE E , MOREOVER SINCE THE INFORMATIONS HAVE BEEN RECEIVED FROM THIRD PARTIES , ASSESSEE OUGHT TO BE GIVEN AN OPPORTUNITY TO GATHER DETAILS / INFORMATIONS FOR TH E ALLEGED DIFFERENCE . WE THEREFORE DEEM IT FIT TO RESTORE THE MATTER BACK TO THE FILES OF THE AO WITH A DIRECTION THAT THE ASSESSING OFFICER SHOULD ALLOW THE ASSESSEE TO RECO NCILE THE DIFFERENCE, IF ANY , AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE. A CCORDINGLY, THE APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 11. IN THE RESULT, THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF MARCH, 2012. SD/- SD/- (D.K. AGARWAL) (N.K. BILLA IYA) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATE : 21-3-2012 AT :MUMBAI OKK COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 5 ITA NO.4025/MUM/2011 3. THE CIT(A), MUMBAI CONCERNED 4. THE CIT, MUMBAI CITY CONCERNED 5. THE DR A BENCH, ITAT, MUMBAI // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI