DCIT CIR 2, KALYAN V. RAMESH NARAYAN PATIL, ULHASNAGAR

ITA 4156/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3768 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2019
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 06-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIYA
• Keywords: TDS
• Section: 144

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE SH. SHAMIM YAHYA , AM & HONBLE SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 4156/MUM/2017 ( / ASSESSMENT YEAR: 2010 - 11 ) DCIT CIR - 2 , 2 ND FLOOR, MOHAN PLAZA KHADAKPADA WAYALE NAGAR, KALYAN (W), KALYAN - 421301 / VS. RAMESH NARAYAN PATIL, 305, SATYA SOCIETY NEAR BHATIYA HOSPITAL, ULHASNAGAR, PIN - 421003 RAMNIK POWER & ./ ./ PAN NO. A BPPP1885J ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI CHAITANYA ANJARIYA, DR / RESPONDENTBY : NONE / DATE OF HEARING : 11 .12.2018 / DATE OF PRONOUNCEMENT : 12.02.2019 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 3 , MUMBAI DATED 15.03.2017 F OR AY 2010 - 11. 2 I.T.A. NO. 4156 /MUM/201 7 RAMESH NARAYAN PATIL 2. AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED. FROM THE ORDERSHEET, WE NOTICED THAT THE SERVICE WAS EFFECTED ON THE ASSESSEE THROUGH RPAD, BUT THE SAID NOTICE WAS RECEIVED BACK WITH REMARKS LEFT. THE ASSESSEE WAS UNDER OBLIGATION TO FURNISH NEW ADDRESS WITH T HE DEPARTMENT AND ITAT, BUT THE SAME HAS NOT BEEN DONE. THEREFORE, NOTICE WAS SENT ON THE ADDRESS MENTIONED BY ASSESSEE HIMSELF IN FORM NO. 36. ON THE OTHER HAND L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCE ED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. THE SOLITARY GROUND RAISED BY THE REVENUE RELATES TO CHALLENGING THE ORDER OF LD. CIT(A) IN DELETING THE ADDITIONS MADE ON ACCOUNT OF NON - GENU INE CREDITORS AS THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS AND CREDITWORTHINESS OF THE CREDITORS. 3 I.T.A. NO. 4156 /MUM/201 7 RAMESH NARAYAN PATIL 4. WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. AS PER THE FACTS OF THE PRESENT CASE, THE BEST JUDGMENT ASSESSMENT ORDER WAS PASSED U/S 144 OF THE ACT, THEREBY MAKING ADDITIONS BY DISALLOWING NON - VERIFIABLE EXPENSES AMOUNTING TO RS. 1,05,31,163 OF FIVE PARTIES SHOWN AS SUNDRY CREDITORS AND DISALLOWANCE WAS ALSO MADE OF RS. 20,97,896/ - FOR VIOLATING PROVISIONS OF SECTION 40A(IA) FOR FAILURE TO SUBMIT PROOF DEDUCTION OF TDS. 5. IN APPEAL BEFORE US, THE REVENUE HAS CHALLENGED THE ORDER OF LD. CIT(A) IN DELETING THE ADDITIONS MADE ON ACCOUNT OF NON - GENUINE CREDITORS. FROM THE RECORDS, WE NOTICE THAT THE AO PASSED ORDER IN SECTION 144 OF THE I.T. ACT AS THE ASSESSEE HAD NOT SUBMITTED ANY DOCUMENTS AT THE TIME OF ASSESSMENT PROCEEDINGS. HOWEVER, IN APPEAL BEFORE LD. CIT(A), CERTAIN DOCUMENTS WERE SUBMITTED AND THE AO IN HIS R EMAND REPORT CATEGORICALLY SUBMITTED THAT THE CREDITORS FURNISHED ONLY CONFIRMATION REGARDING THE AMOUNTS PENDING WITH THE ASSESSEE