DCIT 5(2), MUMBAI V. MODEL SALES AGENCY P.LTD, MUMBAI

ITA 4118/MUM/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0324 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-09-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T A KHAN SR
• Keywords: Additional evidence; Onus to prove
• Section: 143(3); 5(2); 68

Judgement Text

ITA NO.4118/M/2013 MODEL SALES AGENCY PRIVATE LIMITED ASSESSMENT YEAR-2009-10 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI , , BEFORE SHRI JOGINDER SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM ./I.T.A. NO.4118/MUM/2013 ( / ASSESSMENT YEAR: 2009-10) DEPUTY COMMISSIONER OF INCOME TAX 5(2) ROOM NO.571 AAYKAR BHAVAN M.K.ROAD MUMBAI-400 020 / VS. MODEL SALES AGENCY PRIVATE L T D . 275, MAPLA MAHAL JSS ROAD THAKURDWAR CORNER GIRGAUM MUMBAI -400 004 ! ./ ./PAN/GIR NO. AAACM-3151-H ( !# /APPELLANT ) : ( $%!# / RESPONDENT ) A SSESSEE BY : NONE RE VENUE BY : T.A.KHAN (SR.AR) / DATE OF HEARING : 01/08/2017 / DATE OF PRONOUNCEMENT : 16 /08/2017 ITA NO.4118/M/2013 MODEL SALES AGENCY PRIVATE LIMITED ASSESSMENT YEAR-2009-10 2 / O R D E R PER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. THE CAPTIONED APPEAL BY REVENUE FOR ASSESSMENT Y EAR [AY] 2009- 10 ASSAILS THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-9 [CIT(A)], MUMBAI DATED 04/03/2013. NONE HAS APPEARE D ON BEHALF OF ASSESSEE DESPITE BEING PROVIDED WITH SEVERAL OPPORT UNITIES OF BEING HEARD AS PER ORDER SHEET ENTRIES AND NO ADJOURNMENT PETITION IS ON RECORD. THEREFORE, LEFT WITH NO OPTION, WE PROCEED TO DECIDE THE SAME ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE. 2. BRIEFLY STATED THE ASSESSEE BEING RESIDENT CORPORATE ASSESSEE ENGAGED AS STOCKIEST OF STATIONERY ITEMS WAS ASSESSED FOR IMPUGNED AY U/S 143(3) ON 30/12/2011 AT RS.1,54,51,580/- AFTER CERTAIN ADDITIONS / DISALLOWANCES AS AGAINST RETURNED INCOME OF RS.36,9 7,593/- E-FILED BY THE ASSESSEE ON 29/09/2009. THE ASSESSEE SUFFERED A DDITION OF RS.74,82,000/- AGAINST CASH CREDIT U/S 68 & RS.42,7 1,989/- AGAINST EXPENSES DEBITED TO PROFIT & LOSS ACCOUNT AND BOTH THESE ADDITIONS ARE THE SUBJECT MATTER OF THIS APPEAL. 3. DURING ASSESSMENT PROCEEDINGS, IT WAS NOTED THAT THE ASSESSEE REFLECTED UNSECURED LOANS OF RS.255.47 LACS, AS AGA INST RS.180.65 LACS IN THE IMMEDIATELY PRECEDING AY, FOR WHICH THE ASSE SSEE WAS ASKED TO FILE THE CONFIRMATIONS / DOCUMENTARY EVIDENCES. THE ASSESSEE FILED CONFIRMATIONS, WHICH IN THE OPINION OF LD. AO, WERE NOT SUFFICIENT TO SUBSTANTIATE THE LOANS AND ACCORDINGLY, THE DIFFERE NTIAL AMOUNT OF ITA NO.4118/M/2013 MODEL SALES AGENCY PRIVATE LIMITED ASSESSMENT YEAR-2009-10 3 RS.74.82 LACS WAS ADDED TO THE INCOME OF THE ASSESS EE AS CASH CREDIT U/S 68. 4. THE SECOND ADDITION PERTAINED TO ADHOC DISALLOWANCE OF 15% AGAINST EXPENSES DEBITED BY THE ASSESSEE IN THE PRO FIT & LOSS ACCOUNT SINCE THE ASSESSEE COULD NOT PROVE SUFFICIENT DOCUM ENTARY EVIDENCES TO SHOW THAT THE EXPENSES WERE INCURRED WHOLLY AND EXC LUSIVELY FOR BUSINESS PURPOSES. 5. AGGRIEVED, THE ASSESSEE CONTESTED BOTH THE ADDIT IONS WITH PARTIAL SUCCESS BEFORE LD. CIT(A) VIDE IMPUGNED ORDER DATED 04/03/2013 WHERE THE ASSESSEE FILED DETAILED SUBMISSIONS / EVIDENCES TO CONTEST THE ADDITIONS. THE ASSESSEE FILED DETAILS OF LOAN CREDI TORS, CONFIRMATION, THEIR INCOME TAX RETURNS AND COPIES OF SAMPLE VOUCHERS OF ADMINISTRATIVE, SELLING & DISTRIBUTION EXPENSES ETC. TO SUBSTANTIAT E THE CLAIM. ACCORDINGLY, A REMAND REPORT WAS CALLED FROM LD. AO AGAINST ADDITIONAL EVIDENCES. THE LD.CIT(A), AFTER CONSIDERING THE REM AND REPORT AND ASSESSEES SUBMISSIONS, CONFIRMED ADDITION TO THE E XTENT OF RS.8.90 LACS, BEING NOT EXPLAINED BY THE ASSESSEE SATISFACT ORILY AND DELETED THE BALANCE ADDITIONS OF RS.65.92 LACS SINCE THEY WERE EITHER OLD LOANS OR LOANS IN WHOSE RESPECT IDENTITY, CREDITWORTHINESS A ND GENUINENESS COULD BE PROVED BY ASSESSEE BY FURNISHING PAN, LOAN CONFI RMATIONS, INCOME TAX RETURNS / ORDERS. SIMILARLY, AFTER APPRECIATING THE ADDITIONAL EVIDENCES / REMAND REPORT, LD. CIT(A) RESTRICTED TH E ADHOC DISALLOWANCE OF EXPENSES TO 5%. AGGRIEVED, THE REVENUE IS IN APP EAL BEFORE US. 6. THE LD. DEPARTMENTAL REPRESENTATIVE [DR] BY PLAC ING RELIANCE ON THE FINDINGS OF LD. AO, CONTENDED THAT THE ONUS TO PROVE LOAN ITA NO.4118/M/2013 MODEL SALES AGENCY PRIVATE LIMITED ASSESSMENT YEAR-2009-10 4 TRANSACTIONS SQUARELY LIED ON THE ASSESSEE AND THE ASSESSEE HAS FAILED TO PRODUCE SATISFACTORY DOCUMENTS TO CONFIRM THE SA ME AND THEREFORE, RIGHTLY BEEN SADDLED WITH THE IMPUGNED ADDITIONS. F URTHER, THE EXPENSES CLAIMED BY THE ASSESSEE WERE NOT SUPPORTED BY PROPE R DOCUMENTARY EVIDENCES AND CERTAIN DISCREPANCIES WERE NOTED IN T HE SAME AND HENCE, DISALLOWANCE THEREOF TO THE EXTENT OF 15% WAS JUSTI FIED. 7. WE HAVE HEARD THE CONTENTIONS AND PERUSED RELEVA NT MATERIAL ON RECORD. IT IS NOTED THAT DURING APPELLATE PROCEEDIN GS, THE ASSESSEE PRODUCED ADDITIONAL EVIDENCES TO CONFIRM THE LOAN T RANSACTIONS AGAINST WHICH REMAND REPORT WAS CALLED FROM LD. AO WHICH WA S DULY CONSIDERED BY LD. CIT(A). AFTER THOUGHTFUL CONSIDERATION OF TH E SAME, THE LD. CIT(A) APPRECIATED THE EVIDENCES ADDUCED BY THE ASSESSEE PARTY-WISE AND REACHED A LOGICAL CONCLUSION, WHICH IN OUR OPINION, IS FAIR AND REASONABLE. THE LIST OF DOCUMENTS SUBMITTED BY THE ASSESSEE BEFORE LD. AO WITH RESPECT TO EACH LOAN CREDITORS HAS BEEN REP RODUCED IN THE APPELLATE ORDER ON PAGE NO.13 WHERE WE FIND THAT TH E ASSESSEE HAD SUBMITTED LOAN CONFIRMATIONS, COPY OF INCOME TAX RE TURN / ORDER & BANK STATEMENT WITH RESPECT TO PARTY NOS. 3 TO 10. THE A DDITION AGAINST PARTY NO. 1 & 2 HAS ALREADY BEEN CONFIRMED BY LD. CIT(A). THEREFORE, SINCE ASSESSEE HAD PROVED IDENTITY, GENUINENESS AND CREDI TWORTHINESS OF 8 PARTIES, HE RIGHTFULLY GOT THE RELIEF FROM LD. CIT( A). HENCE, THE DECISION OF LD. CIT(A), BEING LOGICAL AND FACTUAL ONE, REQUIRE NO INTERFERENCE ON OUR PART AND HENCE THE SAME IS ACCORDINGLY, CONFIRMED. 8. SIMILARLY, THE ASSESSEE WAS SUCCESSFUL IN SUBSTA NTIATING THE EXPENSES TO LARGE EXTENT. THE LD. CIT(A), AFTER DUE APPLICATION OF MIND, ITA NO.4118/M/2013 MODEL SALES AGENCY PRIVATE LIMITED ASSESSMENT YEAR-2009-10 5 REDUCED THE SAME TO 5% TO MAKE UP FOR THE SHORTCOMI NGS, WHICH DO NOT CALL FOR ANY INTERFERENCE ON OUR PART IN ANY MANNER . 9. RESULTANTLY, THE REVENUES APPEAL STANDS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH AUGUST, 2017. SD/- SD/- (JOGINDER SINGH) (MANOJ KUMAR AGGARWAL) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 16 .08.2017 SR.PS:- THIRUMALESH / 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 FILE / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI