DCIT 7(2), MUMBAI V. SSG REALTORS & DEVELOPRS P. LTD, MUMBAI

ITA 4658/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92436 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 13-04-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-06-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: N V NADKARNIDR
• Section: 133(6); 68

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NO.4658/MUM/2013 ASSESSMENT YEAR: 2008-09 DY. COMMISSIONER OF INCOME TAX-7(2), ROOM NO.624, M.K. ROAD, MUMBAI-400020 / VS. M/S SSG REALTORS & DEVELOPERS PVT. LTD. 302, TARDEO AIRCONDITIONED MARKET, TARDEO, MUMBAI-400034 ( ! / REVENUE) ( '#$ % /ASSESSEE) P.A. NO. AAHCS6528D ! / REVENUE BY SMT. N.V. NADKARNI-DR '#$ % / ASSESSEE BY SHRI NISHIT GANDHI & ! ' % ( / DATE OF HEARING 16/04/2015 ' % ( / DATE OF ORDER: 24/04/2015 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 06/03/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE FIRST GROUND RAISED BY THE REVENUE PERTAINS TO DELETING M/S SSG REALTORS & DEVELOPERS PVT. LTD. 2 THE ADDITION OF RS.5,57,64,210/- MADE U/S 68 OF THE INCOME TAX ACT, 1961( HEREINAFTER THE ACT) WITHOUT APPRECI ATING THE FACTUAL AND LEGAL MATRIX AS THE PARTIES FROM WHOM T HE ADVANCES WERE SHOWN HAVE DENIED ANY TRANSACTION, TH US, THE ASSESSEE FAILED TO DISCHARGE THE BURDEN CAST UPON I T. 2. AT THE TIME OF HEARING, LD. DR, SMT, N.V. NADKA RNI, ADVANCED HER ARGUMENTS, WHICH ARE IDENTICAL TO THE GROUND RAISED BY SUBMITTING THAT IT IS PURELY FAILURE ON T HE PART OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) TO APP RECIATE THE FACT THAT THE PARTIES FROM WHOM ADVANCES HAVE S HOWN HAVE DENIED ANY TRANSACTION WITH THE ASSESSEE, CONSEQUENTLY, THE ASSESSEE HAS NOT DISCHARGED THE B URDEN OF PROOF ENSHRINED IN SECTION 68 OF THE ACT. ON THE O THER HAND, THE LD. COUNSEL FOR THE ASSESSEE, SHRI NISHIT GANDH I, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY SUBMITTING THAT THE ASSESSING OFFICER DID NOT PROVI DE PROPER OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CLA IM. RELIANCE WAS PLACED UPON THE DECISION OF THE TRIBUN AL PRONOUNCED IN THE CASE OF RITA STEPHEN PINTO VS ITO ( ITA NO.1219/MUM/2013 ) ORDER DATED 25/03/2015 AND ALSO THE DECISION IN ORISSA CORPORATION PVT. LTD. 159 ITR 78 (SC). PLEA WAS ALSO RAISED THAT NO DEFECTS WERE POINTED O UT BY THE ASSESSING OFFICER AS THERE WAS TEMPORARY LULL IN TH E BUSINESS OF THE ASSESSEE. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DECLARED NIL INCOME IN ITS RE TURN FILED M/S SSG REALTORS & DEVELOPERS PVT. LTD. 3 ON 13/09/2009 WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THE CASE WAS SELECTED FOR SCRUTINY UNDER CASS, THER EFORE, NOTICE U/S 143(2) OF THE ACT WAS SERVED UPON THE AS SESSEE. PENALTY OF RS.10,000/- WAS IMPOSED UPON THE ASSESSE E U/S 271(1)(B) OF THE ACT FOR NON-COMPLIANCES OF THE NOT ICES OF VARIOUS DATES. THE ASSESSEE IN ITS BALANCE SHEET, S CHEDULE-A, UNDER THE HEAD CURRENT LIABILITIES, SHOWED RS.4,98, 04,423/- AS ADVANCES RECEIVED FROM VARIOUS PARTIES. THE ASS ESSING OFFICER ASKED THE ASSESSEE TO FURNISH THE NAME AND ADDRESSES OF THE PARTIES FROM WHOM SUCH ADVANCES WE RE TAKEN. IN ORDER TO VERIFY THE GENUINENESS OF THE TRANSACTION/PARTIES NOTICES U/S 133(6) OF THE ACT W ERE ISSUED TO THE FOLLOWING PARTIES:- SL. NO. NAME OF PARTIES AMOUNTS IN RS. 1. INFINITY COMMUNICATION 90,50,000 2. PERCEPT ADVERTISING (9,75,971) 3. VENUS WIRE INDUSTRIES 1,70,000 4. FORTUNE STEEL 14,00,000 5. PANKAJ MEHTA & ORS. 1,25,000 6. PERCEPT FINSERVICE 5,00,000 7. PERCEPT HOLDING 1,19,99,787 8. SANJAY M CHOPRA 52,25,000 9. SHRENIK M CHOPRA 27,00,000 10. PERCEPT INDIA 35,00,000 11. TRISTAR INTERIORS 46,00,000 12. BHAGWATI GOWAMI 25,000 13. MANJULA M. JAIN 25,000 14. ARDHESH MANDELIA HUF 45,000 15. CHUNILAL GOPALJI 20,00,000 16. SURESHA V THAKKAR 47,94,780 17. SAVRABH CHATTERJEE 14,85 ,000 18. LAXMI GOVEKAR 14,85,000 TOTAL 5,00,15,538 2.2. IT IS NOTED THAT THE PARTIES AT SERIAL NUMBER 1,2,5, 6,8,9 AND 15 STATED THAT THEY NEVER ENTERED INTO A NY M/S SSG REALTORS & DEVELOPERS PVT. LTD. 4 TRANSACTION WITH THE ASSESSEE. PARTIES AT SERIAL N UMBER 3,4, 7,10,13,16,17 AND 18 DID NOT FILE ANY REPLY WHEREAS NOTICES SERVED TO SR. NO. 11 AND 12 RETURNED BACK. AS PER THE ASSESSING OFFICER THE MAJORITY OF THE PARTIES CONFI RMED THAT THEY EITHER NEVER ENTERED INTO ANY TRANSACTION WITH ASSESSEE COMPANY OR NO OUTSTANDING BALANCE IS PENDING AGAINS T THE NAMES OF THE ASSESSEES IN THEIR BOOKS. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT PROPER OPPO RTUNITY WAS NOT PROVIDED TO THE ASSESSEE AS THE ASSESSEE WA S IN A POSITION TO SUBSTANTIATE ITS CLAIM. WE FURTHER NOTE THAT PAGES 19 & 20 OF THE PAPER BOOK WERE NOT MADE AVAILABLE T O THE ASSESSING OFFICER AND CERTAINLY ARE NEW DOCUMENTS, THEREFORE, WE ARE OF THE VIEW THAT THIS ISSUE REQUI RES FRESH CONSIDERATION AT THE LEVEL OF THE ASSESSING OFFICER . THEREFORE, WE REMAND THIS GROUND TO THE FILE OF THE ASSESSING OFFICER FOR WHICH THE ASSESSEE BE GIVEN OPPORTUNITY OF BEING HE ARD WITH FURTHER LIBERTY TO FURNISH EVIDENCE, IF ANY, IN SUP PORT OF ITS CLAIM. THE ASSESSEE IS ALSO DIRECTED TO PRODUCE TH E PARTIES BEFORE THE LD. ASSESSING OFFICER FROM WHOM THE ADVA NCES WERE CLAIMED TO BE RECEIVED. EVEN OTHERWISE, AS PER SECTION 68 OF THE ACT, THE LAW IS WELL SETTLED THAT ONUS OF PROVING THE SOURCE OF MONEY FOUND TO HAVE BEEN RECEIVED BY THE ASSESSEE IS ON THE ASSESSEE ITSELF. OUR VIEW FINDS SUPPORT F ROM THE DECISION FROM HONBLE APEX COURT IN ROSHAN DI. HUTT I VS CIT 107 ITR 938 (SC), KALLE KHAN MD. HANIF VS CIT 50 IT R 1 (SC), CIT VS DEVI PRASAD VISHWANATH PRASAD 72 ITR 194 (SC ), ARABALI TRADING COMPANY LTD. VS ITO 220 CTR (RAJ.) 622, A. GOVIND RAJULU MUDALIAR VS CIT 34 ITR 807 (SC), CIT VS M/S SSG REALTORS & DEVELOPERS PVT. LTD. 5 DURGA PRASAD MORE 72 ITR 807 (SC), CIT VS R.S. RAT HORE 212 ITR 390 (RAJ.), CIT VS KORELAY TRADING COMPANY 232 ITR 820 (KOL.), S.K.BOTHRA & SONS HUF VS ITO 203 TAXMAN 436 (KOL.) AND THE RATIO LAID DOWN IN CIT VS V.L.S FOOD S PVT. LTD. 203 TAXMAN 213 (DEL.) THE ASSESSING OFFICER IS TO EXAMINE THE PARTIES, IF PRODUCED BY THE ASSESSEE, TO HIS SA TISFACTION, THUS, THIS GROUND OF THE REVENUE IS ALLOWED FOR STA TISTICAL PURPOSES. 3. THE NEXT GROUND PERTAINS TO DELETING THE DISALLOWANCE OF RS. 6,57,699/- ON ACCOUNT OF BUSINE SS EXPENSES. THE CRUX OF ARGUMENT ON BEHALF OF THE RE VENUE IS THAT NO BUSINESS ACTIVITY WAS CARRIED OUT BY THE AS SESSEE DURING THE RELEVANT PERIOD, THEREFORE, THERE IS NO QUESTION OF EXPENSES FOR WHICH OUR ATTENTION WAS INVITED TO PAR A 4 OF THE ASSESSMENT ORDER. ON THE OTHER HAND, THE LD. COUNSE L FOR THE ASSESSEE, DEFENDED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER BY SUBMITTING THAT THERE WAS LULL IN THE BUSINESS AND THE EXPENSES WERE ACTUALLY INCURRED. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT WAS FO UND BY THE ASSESSING OFFICER THAT NO BUSINESS ACTIVITY WAS CAR RIED OUT BY THE ASSESSEE DURING THE YEAR AND MERELY EARNED I NTEREST INCOME, THUS, HE DISALLOWED THE CLAIMED BUSINESS EX PENSES OF RS.6,57,699/-. ON APPEAL, THE LD. COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE ASSESSEE AGAINST WHICH THE REVENUE IS IN APPEAL. WE NOTE THAT THE L D. COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RELIEF TO THE M/S SSG REALTORS & DEVELOPERS PVT. LTD. 6 ASSESSEE MERELY ON THE GROUND THAT THE ASSESSEE COM PANY INCURRED NORMAL OR HEAD EXPENSES TO CONTINUE ITS BU SINESS ACTIVITIES. THE ASSESSEE CLAIMED THAT THERE WAS TE MPORARY LULL IN THE BUSINESS. WITHOUT GOING INTO MUCH DELI BERATION, WE NOTE THAT SINCE THE ASSESSEE IS A COMPANY, CERTA IN OVER HEAD EXPENSES ARE BOUND TO INCUR TO KEEP THE HOPES ALIVE TO RESTART ITS BUSINESS, THEREFORE, IN THIS GROUND, WE ARE IN AGREEMENT WITH THE CONCLUSION DRAWN BY THE LD. CIT( A). IT IS AFFIRMED. FINALLY, THE APPEAL OF THE REVENUE IS PARTLY ALLOWE D FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVE OF BOTH SIDES, AT TH E CONCLUSION OF HEARING ON 24/04/2015. SD/- SD/- ( B.R.BASKARAN ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & MUMBAI; ) DATED : 24/04/2015 F{X~{T? P.S/. . . %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT 2. ./,- / THE RESPONDENT. 3. & 0% ( *+ ) / THE CIT, MUMBAI. P4. & 0% / CIT(A)- , MUMBAI 5. 2!3 .%' , *+( *' 4 , & / DR, ITAT, MUMBAI 6. 5# 6 / GUARD FILE. / BY ORDER, /2+% .% //TRUE COPY// / (DY./ASSTT. REGISTRAR) , & / ITAT, MUMBAI