AND THE REMAINING DETAILS CALLED FOR WERE NOT FURNISHED. THEREFORE, IN THE 4 I.T.A. NO. 4156 /MUM/201 7 RAMESH NARAYAN PATIL ABSENCE OF BANK STATEMENTS, COPIES OF DELIVERY CH ALLANS, COPY OF VAT RETURNS, ETC, IT WAS DIFFICULT TO CONCLUDE THE VERACITY OF THE TRANSACTIONS. HOWEVER, AT THE SAME TIME, AFTER GOING THROUGH THE REMAND REPORT, HELD THAT THE ASSESSEE HAD DISCHARGED THE ONUS CAST UPON HIM AND THEREFORE WHILE CONSIDERING THE GP RATIO, DELETED THE ADDITIONS. THIS CONCLUSION OF LD. CIT(A) TO OUR MIND IS BAD IN LAW. THE LD. CIT(A) HAS NOT DISCUSSED AS TO HOW AND IN WHAT MANNER THE ASSESSEE HAD DISCHARGED ITS ONUS. THE NET PROFIT RATIO HAD NOT BEEN CONSIDERED AT ALL WHILE DELE TING THE ADDITIONS. 6. MOREOVER, THE LD. CIT(A) HAD NOT DISCUSSED AS TO HOW THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS HAVE BEEN PROVED BY THE ASSESSEE AND HAD NOT CONTROVERTED OR REBUTTED THE SPECIFIC PLEA TAKEN BY THE AO TO THE EFFEC T THAT THE ASSESSEE HAD NOT FURNISHED THE RELEVANT /CORROBORATIVE DOCUMENTARY EVIDENCE WHICH WERE IN HIS POWER AND POSSESSION TO PROVE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. THEREFORE, IN SUCH CIRCUMSTANCE, WE ARE OF THE VIEW THAT ASSE SSEE HAD NOT FULLY DISCHARGED HIS ONUS. 5 I.T.A. NO. 4156 /MUM/201 7 RAMESH NARAYAN PATIL 7 . BE THAT AS IT MAY , CONSIDERING THE FACTS OF THE PRESENT C ASE, MATERIAL PLACED ON RECORD AND KEEPING IN VIEW THE INTEREST OF JUSTICE, WE ARE OF THE VIEW THAT THE PURPOSE OF DETAILED VERIFICATION/ INVESTIGATION IS TO ASSESS AND COLLECT THE LEGITIMATE TAXES DUE ON THE ASSESSEES CORRECT INCOME . THEREFORE IN SUCH CIRCUMSTANCES, WE SET ASIDE THE ORDER OF LD. CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF AO WITH A DIRECTION TO PROVIDE ONE MORE OPPORTUNITY TO THE ASSES SEE TO FURNISH THE REQUIRED DOCUMENTS TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF TRANSACTIONS. AO IS ALSO DIRECTED TO CARRY OUT NECESSARY INVESTIGATIONS /VERIFICATION OF THE EVIDENCE , IF SO , FURNISHED BY THE ASSESSEE AND THEREAFTER PASS AFR ESH ORDER . IT IS NEEDLESS HERE TO MENTION THAT BEFORE PASSING THE ORDER OF ASSESSMENT, THE AO SHALL PROVIDE SUFFICIENT OPPORTUNITY OF HEARING TO THE ASSESS E E. 8 . BEFORE PARTING, WE MAY MAKE IT CLEAR THAT OUR DECISION TO RESTORE THE MATTER BACK TO THE FILE OF AO SHALL IN NO WAY BE CONSTRUED AS HAVING ANY REFLECTION OR EXPRESSION ON THE MERITS OF 6 I.T.A. NO. 4156 /MUM/201 7 RAMESH NARAYAN PATIL THE DISPUTE, WHICH SHALL BE ADJUDICATED BY THE AO INDEPENDENTLY IN ACCO RDANCE WITH LAW. 9 . IN THE NET RESULT, THE APPEAL FILED BY THE REVENUE STANDS PARTLY ALLOWED FOR STATISTICAL PURPOSES WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH FEB , 2019. SD/ - SD/ - ( SHAMIM YAHYA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 12 . 02 .201 9 SR.PS . DHANANJAY / 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 I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI