RAVI ISHWAR GHANSHANI, MUMBAI V. ITO 17(3)(4), MUMBAI

ITA 4028/MUM/2012

• Counselvise Citation: 402819914 RSA 2012
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Next Hearing Date: 15-05-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DEEPAK
• Assessee Lawyers: K R LAKSHMINARAYAN
• Section: 143(3); 133A; 148

Judgement Text

D IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI .. , # %, & # ' BEFORE SHRI P.M. JAGTAP, AM AND SHRI SANJAY GARG, J M ./ I.T.A. NO.4028 /MUM/2012 ( &% % / ASSESSMENT YEAR : 2008-2009 MR. RAVI ISHWAR GHANSHANI, 101, NILGIRI INDUSTRIAL ESTATE, 2/183, TOKERSEY JIVRAJ ROAD, SEWRI (W), MUMBAI 400 015. / VS. INCOME TAX OFFICER 17(3)(4), 6 TH FLOOR, PIRAMAL CHAMBERS, MUMBAI 400 012. ./ PAN : AAAPI1086L ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI K.R. LAKSHMINARAYAN R E SPONDENT BY : SHRI DEEPAK / DATE OF HEARING : 13-05-2014 / DATE OF PRONOUNCEMENT : 21#05#2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. CIT(A) 29, MUMBAI DATED 9-3-2012 AND ALTHOUGH AS MANY AS NINE GROUNDS ARE RAISED THEREIN, THE LD. COUNSEL FOR THE ASSESSE E AT THE TIME OF HEARING BEFORE US HAS PRESSED ONLY GROUND NO. 3 & 4 WHICH I NVOLVE COMMON ISSUE RELATING TO ADDITION OF RS. 72 LACS MADE BY THE A.O . AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF DIFFERENCE IN THE AMOUNTS OF U N-SECURED LOANS AND SUNDRY CREDITORS AS FOUND DURING THE COURSE OF SURV EY AND AS REFLECTED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. ITA 4028/M/12 2 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS ENGAGED IN THE BUSINESS OF TRADING READYMADE GARMENTS UNDER THE NA ME AND STYLE OF HIS PROPRIETARY CONCERN M/S RADIANCE GALORE. THE RETUR N OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY HIM ON 29-9-2008 D ECLARING TOTAL INCOME OF RS. 8,78,980/-. A SURVEY ACTION U/S 133A OF THE INC OME TAX ACT, 1961 WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E ON 16-2-2010 AND ON THE BASIS OF THE FINDINGS OF THE SAID SURVEY, THE ASSES SMENT FOR THE YEAR UNDER CONSIDERATION WAS REOPENED BY THE A.O. BY ISSUING N OTICE U/S 148 OF THE ACT ON 18-3-2010. IN RESPONSE TO THE SAID NOTICE, A LE TTER DTD. 15-4-2010 WAS FILED BY THE ASSESSEE STATING THEREIN THAT THE RETU RN OF INCOME ORIGINALLY FILED ON 29-9-2008 MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. DURING THE COURSE OF REASSESSMENT PROC EEDINGS, IT WAS NOTICED BY THE A.O. THAT THE AMOUNTS OF UNSECURED LOANS AND SU NDRY CREDITORS FOUND RECORDED IN THE RELEVANT DOCUMENTS IMPOUNDED DURING THE COURSE OF SURVEY WERE RS. 77 LACS AND RS. 86,89,847/- RESPECTIVELY W HEREAS IN THE AUDITED BALANCE SHEET FILED BY THE ASSESSEE ALONG WITH HIS RETURN OF INCOME, UNSECURED LOANS WERE SHOWN AT RS. 5 LACS AND SUNDRY CREDITORS WERE SHOWN AT RS. 1,58,89,847/-. THERE WAS THUS AN INCREASE I N SUNDRY CREDITORS AND DECREASE IN UNSECURED LOANS BY RS. 72 LACS AND SINC E THIS DIFFERENCE COULD NOT BE EXPLAINED BY THE ASSESSEE TO THE SATISFACTION OF THE A.O., THE SAME WAS ADDED BY THE A.O. TO THE TOTAL INCOME OF THE ASSESS EE IN THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT VIDE AN ORDER DTD. 31-12-2010. 2. AGAINST THE ORDER PASSED BY THE A.O. U/S 143(3) R.W.S. 147 OF THE ACT, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) DISPUTING THEREIN THE ADDITION OF RS. 72 LACS MADE BY THE A.O . AFTER CONSIDERING THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) CONFIRMED THE ADDITION OF RS. 72 LACS MADE BY THE A.O. FOR THE FOLLOWING REASONS GIVEN IN HIS IMPUGNE D ORDER:- ITA 4028/M/12 3 (I) THE DISPUTED PAPER WAS FOUND DURING THE COURSE OF SURVEY FROM THE POSSESSION OF THE APPELLANT AND APPELLANT IS DU TY BOUND TO EXPLAIN ITS CONTENT. THE CLAIM OF THE APPELLANT THAT IT WAS FOR BANK PURPOSES ALSO CANNOT BE ACCEPTED. IT IS BECAUSE, NO EVIDENCE , THAT IT WAS FILED BEFORE THE BANK HAS BEEN FILED, EITHER BEFORE ASSES SING OFFICER OR IN APPEAL PROCEEDINGS. (II) THERE IS A REFERENCE TO THIS KIND OF PAPER IN THE STATEMENT OF RAVI GHANSHANI DATED 13.2.2010. THE AUTHORIZED OFFICER I N 0 38 POINTS OUT THAT ON PAGE 39 OF LOOSE PAPER FILE 1 THERE IS A NO TE : PLEASE ADV. WHERE TO ADJUST THIS AMOUNT OF RS.77,00,000 AND U I HAVE ALREADY ADJUSTED THE UNSECURED LOANS IN CONNECTION WITH SUNDRY CREDI TORS. THE AUTHORIZED OFFICER POINTS OUT TO APPELLANT THAT THE RE IS MANIPULATION IN BOOKS OF ACCOUNT. THE APPELLANT SIMPLY SAYS THAT IT IS FOR BANK. HOWEVER THERE ARE SEVERAL OTHER ENTRIES SUCH AS NE ED SUNDRY CREDITOR FOR GOODS AT RS.2726,178/- AMOUNT ALREADY CHANGED A S ABV. (Q.NO.39). THIS CLEARLY INDICATES THE BOOKS OF ACCOUNT WERE DO CTORED TO CLAIM NON- GENUINE PURCHASES AND SUNDRY CREDITORS. (III) THERE ARE SEVERAL OTHER DISCREPANCIES FOUND D URING THE COURSE OF SURVEY WHICH WERE NOT EXPLAINED BY THE APPELLANT SA TISFACTORILY. (A) DURING SURVEY CASH BALANCE OF RS.9,20,223/- WAS FOUND IN COMPUTERIZED BOOKS. HOWEVER NO CASH WAS FOUND ACTUA LLY APPELLANT STATED THAT (Q.20) CERTAIN EXPENSES WERE PERHAPS NOT RECORDED. AUTHORISED OFFICER POINTED OUT THAT APPEL LANT IS GIVING CONTRADICTORY STATEMENTS. (B) IN Q.23 AUTHORISED OFFICER POINTED OUT THAT THE RE IS AN EXCESS DEBIT OF PURCHASES TO THE TUNE OF RS 2 09607 811- WHICH WAS IN EXCESS OF COMPUTERIZED BOOKS. (C) IN Q.27 AUTHORISED OFFICER POINTED OUT A PAPER RELATING TO CERTAIN LOANS, INTEREST PAYMENTS AND SUNDRY CREDITO RS ETC AND APPELLANT ACCEPTED THAT THEY ARE NOT RECORDED IN HI S BOOKS OF ACCOUNTS. (D) MANY PAPERS FOUND AND DISCUSSED IN Q.28 TO 32 C OULD NOT BE EXPLAINED BY THE APPELLANT AND HE CLAIMED THAT T BELONGS TO HIS FATHER. HENCE IT CAN BE SEEN THE BOOKS OF ACCOUNTS OF THE A PPELLANT WERE NOT RELIABLE. (IV) THE APPELLANT HAS FAILED TO EXPLAIN HOW SIMILA R BALANCE SHEETS WERE ALSO FOUND FOR AYS 2004-05 AND 2007-08 ALSO. ITA 4028/M/12 4 3. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IT IS OBSERV ED THAT A SIMILAR ISSUE WAS INVOLVED IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2004-05 AND 2007-08 WHEREIN SIMILAR ADDITIONS OF RS. 60 LACS AND RS. 78 LACS WERE MADE TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF DIFFEREN CE IN THE AMOUNTS OF UNSECURED LOANS AND SUNDRY CREDITORS AS REFLECTED I N THE RELEVANT DOCUMENTS FOUND DURING THE COURSE OF SURVEY AND AS REFLECTED IN THE AUDITED BALANCE SHEET OF THE ASSESSEE. WHEN THE MATTER REACHED TO THE TRIBUNAL, THE CO- ORDINATE BENCH OF THIS TRIBUNAL VIDE ITS COMMON ORD ER DTD. 30-4-2014 PASSED IN ITA NO. 4026 AND 4027/MUM/2012 RESTORED THE SIMI LAR ISSUE TO THE FILE OF THE A.O. AFTER GIVING ITS OBSERVATIONS/DIRECTIONS I N PARA 11TO 13 WHICH READ AS UNDER:- 11. IT IS A FACT THAT IF A DOCUMENT IS FOUND FROM THE POSSESSION OF THE ASSESSEE, IT IS FOR THE ASSESSEE TO EXPLAIN THE DOC UMENT AND ITS CONTENTS. IN THE INSTANT CASE, THE DOCUMENT FOUND SHOWS IMPACT I N THE BALANCE SHEET, WHEREIN UNSECURED LOANS HAD BEEN REDUCED AND SUNDRY CREDITORS HAD BEEN INCREASED, WHICH HAD AN OVERALL FALL OUT OF RS. 60, 00,000/- IN THE ACCOUNTS INTER SE . THIS ADJUSTMENT, ACTUALLY DID NOT HAVE AN EFFECT ON THE REVENUE STATUS OF THE ASSESSEE. 12. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERE D OPINION THAT THE ISSUE NEEDS TO BE READJUDICATED BY TAKING BY TAKING INTO ACCOUNT THE VOUCHERS AND OTHER CONNECTED DOCUMENTS. 13. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT(A ), ON THIS ISSUE AND DIRECT THE AO TO READJUDICATE THE ISSUE ON FACTS AND AS PE R LAW, NEEDLESS TO MENTION THAT THE ASSESSEE SHALL BE GRANTED REASONABLE AND A DEQUATE OPPORTUNITY TO PRESENT HIS CASE. 4. AS THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDER ATION AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE SIMILAR TO ASSE SSMENT YEARS 2004-05 AND 2007-08, WE RESPECTFULLY FOLLOW THE ORDER OF THE CO -ORDINATE BENCH OF THIS TRIBUNAL FOR ASSESSMENT YEARS 2004-05 AND 2007-08 A ND RESTORE THE MATTER TO THE FILE OF THE A.O. FOR DECIDING THE SAME AFRES H AS PER THE SAME DIRECTION AS GIVEN BY THE TRIBUNAL IN ASSESSMENT YEARS 2004-0 5 & 2007-08. ITA 4028/M/12 5 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 21#05#2014 . . / 0 21#05#2014 SD/- SD/- (SANJAY GARG) (P.M. JAGTAP ) .3 JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 0 DATED 21#05#2014 [ .3../ RK , SR. PS , -&./ 0/ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 5 () / THE CIT(A)29, MUMBAI. 4. 5 / CIT 17, MUMBAI 5. 8 33: , : , / DR, ITAT, MUMBAI D BENCH 6. = / GUARD FILE. / BY ORDER, 8 3 //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI