DEVBRATA MOULICK, MUMBAI V. ITO 18(1)(1), MUMBAI

ITA 4402/MUM/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3674 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 16-11-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 31-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Assessee Lawyers: SNEHAL R SHAH
• Keywords: Depreciation; Additional evidence; Non compliance
• Section: 68; 263; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI B.R.BASKARAN (AM) AND SHRI RAM LAL NEGI (JM) ITA NO 4402/MUM/2013 ASSESSMENT YEAR: 2001-2002 SHRI. DEVBRATA MOULICK . 11, KINARA NARAYAN POOJARI MARG, WORLI, MUMBAI- 400018. PAN: AAVPM5685J VS. THE ITO - 18(1)(1), PIRAMAL CHAMBERS, LAL BAUG, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. SNEHAL R. SHAH RESPONDENT BY : SHRI. B. S. BIST. DATE OF HEARING: 07/03/2016 DATE OF PRONOUNCEMENT: 07/03/2016 O R D E R PER RAM LAL NEGI, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGA INST ORDER DT. 22/02/2013 PASSED BY THE LD. CIT(APPEALS)-29, MUMBAI FOR THE A SST. YEAR 2001-02. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE, P ROPRIETOR OF THREE CONCERNS, FILED ITS RETURN OF INCOME FOR THE ASST. YEAR 2001- 02 DECLARING THE TOTAL INCOME OF RS. 1,98,937/-. THE AO COMPLETED THE ASSESSMENT PROCEEDINGS AND PASSED THE ASSESSMENT ORDER DETERMINING THE TOTAL INCOME A T RS.2,50.700/-. SUBSEQUENTLY, THE ASSESSMENT ORDER WAS REVISED U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) AND IN TERMS OF REVI SIONAL ORDER PASSED BY THE CIT, THE ASSESSING OFFICER ISSUED NOTICES TO THE ASSESSE E ON DIFFERENT DATES AND SOUGHT EXPLANATION, IN RESPONSE THEREOF, THE ASSESS EE ONLY GOT FILED LETTER OF 2 ITA NO.4402/MUM/2013 ASSESSMENT YEAR: 2001-02 AUTHORITY. ULTIMATELY, THE AO PASSED EXPARTE ORDER U/S 144 OF THE ACT AND MADE ADDITIONS OF RS. 4,05,000/- TO THE INCOME OF T HE ASSESSEE AS UNEXPLAINED CASH DEPOSITS AND ALSO DISALLOWED RS. 37,852/- OUT OF TELEPHONE AND MOTOR CAR EXPENSES AND RS. 25,323/- OUT OF OFFICE, CONVEYANC E, STAFF AND WELFARE EXPENSES. 3. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER BE FORE THE LD. CIT(A). DURING APPELLATE PROCEEDINGS THE ASSESSEE CLAIMED THAT AN AMOUNT RS. 2,10,000/-WAS WITHDRAWN FROM BANK ACCOUNT OF HIS PARTNERSHIP FIRM AND SUBMITTED THE COPY OF STATEMENT OF ACCOUNT OF THE M/S MOULIC INFOTECH IN SUPPORT OF HIS CLAIM. FOR THE BALANCE AMOUNT, IT WAS CONTENDED THAT AN AMOUNT RS. 1,00,000/-WAS WITHDRAWN FROM THE SAME BANK ACCOUNT AND THE REMAIN ING AMOUNT WAS OUT OF CASH SALES REFLECTED IN THE PROFIT AND LOSS ACCOUNT . SINCE THE SAID DETAILS/ EXPLANATIONS WERE NOT FILED BEFORE THE AO, THE THEN CIT(A) SOUGHT REMAND REPORT FROM THE ASSESSING OFFICER. IN RESPONSE THER EOF REMAND REPORT DT. 18/12/2008 WAS SUBMITTED BY THE AO. SINCE IN THE RE PORT THE AO HAS ONLY MENTIONED DETAILS OF NOTICES AND REMINDERS SENT TO THE ASSESSEE AND NON COMPLIANCE THEREOF BY THE ASSESSEE DURING THE ORIGI NAL ASSESSMENT PROCEEDINGS, THE CIT FURTHER DIRECTED THE AO TO SUB MIT FRESH REPORT AFTER VERIFYING THE EVIDENCE PRODUCED BY THE ASSESSEE. AG AINST THE AO SUBMITTED THE REMAND REPORT REPRODUCING THE CONTENTS OF EARLIER R EPORT WITHOUT CONDUCTING ANY VERIFICATION. THE ASSESSEE THEN REQUESTED THE C IT EITHER TO VERIFY THE EVIDENCE HIMSELF OR TO DIRECT THE AO TO DO THE NEED FUL. HOWEVER, THE LD. CIT(A) DISMISSED THE APPEAL ON THE BASIS OF MATERIAL PLACE D BEFORE HIM OBSERVING THAT NEITHER THE AO HAS MADE ANY EFFORT TO VERIFY EXPLAN ATION OF THE APPELLANT NOR THE APPELLANT IS SERIOUS ABOUT PURSUING HIS CASE. T HE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST THE IMPUGNED ORDER PASS ED BY THE LD.CIT(A). THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER ON THE F OLLOWING GROUNDS; 3 ITA NO.4402/MUM/2013 ASSESSMENT YEAR: 2001-02 1. THE LEARNED CIT(A) HAS ERRED IN STATING THAT TH E APPELLANT IS NOT SERIOUS ABOUT PURSUING HIS CASE, INSPITE OF WITHOUT APPRECIATING THE FACTS OF THE CASE IN THE RIGHT PERSPECTIVE. 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE A DDITION OF RS. 3, 75, 000/- ON ACCOUNT OF CASH DEPOSIT U/S 68 OF THE INCOME TAX ACT, 1961. 3. FURTHER, THE LEARNED CIT(A) HAS ERRED IN CONFIRM ING ADDITION OF RS. 12, 661/- WHICH IS 10% OF TOTAL TELEPHONE EXPENSES, MOTOR CAR EXPENSES AND DEPRECIATION ON CAR WITHOUT APPRECIATI NG THE FACTS OF THE CASE IN THE RIGHT PERSPECTIVE. 4. SINCE THE ASSESSEE HAS FILED APPLICATION FOR CO NDONATION OF DELAY OF ONE DAY IN FILING THE PRESENT APPEAL ON THE GROUND THAT DUE TO ILLNESS THE ASSESSEE COULD NOT HANDOVER THE DOCUMENTS TO THE REPRESENTATIVE SU PPORTED BY AN AFFIDAVIT, THE LD. AR SUBMITTED THAT THE DELAY HAS BEEN CAUSED DUE TO THE CIRCUMSTANCES BEYOND CONTROL, THEREFORE, THE APPLICATION MAY BE A LLOWED. AFTER HEARING THE LD. DR WE ALLOWED THE APPLICATION IN THE INTEREST OF NA TURAL JUSTICE AND ALLOWED THE LD. AR TO ARGUE THE CASE ON MERITS. 5. AT THE OUTSET, THE LD. AR SUBMITTED THAT THE AMO UNT IN QUESTION HAS BEEN REFLECTED IN THE BOOKS OF ACCOUNT AND THE SUBMISSIO NS MADE BY THE ASSESSEE WAS NOT CONSIDERED EITHER BY THE ASSESSING OFFICER OR BY THE CIT(A). COMPARISON OF TWO REMAND REPORTS DT.18/12/2008 AND 23/09/2011 SHOW THAT THE AO DID NOT VERIFY THE ADDITIONAL EVIDENCE PRODU CED BY THE ASSESSEE BEFORE THE LD. CIT(A) DESPITE THE SPECIFIC DIRECTIONS ISSU ED BY THE LD. CIT(A). WE ALSO NOTICED THAT REMAND REPORT DT. 23/09/2011 IS THE RE PLICA OF THE FIRST REMAND REPORT DT. 18/12/2008. THIS FACT REVEALS THAT THE A O DID NOT BOTHER TO VERIFY THE EVIDENCE IN COMPLIANCE OF THE ORDERS OF THE CIT (A). ON THE OTHER HAND THE CIT(A) HAS DECIDED THE APPEAL ON THE BASIS OF THE M ATERIAL PLACED BEFORE HIM. THE LD. DR HOWEVER, RELYING ON THE CONCURRENT ORDER S PASSED BY THE AUTHORITIES 4 ITA NO.4402/MUM/2013 ASSESSMENT YEAR: 2001-02 BELOW SUBMITTED THAT THERE IS NO SCOPE FOR INTERFER ENCE IN ORDER PASSED BY THE LD CIT(A). 6. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCE S OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT THE CONTENTION OF THE ASSES SEE IS REQUIRED TO BE EXAMINED BY THE ASSESSING OFFICER IN THE LIGHT OF T HE ADDITIONAL EVIDENCE PRODUCED BY HIM. HOWEVER, SINCE THE ASSESSEE DID NO T APPEAR AND CO-OPERATE WITH THE ASSESSING OFFICER DURING THE INITIAL ASSES SMENT PROCEEDINGS, WE IMPOSE A COST OF RS. 3000/- ON THE ASSESSEE, AND SU BJECT TO THE PAYMENT OF THE COST TO THE REVENUE BEFORE 23/3/2016, SET ASIDE TH E IMPUGNED ORDER PASSED BY THE LD. CIT(A) AND RESTORE THE MATTER TO THE AO WIT H THE DIRECTION TO PASS ASSESSMENT ORDER AFRESH, AFTER GIVING PROPER OPPORT UNITY OF BEING HEARD TO THE ASSESSEE AND VERIFYING THE ADDITIONAL EVIDENCE PROD UCED BEFORE THE LD. CIT(A). 7. ACCORDINGLY, APPEAL FILED BY THE ASSESSEE FOR TH E A.Y. 2001-02 IS ALLOWED FOR THE STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH MARCH, 2016 SD/- SD/- ( B.R.BASKARAN ) ( RAM LAL NEGI ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED:07/03/2016 5 ITA NO.4402/MUM/2013 ASSESSMENT YEAR: 2001-02 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' , $ !'% , / DR, ITAT, MUMBAI 6. &' ( / GUARD FILE. / BY ORDER, ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI PRAMILA